BIR Ruling No. 362-11

October 4, 2011 BIR RULING NO. 362-11 Section 90 (C) Tax Code of 1997; Section 91 (B) Tax Code of 1997; BIR Ruling No. [UN-168-95]; BIR Ruling No. 066-98; BIR Ruling No. DA-136-98; BIR Ruling No. DA-203-98; BIR Ruling No. DA-261-00 Batuhan Blando Concepcion & Trillana Attorneys-At-Law 15th Floor Picadilly Star Building 4th Avenue corner 27th Street Bonifacio Global City, Taguig 1634 Attention: Roberto J. Concepcion & Ana Charissa D. Diaz Gentlemen : This refers to your letters dated March 16, 2011, requesting for extension of five (5) years within which to file and pay the estate tax return pursuant to Section 90 (C) of the Tax Code of 1997. It is represented that Mr. Fermin Arcadio C. Taruc III, died in Pasig City on February 28, 2011; that the estate of the late Mr. Fermin Arcadio Taruc III will be settled judicially; and that an extension is needed in order not to impose undue hardship upon the estate of the decedent and its heirs while the estate is being heard judicially, hence, this request to give the heirs the time to gather all the documents necessary for the filing of the return. In reply, Section 90 (C) of the Tax Code of 1997 provides: "SECTION 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 days for filing the return. xxx xxx xxx" Moreover, pursuant to Section 91 (B) of the Tax Code of 1997, when the Commissioner finds that the payment on the due date of the estate tax or of any part thereof would impose difficulty 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. EaScHT In addition, the last paragraph of Section 91 (B) of the Tax Code of 1997 provides: "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." Based on the foregoing justifiable circumstances, your request for an extension of time to file the estate tax return and payment of the estate tax is hereby granted. Accordingly, under Section 90 (C) of the Tax Code, a thirty-day extension is granted as an extension of the period within which to file the estate tax return, thus, considering that the last day for filing the estate tax return of the estate of Fermin Arcadio C. Taruc III is on August 28, 2011, the period within which to file the same is hereby extended up to September 27, 2011. Likewise, under Section 91 (B) of the Tax Code, considering that the estate will be settled judicially, the payment of the estate tax is extended, which, however, shall not exceed five (5) years to be reckoned from the date prescribed for payment, subject to the condition that the executor, administrator, or beneficiary shall furnish a bond not to exceed twice the amount of the estate tax due. (BIR Ruling No. [UN-168-95] dated April 19, 1995; BIR Ruling No. 066-98 dated May 21, 1998; BIR Ruling No. DA-136-98 dated April 06, 1998; BIR Ruling No. DA-203-98 dated May 21, 1998 and BIR Ruling No. DA-261-00 dated June 15, 2000). TcDHSI In view of the favorable action on your request for extension of time, this Office has decided to forego with the payment of surcharge and penalties, within the 5-year period for paying the estate tax due thereon. However, it shall be understood that the estate shall be liable for the corresponding interest that have accrued up to the time of payment of the estate tax pursuant to Section 249 of the Tax Code of 1997. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue