BIR Ruling No. 273-82

October 27, 1982 BIR RULING NO. 273-82 340 000-00 273-82 The Chief State Prosecutor Ministry of Justice M a n i l a S i r : This refers to your letter dated July 22, 1982 requesting a ruling as to the commencement of the five-year prescriptive period provided for in Section 340 of the Tax Code in case of failure to pay deficiency income tax which is in violation of Section 51, and penalized under Section 73, both of the Tax Code. In reply thereto, I have the honor to inform you that the income tax determined by the taxpayer and which is reflected in his return "shall be paid at the time the return is filed". (Sec. 51(a)(1), Tax Code) On the other hand, the deficiency income tax which is determined by the Commissioner of Internal Revenue after his examination of the income tax return "shall be paid upon notice and demand from the Commissioner of Internal Revenue". (Sec. 51(b), Tax Code) If said deficiency tax is not paid in full within thirty (30) days from the notice and demand from the Commissioner of Internal Revenue, the corresponding interest and surcharge shall be imposed. cdta Under Section 340 of the Tax Code, all violations of any provisions of said Code shall prescribe after five years; and prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment. Applying this provision in the case of an income tax determined by the taxpayer in his income tax return, the said five-year period begins from the date the income tax return is filed . On the other hand, with regard to the deficiency income tax determined by the Commissioner after investigation , considering that under Section 73 of the Tax Code, the taxpayer incurs penalty in case of refusal or neglect to pay such tax, prescription shall commence to run upon the expiration of the period prescribed for its payment, i.e., thirty (30) days upon notice and demand from the Commissioner . However, if the Bureau of Internal Revenue did not have the knowledge of the violation at the same time the same was committed, the said five-year prescriptive period shall be reckoned from the date the violation was discovered. The precise date of such discovery is the date of the report of the investigating examiner who discovered the reported violation. (People vs. Tierra, 12 SCRA 666) aisadc Very truly yours, RUBEN B. ANCHETA Acting Commissioner