Grant of Request for Extension of Time to File Estate Tax Return

December 20, 1999 BIR RULING NO. 210-99 Sec. 90 (B) and (C)-066-98-210-99 Uriel S. Balboa 90 M. Hemady Street, Quezon City S i r : This refers to your letter dated November 17, 1999 urgently requesting for (1) an extension of time to file the estate tax return of the estate of Fernanda S. Balboa and (2) an extension of 24 months within which to pay the tax. It is represented that Fernanda S. Balboa died on May 24, 1999 such that the headline to file the estate tax return is on November 24, 1999; that the deceased left two parcels of real properties, one located in M. Hemady, Quezon City and the other located in Balintawak, Quezon City; that the property in M. Hemady is the ancestral home in which two heirs and their respective families reside; that the Balintawak property is tied up in a long-term lease with Caltex, Philippines, earning a meager amount of P15,000 per month; that the monthly income of the estate is not even enough to pay the medical and burial expenses of the deceased that amounted to half a million pesos; that the deceased did not leave any other asset except the said two properties; that it will take some time to dispose of these properties given the present condition of the real estate market; that if the heirs are forced to sell under pressure, it would be most likely that they could not dictate a higher price and may even take a loss; that due to the difficulties and obstacles besieging the estate, the instant request is being urgently sought; In reply, please be advised as follows: (a) For the purpose of determining the estate tax provided for in Section 84 of the Tax Code of 1997, the estate tax return shall be filed within six (6) months from the decedent's death.(Section 90(B), ibid.). Moreover, the Commissioner of Internal Revenue shall have the authority to grant, in meritorious cases, a reasonable extension not exceeding thirty days for filing the return. (Section 90(C), ibid.) Accordingly and in view of the aforesaid justifiable reasons, your request for an extension of thirty (30) days from November 24, 1999 to December 24, 1999 within which to file the estate tax return is hereby granted. (b) The estate tax imposed by Section 84 of the Tax Code of 1997 shall be paid at the time the return is filed by the executor, administrator, or the heirs. (Sec. 91(A) of the Tax Code of 1997) However, when the Commissioner of Internal Revenue 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 years, in case the estate is settled through the courts, or two years in case the estate is settled extra-judicially. 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 limitation for assessment as provided in Section 203 of the Tax Code of 1997 shall be suspended for the period of any such extension. (Section 91(B) of the Tax Code of 1997). cdlex Such being the case, and since the payment of estate tax or any part thereof on the due date would impose undue hardship upon the estate or any of the heirs, your request for an extension of twenty-four (24) months counted from the time of the filing of the return (December 24, 1999) is hereby granted. (c) However, it shall be understood that the said estate shall be liable to the corresponding interest that have accrued thereon up to the time of filing of the return and payment of the estate tax due on the transmission of the said estate to the heirs. (BIR Ruling No. 066-98 dated May 21, 1998). A copy of this letter should be attached with the estate tax return of the decedent. 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 deemed null and void. LexLib Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue