BIR Ruling [UN-054-94]

February 11, 1993 BIR RULING [UN-054-94] The Regional Director Revenue Region No. 7 Cebu City S i r : This refers to the internal revenue tax case of Atty. Marlow L. Velasquez (Re: Pantaleon S. Velasquez), 203 Great Han Palace, Osmea Blvd., Cebu City, involving the amount of P672,802.51 representing deficiency income tax for the year 1989 under Letter of Demand No. FAN-11-89-91-003421 dated December 17, 1991. It appears that the collection of the aforesaid tax liability has already been enforced thru sale at public auction of two (2) real properties of the taxpayer. The said real properties were declared forfeited to the government per Return/Report of the Tax Sale dated August 25, 1993 due to absence of bidders whose bids cover the minimum or floor price (i.e., basic tax and legal increments plus cost of publications). No absolute forfeiture has as yet been made because the one year redemption period has not yet expired. In connection therewith, you are requesting opinion as to whether or not the aforesaid tax case can still be the subject of a compromise under Revenue Memorandum Order No. 45-93. In reply thereto, please be informed that the aforementioned tax case can no longer be the subject of a compromise under Revenue Memorandum Order No. 45-93 considering that the collection of the aforesaid tax liability has already been enforced by the forfeiture of two (2) real properties of the taxpayer in favor of the government in satisfaction of the said tax liability although the taxpayer has one year from the date of forfeiture, i.e. until August 25, 1994 to redeem the property. Thus, if the taxpayer fails to redeem the forfeited properties within one year from the date of forfeiture, you are requested to execute a Declaration of Absolute Forfeiture and effect the transfer of the title of the properties in favor of the government. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue