Pagarigan Accounting Law Office

October 12, 2009 BIR RULING [DA-(ET-013) 596-09] Pagarigan Accounting Law Office 1561 Blumentritt Sampaloc Manila Attention: Atty. Ramon Wilfredo B. Pagarigan Gentlemen : This refers to your letter dated August 24, 2009 requesting on behalf of your client, the Estate of Mindaluz P. Saludares of 1069 J. Pereyras Compound, Tagum City, for the issuance of Estate Tax Clearance Certificate. It is represented that the said Estate has duly complied with the requirements for availment of the tax amnesty under Republic Act (RA) No. 9480; that however, the cancellation of the deficiency estate tax assessment and the consequent tax clearance thereon was withheld by the Regional Director of Tagum City pending a request for clarification as to whether the Estate is qualified to avail of the benefits of RA No. 9480 based on the following circumstances, to wit: 1. The Letter of Intent was filed during the 30 day period. Had the forms been ready then, the amnesty would have been paid, and the case terminated unceremoniously. 2. Had the exclusion of delinquent accounts rule been promulgated along with the implementing rules and regulations, then the Estate would not have relied on the Letter of Intent as a relief in lieu of the actual availment itself. When the exclusion rule was issued, the estate tax assessment was already considered final and unappealable. 3. Had the Estate been informed immediately that the Letter of Intent would not produce any valid and legal effects under the given circumstances, the Estate would have taken other options to protect its interests. The Estate received no response to its Letter of Intent of Sept. 10 up to Dec. 26, when the RDO practically invited them to avail of the amnesty. It was only when RMC 69-2007 was issued that the effect of the Letter of Intent as a Protest became material. EaCSHI 4. Had the guidelines been issued timely and expeditiously, the Estate would not be misguided into choosing the wrong course of action. 5. Under ordinary circumstances, an administrative protest would have been the only remedy to stop the running of the 30 day period. But considering the last time a legislative amnesty was granted was by virtue of an Executive Order 41 (taxable years 1981-85), more than 20 years ago, the Estate had absolutely no reason to believe that the events transpiring were nothing but ordinary. 6. Little did the Estate expect that almost half way down the 6-month amnesty period, some rattling policies, such as the delinquent account exclusion rule, would come very late in the day. From the actions of the RDO and the Regional Director, neither did they expect the same as can be gleaned from the actions or inactions. 7. The RMC, which is an issuance that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices. It became the vehicle for introducing a policy not included in the basic law RA 9480, based on a principle that delinquent accounts are considered properties of the Government and hence are not covered by the Amnesty Law nor in any prior jurisprudence or issuance. 8. Finally, Section 246 of the Tax Code of 1997 provides that any of the rulings or circulars promulgated by the Commissioner shall be given retroactive application if the . . ., modification . . . will be prejudicial to the taxpayers . . .". Since none of the exceptions thereunder are attendant in this case, then Section 246 finds application in this case. In reply thereto, please be informed that since the availment of the TAP by the Estate of the late Mindaluz P. Saludares was prior to the passage of RMC No. 69-2007, or which in effect will not qualify taxpayer from the availment of tax amnesty, where the said assessment has become final and executory, but governed by RMC No. 55-2007 which makes no qualification for the said availment, and the Estate of Mindaluz P. Saludares is not one of those cases which are excepted from the coverage and has in fact complied with the documentary requirements mentioned in the said RMC, the payment of P3,236,019.00 as evidenced by duly validated BIR Form No. 2116 will be sufficient ground for the issuance of estate tax clearance by the RDO concerned. ADHaTC SUCH BEING THE CASE, this will therefore serve as an authority for the Revenue District Office No. 112, Davao del Norte, to issue the corresponding estate tax clearance in favour of the heirs of the late Mindaluz P. Saludares. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed 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