Estate and Inheritance Taxes, Tax Amnesty

December 27, 1979 BIR RULING NO. 138-79 Estate and inheritance taxes, tax amnesty This refers to your letter dated March 1, 1979 informing this Office that there is pending before that Court an intestate case wherein the spouses died immediately after the war; that they left some real estate properties in Abra, which were inherited by three adopted children; and that, subsequently, the heirs obtained a tax amnesty covering the estate and inheritance taxes. You would like to know whether on the basis of the tax amnesty covering the estate and inheritance taxes issued by this Office to the heirs, that Court can order the distribution of the estate without payment of the estate taxes by the heirs. You would like to be informed also whether it is necessary that the heirs should submits to that Court a clearance issued by this Office before distribution can be made. In reply, please be informed that since the deceased spouses died immediately after the war and inasmuch as Presidential Decree No. 69 which eliminated the inheritance tax took effect only on January 1, 1973, the heirs are subject to the estate and inheritance taxes. cd As regards the alleged availment by the heirs of the tax amnesty (under P.D. 23, 370 or 631), please be informed that if no assessment has been issued by this Office and that there is no valid information filed by an informer under Republic Act No. 2338, then such availment relieved the heirs from payment of the estate and inheritance taxes due on the transmission of the estate. In case there is already an assessment or that valid information has been filed under R.A. No. 2338, the case is not covered by the amnesty and; hence the heirs are not relieved from the tax liability under the following circumstances: If the heirs availed of P.D. 23 and the assessment was issued or that the information was filed on or before October 20, 1972; If the heirs availed of P.D. 370 and the assessment was issued or that the information was filed on or before December 31, 1973; If the heirs availed of P.D. 631 and the assessment was issued on or before January 6, 1975 or that the information was filed after July 1, 1974 and before January 6, 1975. In the event this case is not covered by the tax amnesty availed of by the heirs, before distribution of the estate to the heirs can be authorized by that Court, a certification from the Commissioner of Internal Revenue that the estate and inheritance taxes have been paid should be shown. (Section 115, Tax Code of 1977). And even if this case is covered by the tax amnesty, a clearance from this Office should be secured by the administrator or the heirs before that Court authorizes the distribution of the Estate.