BIR Ruling [DA-724-06]

December 18, 2006 BIR RULING [DA-724-06] Revenue Regulations #8-2001 Mr. Moises M. Visperas, Jr. C.P.A. 10 Suha St. cor. Rambutan Street Phase II, Town & Country Executive Village Mayamot, Antipolo City S i r : This refers to your letter dated November 30, 2006, requesting clarification on certain VAP issue under Revenue Regulations No. 8-2001 in relation to the present Abatement Program under Revenue Regulations No. 15-2006, quoted hereunder as follows, to wit: "1. If previously an application for availment of Voluntary Assessment Program (VAP) under RevenueRegulationsNo.8-2001 was filed by a taxpayer and accordingly paid the corresponding amounts due (equivalent to less than 100% of basic tax due) but said application was subsequently denied via the non-issuance of a Qualification Certificate and instead was issued a final assessment notice, can the taxpayer who has appealed the final assessment before the CTA who now wants to avail of the Abatement Program be allowed to be deducted from the tax due under RR15-2006 the said previous VAP payment? "2. In case answer to query #1 is in the affirmative, would the payment of the balance tax due under RR15-2006 and the previous VAP payment under RR8-2001 and attaching the proof of the previous VAP payment to the application for abatement program would complete the documentation on the part of the taxpayer-applicant? "3. How soon would the termination letter be issued? And subsequently how soon would the BIR lawyers join by client's lawyers in filing a joint motion to dismiss the tax case before the CTA as a consequence of the availment of the Abatement Program by the taxpayer?" In reply, please be informed as follows: 1. Section 3.5 of Revenue Regulations No. 8-2001 provides that if despite VAP availment, tax audit is conducted on the covered year under the circumstances allowed by this Regulations, the VAP payment shall be credited against the deficiency tax after audit . HDTISa Accordingly, since your VAP availment was deemed denied as you were audited and subsequently issued a FAN, instead of the Certificate of Qualification, your payment under the VAP pursuant to RR 8-2001 is credited against the deficiency tax. Be as it may, it is so provided in RR 15-2006, Section 2(f) thereof that civil tax cases being disputed before the Department of Justice and the Courts, e.g. CTA among others are eligible for abatement under the program. Thus, since your case is still under litigation by the CTA, you are eligible to apply for abatement under RR 15-2006. 2. Accordingly, your proof of payment under VAP pursuant to RR 8-2001, and your proof of payment on the balance of the basic tax due not covered by your previous VAT payment, may suffice as the complete documentation in addition to other documents as required by the BIR Office concerned. 3. The taxpayer may file a Motion to Dismiss with the Court of Tax Appeals with the Conformity of this Bureau on the basis of the availment of the Abatement Program under RR 15-2006 or may file a Joint Motion to Dismiss the case with the BIR lawyers. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclose that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service