BIR Ruling [DA-605-04]

November 25, 2004 BIR RULING [DA-605-04] 90 (C) & 91 (B) Belo Gozon Elma Parel Asuncion & Lucila 15/F, Sagittarius Condominium H.V. dela Costa Street, Salcedo Village Makati City Attention: Atty. Cecile R. Gonzales-Yumul Gentlemen : This refers to your letter dated October 28, 2004 stating that Hernando M. Sevilla died intestate on May 3, 2004 at Quezon City leaving his two (2) minor illegitimate children, aged four (4) years old and six (6) months old; that his estate consists of his cash deposit in the amount of P195,244.94 at the Bank of Philippine Islands, Cubao Shopping Center Branch and his one-third (1/3) share in the parcel of land located at No. 109, 15th Avenue, Barangay Socorro, Cubao, Quezon City, covered by TCT No. 87051 of the Registry of Deeds of Quezon City; that the six (6) months period provided by the Tax Code will expire on November 3, 2004; that you cannot file the estate tax return and pay the estate tax due thereon within the prescribed period because you still have to complete the required documents to be attached to the return and that the estate has no sufficient liquid resources, hence, you are requesting for an extension of time to file the estate tax return and, likewise, an extension of time to pay the estate tax due. In reply thereto, please be informed that under Section 90(B) and (C) of the Tax Code of 1997, estate tax return is required to be filed within six (6) months from the decedent's death, and in meritorious cases, a reasonable extension not exceeding thirty (30) days for filing the return may be granted by the Commissioner of Internal Revenue. The payment of the estate tax or any part thereof shall be made upon the filing of the return or on such date as fixed if an extension is granted by the Commissioner, but in no case to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case the estate is settled extra-judicially pursuant to Section 91(B) of the Tax Code of 1997. Based on the aforestated justifiable reason, your request for an extension of time within which to pay the estate tax is hereby granted pursuant to Section 91(B) of the Tax Code of 1997. Accordingly, the estate tax due on the estate of Hernando M. Sevilla may be paid up to two (2) years counted from May 3, 2004. On the other hand, under Section 90(C) of the Tax Code, a thirty-day extension is granted as an extension of the period within which to file the estate tax return, thus, considering that the last day for filing the estate tax return of the estate of Hernando M. Sevilla is on November 3, 2004, the period within which to file the same is hereby extended up to December 3, 2004. Such being the case, you are hereby directed to immediately file the estate tax return in order to stop the running of the interest for late filing thereof. EAIcCS Moreover, in view of the above favorable action to your request for an extension of two (2) years within which to pay the estate tax, this Office has decided to forego the imposition of the surcharge and penalties on the estate tax due on the transmission of the estate of Hernando M. Sevilla. However, it shall be understood that the estate shall be liable for the corresponding interest that have accrued thereon up to the time of payment of the aforesaid estate tax pursuant to Section 249 of the Tax Code of 1997. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service