Imposition of the Nominal Compromise Penalty

October 23, 1959 BIR RULING NO. 558-59 The Regional Director B.I.R. Regional District No. 9 Zamboanga City Attention : Chief, Tax Audit Branch S i r : This has reference to your 1st Indorsement dated May 25, 1959, requesting clarification on the query posed by the Chief, Tax Audit Branch, as to whether or not a nominal compromise penalty may be imposed in addition to the 50% surcharge for false or fraudulent returns. The 25% or 50% surcharges imposed under Section 72 of the Tax Code for failure to file returns or for false or fraudulent returns, as the case may be, are not criminal penalties. The taxpayer committing such violations is criminally liable under the provisions of sections 73 and 74. The compromise penalty being imposed for violation of any provision of the Tax Code constitutes the extrajudicial settlement of the penal liability of the taxpayer. This compromise penalty is totally distinct and different from the surcharges prescribed under section 72. Accordingly, a compromise penalty should also be suggested to be paid whenever the surcharges prescribed in section 72 are imposed. cdll Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue