Cancellation of Assessment Made Against Dr. Juan R. Fernando

January 16, 1959 BIR RULING NO. 024-59 Atty. Raul G. Fernando Office of the Government Corporate Counsel 1055 Oregon St., Paco Manila S i r : Reference is made to your letter dated October 7, 1958 requesting the cancellation of our assessment made against Dr. Juan R. Fernando in the amount of P180.00 representing "real estate dealers" fixed tax liability and compromise penalty. cdt In reply thereto, I have the honor to inform you that your request cannot be granted for lack of legal basis. Investigation conducted by this Office disclosed that Dr. Juan R. Fernando owns a residential house located at 1318-D Pennsylvania, Manila, which he leased to Messrs. Charles Grodziki and Vaswani, deriving therefrom by way of rentals an income of P3,780.00 for the year 1952. However he failed to provide himself with the required " real estate dealers " fixed tax for said year in violation of Section 178 in relation to the provisions of Section 193(q) (now Section 182-s), both of the Tax Code, which violation is penalized under Section 209 of the same Code. Accordingly, on December 23, 1957, this office assessed the deficiency tax liability and compromise penalty in the total amount of P180.00. The Domingo Imperial case is not applicable to the present case. In the Imperial case, the subject matter of the assessment and demand is the "real estate dealers" fixed tax for the fourth quarter of 1946 to the third quarter of 1950. The decision in that case was made on the basis of the law as it stood in 1946. The law then defines a real estate dealer as including all persons who for their own account are engaged in the sale of lands, buildings, or interests therein or in leasing real estate. The law as amended by R.A. No. 588 in 1950 defines a real estate dealer as including any person engaged in the business of . . . leasing or renting property on his own account as principal and holding himself out as a full or part-time dealer in real estate or as an owner of rental property or properties rented or offered to rent for an aggregate amount of P3,000.00 or more a year. Under the latter definition, it is clear that a person is considered a real estate dealer by the mere fact that he is the owner of the property rented for the aggregate amount of P3,000.00 a year. In view of the foregoing, it will be appreciated if your client settles the assessment against him in order that his case may be closed. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue Copy furnished: The Regional Director Regional District No. 4 Quezon City