Return Filed for Purposes of the Additional Residence Tax

July 2, 1958 BIR RULING NO. 354-58 1st Indorsement Respectfully returned to the Regional Director, ATTENTION: The Chief, Legal Branch and the Chief, Collection Branch, B.I.R. Regional District No. 3, Manila, the case against Mr. Victor Cruz of 420 Raon St., Quiapo, Manila, involving the amounts of P527.50 as real estate dealer's fixed tax from the 4th quarter of 1946 to 1949, plus compromise penalty and P18.25 as residence tax (Class B) and surcharge for the year 1949, for immediate collection of the aforesaid taxes. It will be noted that a return is not required to be filed for purposes of the real estate dealer's fixed tax, and that while a return is required to be filed for purposes of the additional residence tax (Class B), such return is separate and distinct from the income tax return filed by taxpayers for income tax purposes. There being no return filed for purposes of the real estate dealer's fixed tax, the provisions of Section 331 of the Tax Code cannot apply to such tax. The law applicable with respect to such tax is Section 332(a) which allows the Government ten (10) years from the discovery of the failure or omission to pay the tax within which to assess said tax. Such was the decision of the Court of Tax Appeals in the case of Bisaya Land Transportation Co., Inc. (C.T.A. Case No. 60), which was promulgated on October 27, 1956. Considering that the failure of the taxpayer to pay the real estate dealer's fixed tax of P527.50 was discovered on November 23, 1949, this Office has up to November 23, 1959 within which to assess said tax against him. As the assessment in question was issued on March 21, 1955, it is obvious that it was made within the prescribed period, and considering that the assessment was made on March 21, 1955, the right of the Government to collect said tax will not prescribed until March 21, 1960, pursuant to Section 332(c) of the Tax Code. Neither has the right of the Government to assess and collect the amount of P16.25, representing the additional residence tax due from the taxpayer for the year 1949, has prescribed; for considering that the return for purposes of said tax had never been filed and that such omission was discovered only on November 23, 1949, this Office has also up to November 23, 1959 within which to assess said tax. The amount of P16.25 having been assessed on March 21, 1955, the right to collect it will not prescribe until March 21, 1960 (See Section 332(c) of the Tax Code). (SGD.) JOSE P. TRINIDAD Acting Commissioner of Internal Revenue