Request for Extension of Time to File Estate Tax Return

July 29, 1997 BIR RULING NO. 085-97 83 (b) (c) 84 (b) 0125-97 085-97 Villanueva Pacis Mondragon & Cana Law Offices 23rd Floor, Cityland 10, Tower II H.V. dela Costa Street corner Ayala Avenue North Salcedo Village 1200 Makati City Attention: Atty . Edgar A . Pacis Gentlemen : This refers to your letter dated May 21, 1997 requesting, in behalf of your clients, the Heirs of Jose L. Rodriguez represented by Ms. Stella Evelyn R. Acedera, for an extension to pay the estate tax due on the Estate of Jose L. Rodriguez for a period not exceeding five (5) years from the due date. cdt It is represented that one of the heirs, Ms. Stella Evelyn R. Acedera, is presently seeking for her appointment as the Administratrix of the Estate of Jose L. Rodriguez; that you have already notified the Revenue District Office No. 52 in Paraaque, Metro Manila that Jose L. Rodriguez died on December 27, 1996; that the Estate is now the subject of an intestate estate settlement before the Regional Trial Court of Paraaque originally scheduled to be heard on May 30, 1997 but subsequently rescheduled to June 6, 1997; that the payment of the estate tax within the requisite period has imposed undue hardship upon the estate for the following reasons: (1) that the gross estate is still being determined in view of the non-availability of vital documents, such as the titles to the real properties forming part of the Estate; (2) that a judicial settlement of the Intestate Estate has to be instituted because of the failure on the part of the Heirs to agree to an extrajudicial settlement; (3) that the Estate, which constitutes mostly, if not solely, of real properties, has no cash liquidity on hand to settle the impending obligations of the Estate more particularly the estate tax and that in order to generate cash, there is a need to sell some properties of the Estate which can only be done with the approval of the Intestate Court; (4) that since the intestate estate settlement proceedings has barely started considering that the initial is still due on June 6, 1997 and the six-month period from the date of death of the decedent within which to settle the estate tax is about to expire, there is no certainty that the estate tax shall be settled within the remaining period; (5) that by reason of the refusal of some of the Heirs to surrender the titles over the real properties constituting the estate unless compelled by the Intestate Court, there is at present a difficulty in preparing the inventory and likewise the computation of the estate tax and the preparation of the estate tax return. In reply thereto, please be informed that under Sec. 83(b) and (c) of the Tax Code, as amended, 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 years in case the estate is settled through the courts, or two years in case the estate is settled extrajudicially pursuant to Sec. 84 of the same Code. In view thereof, and considering that the Petition for the Issuance of Letters of Administration over the Estate of the late Jose L. Rodriguez has not yet been finally decided by the Court; and considering that the gross estate of the deceased could not be determined yet because of the non-availability of the vital documents, such as the titles to the real properties forming part of the Estate; and considering further that the Estate will not be settled without the intervention of the Courts because of squabbles among the Heirs of the decedent, this Office hereby allows you to file the estate tax return of the deceased Jose L. Rodriguez not later than July 26, 1997. The estate tax, however, may be paid within five (5) years from the date of death of the decedent, or as soon as the estate is settled through the courts, whichever comes first and the running of the Statute of Limitations for assessment as provided in Sec. 203 of the Tax Code, as amended, shall be suspended for the period of extension. Furthermore, your request for waiver of surcharge and penalties on the estate tax due on the transmission of the estate of Jose L. Rodriguez is likewise granted, but the estate shall be liable for the interest accrued up to the time the estate tax is paid. (BIR Ruling No. 25-97 dated March 25, 1997) Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue