Disapproval and Non-acceptance of CIC Bond

August 25, 1958 BIR RULING NO. 472-58 Tax Service of the Philippines, Inc. Floor Three, MRS Building Plaza Cervantes, Manila Gentlemen : This is in connection with your letter dated July 10, 1958 requesting the approval and acceptance of the enclosed CIC Bond No. A.S.-IR/216 filed by your client, San Miguel Brewery, Inc. as principal, and the Commonwealth Insurance Company as surety, in lieu of a previous bond filed with and approved by this Office on February 7, 1956. The first bond filed by your client is being replaced by the new bond because of the following conditions embodied therein which you believe to be improper in a manufacturer's bond required under Section 156 of the National Internal Revenue Code: cdll "(1) That the principal and the surety or sureties waive the statute of limitations under the National Internal Revenue Code. "(2) That the obligation of the surety or sureties under the bond may be enforced by the Commissioner of Internal Revenue by means of the summary remedy of distraint and levy as provided for in Sections 315 to 330 of the National Internal Revenue Code. "(3) That the principal and the surety or sureties agree to pay to the Republic of the Philippines exemplary or corrective damages of not less than P100.00, in case it becomes necessary to bring a court action for the forfeiture of the bond and the bond is actually forfeited." The abovequoted conditions are required to be incorporated in all bonds filed by taxpayers with the Bureau of Internal Revenue pursuant to the provisions of General Circular No. V-269. The provisions of the said general circular applies to ordinary bonds as well as to general bonds required to be filed before engaging in certain businesses. It is contended that the aforesaid conditions are improper in a manufacturer's bond inasmuch as no assessment has yet been issued. We beg to disagree with this view. While it is true that at the time the bond is filed no assessment has yet been issued against the taxpayer nevertheless, it will be noted that the aforesaid conditions will apply only when the taxpayer fails to comply with laws and regulations taxes legally due from him. Moreover, the aforesaid conditions are incorporated in all bonds filed with the Bureau of Internal Revenue to protect the interest of the Government. In view thereof, the enclosed CIC Bond No. A.S-IR/216 is hereby returned unapproved by this Office. prcd Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue