BIR Ruling No. 020-11

January 26, 2011 BIR RULING NO. 020-11 Secs. 90 (C) & 91 (B) of the Tax Code of 1997; BIR Ruling No. DA-285-98; BIR Ruling No. 072-00 Mr. Wilfredo Jocson 1134 Sarmiento Street Plaridel I, Barangay Malabaas Angeles City, Pampanga Sir : This refers to your letter dated November 15, 2010 requesting, on behalf of the heirs of the late Rodolfo J. Borja, for an extension of thirty (30) days from January 21, 2011, within which to file the estate tax return of the decedent, and two (2) years within which to pay the corresponding estate tax due on the transmission of the said estate to the heirs, pursuant to Sections 90 (C) and 91 (B) both of the Tax Code of 1997, as amended. It is represented that the late Rodolfo J. Borja died intestate on July 25, 2010; that you understand that as heirs, you are required to file the estate tax return for the decedent's estate and pay the corresponding estate taxes within 180 days from the time of death or January 21, 2011; that however, there are circumstances that are prevailing you from immediately settling the affairs of the decedent; that you are still mourning the death of the decedent, the ultimate demise of the decedent has caused the family unbearable grief that you cannot immediately focus on the legal consequences of his death; that the decedent's entire estate constitute mostly of properties and you are still collating the records of these properties, i.e., certificates of title, zonal valuation, tax declaration and other relevant documents before the filing and payment of the said taxes; and that most of the properties are mortgaged, and the heirs lack liquidity to pay the corresponding estate taxes. In reply thereto, please be informed that Sections 90 (C) and 91 (B) of the Tax Code of 1997 provide, viz. : "SEC. 90. Estate Tax Returns. cHAIES xxx xxx xxx (C) Extension of Time. The Commissioner shall have authority to grant, in meritorious cases, a reasonable extension not exceeding thirty (30) days for filing the return." "SEC. 91. Payment of tax. xxx xxx xxx (B) Extension of Time. When the Commissioner finds that the payment on the due date of the estate tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment as provided in Section 203 of this Code shall be suspended for the period of any such extension." Thus, pursuant to the above-quoted provision, an extension of thirty (30) days from January 21, 2011 within which to file the required return is allowed, which in this case is on February 20, 2011. Further, since the heirs are having difficulty in collating all important documents relative to the said death, your request for extension of two (2) years is hereby GRANTED, such that the heirs shall pay the estate tax within two (2) years from actual filing of the return or on February 20, 2013 whichever comes first, provided that the executor, or administrator, or beneficiary, shall furnish a bond in such amount, not exceeding double the amount of the tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance with the terms of the extension. It shall be understood, however, that the estate shall be liable for the corresponding interest that shall have accrued thereon up to the time of payment of the estate tax due on the transmission by the said estate of its properties in favor of the heirs pursuant to Section 249 of the Tax Code of 1997. (BIR Ruling No. DA-285-98 dated June 29, 1998). aTcHIC 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.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue