Minimum Amount of Internal Revenue Taxes

August 5, 1959 BIR RULING NO. 391-59 The Regional Director BIR Regional District No. 5 San Pablo City S i r : In reply to your letter dated May 6, 1959, requesting a ruling fixing the minimum amount of internal revenue taxes for which action for collection may be instituted in the Justice of the Peace Courts, you are hereby informed as follows: cdll Republic Act No. 2343 which took effect on June 20, 1959 amended, among others, section 51 of the Tax Code. The amendment, among other things, eliminated the provisions prescribing the 3-year period within which income taxes may be summarily collected. By virtue of said amendment, the period for assessment and collection of internal revenue taxes including income taxes shall be governed by sections 331 and 332 of the Tax Code, in which case, summary action for collection is coextensive with judicial action. In other words, under the present law, the Bureau has five (5) years from date of assessment within which to collect either by summary or judicial remedy. For obvious reasons, it would not be necessary, neither is it practical, to institute judicial actions for collection when, after all, summary action is available. However, increases where collection of the tax by summary remedy proves futile, as when the taxpayer has no properties at the time or is concealing his properties, judicial action for collection becomes necessary and may be instituted in the Justice of the Peace Courts if the amount of the demand ranges from P1.00 to P2,000.00, exclusive of interests and costs. There is no ground to fear that in actions involving amounts ranging from P50.00 to P100.00 the Government stands to lose money even if it wins the case because the expenses incurred for the attendance of its witness may be more than the amount sought to be collected. This is so because under the provisions of Section 11 of Republic Act No. 1125, when a taxpayer fails to appeal an adverse decision of the Commissioner of Internal Revenue within thirty days after the receipt of such decision, the same becomes final, executory and demandable. (Republic of the Philippines vs. Juana B. Vda. de del Rosario, Manuel del Rosario and Luis del Rosario, G.R. No. L-10460, March 11, 1959). In judicial actions for collection of taxes, a taxpayer who contests the legality of the assessment which has already become final under this doctrine, should not be allowed to contest the legality of the decision of the Commissioner because the same has already become final. There is, therefore, no need for presenting any witnesses in such actions. If a need for witnesses arises at all, the expenses incurred for their attendance can be recovered as costs, pursuant to Rule 131, section 9(d) of the Rules of Court. Moreover, witnesses residing in places more than 50 kilometers from the place of trial by the usual course of travel need not be present at the trial in order to testify. Their testimonies may be taken by deposition upon oral examination or written interrogatories (Rules of Court, Rules 18 and 19, sec. 9). And finally, judgments favorable to the Government can be executed on the properties of the taxpayer irrespective of whether these properties were existing prior to or subsequent to the rendition of the judgment. LLphil Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue