BIR Ruling No. 211-12

March 23, 2012 BIR RULING NO. 211-12 Tax Code, Sec. 90 (C) of the NIRC, as amended; BIR Ruling No. 037-2012 Pajaron & Dela Cruz Law Office 23 Santo Tomas St., Marisol Subd. Santolan, Pasig City Attention: Atty. Jose Marie Pajaron Gentlemen : This refers to your letter dated September 28, 2011 requesting on behalf of your clients, the heirs of Manuel Trinidad Fragante, an extension of (5) years from September 28, 2011, within which to file the estate tax return and pay the estate tax. It is represented that Manuel Trinidad Fragante died on March 28, 2011 and that your reason for an extension to file the estate tax return and pay estate tax is due to the disagreement and failure by some of the compulsory heirs to give an accounting and surrender physical possession of the personal properties of the Decedent and the institution of an intestate estate action in court, the final inventory of the estate properties will be finally approved therein and the possible sale of properties for the payment of the estate tax can be effected by order of the court. In reply thereto, please be informed that Sections 90 (C) and 91 (B) of the Tax Code of 1997 provide, viz. : SDHCac "SEC. 90. Estate Tax Returns. 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." "xxx xxx xxx "If an extension is granted, the Commissioner may require the executor, or administrator, or beneficiary, as the case may be, to 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." Thus, your request for an extension of (5) five years, within which to file the required return is denied for lack of legal basis. Based on the foregoing justifiable reason, your request for extension of the time within which to pay the estate tax is hereby granted up to the maximum period of five (5) years in case the estate is settled through the courts, or two (2) years in case the estate is settled extra-judicially, reckoned from actual filing of the return or on September 28, 2011 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. (BIR Ruling No. 037-2012 dated February 1, 2012) 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. SHCaDA Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue