Request for Extension of Time to File Estate Tax Return and to Pay Estate Tax (Dominga A. Villaluz)

June 29, 2016 BIR RULING NO. 344-16 Secs. 90 (C); 91 (B) & 249 NIRC; Revenue Regulations No. 02-2003; BIR Ruling No. 059-2015; BIR Ruling No. 374-2012 Atty. Gerardo A. Villaluz 116 J.P. Rizal St., Project 4 Quezon City Sir : This refers to your letter dated December 2, 2015 requesting on behalf of the Heirs of the Estate of Dominga A. Villaluz for an extension of time to file the latter's estate tax return and to pay the estate tax due thereon. Documents submitted show that Dominga A. Villaluz died on June 19, 2015 after two (2) years of lingering illness. That you and your sister are the only heirs of your deceased mother and you are taking responsibility of handling whatever estate your mother has left upon her demise. You are in the process of collating information to verify if she has any assets other than her share in the conjugal properties. During your mother's long term illness you incurred substantial medical expenses which you financed through personal loans and which you are still paying. You are also in the need of raising funds to pay estate taxes, if any. In reply thereto, please be informed that Sections 90 (C) and 91 (B) of the Tax Code of 1997 provide, viz. : "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. 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." CAIHTE Based on the foregoing representations, this Office finds justifiable reason to grant the request for an extension to file the estate tax return of thirty (30) days counted from December 19, 2015, which is the last day for filing of the estate tax return of the late Dominga A. Villaluz. Thus, the filing of the said estate tax return of the decedent is hereby extended up to January 18, 2016. Furthermore, since you are to collate all documents and information necessary for the preparation of the said return, you have two (2) years (where the estate will be settled extra-judicially) within which to pay the estate tax. Thus, the heirs shall pay the estate tax within 2 years reckoned from actual filing of the return or on January 18, 2016, 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. It shall be understood, however, that the estate shall be liable for the corresponding interest that shall have accrued from January 18, 2016 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. (BIR Ruling No. 506-14 dated December 29, 2014) 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 considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue