BIR Ruling [UN-157-95]

April 12, 1995 BIR RULING [UN-157-95] MEMORANDUM FOR The Commissioner This refers to the letter of Ms. Marita G. Guanzon, a Filipino citizen married to a Swedish national, and presently residing in Sweden, requesting for the abatement of the penalties on her basic donor's tax liability in connection with the donation made by her mother consisting of 7,000 shares of stock of Oro Enterprises, Inc., a domestic corporation principally engaged in the sale of pharmaceutical products. It is represented that on October 6, 1989 Ms. Guanzon received a wedding gift of 7,000 shares of stocks with a book value of P1,253,000.00 as of 1989; that having resided abroad for long time and coming to the Philippines only occasionally on short visits, she did not bother to inquire about her tax liabilities in connection with the subject donation; that her mother died in 1990; that in her present visit to the Philippines which will end on April 17, 1995, which is her expected date of departure for Sweden, she learned that she has some tax obligations to settle in connection with the aforesaid donation; that per initial computations by Revenue District Officer Gerardo Flores, her unpaid donor's tax liability is as follows: Tax due: P1,000,000.00 P185,860.00 253,000.00 66,909.00 Basic donor's tax P253,769.60 Add: 25% surcharge 63,192.00 P316,962.00 Add: 60% interest 190,177.00 Comp. penalty (late filing) 20,000.00 P527,139.00 =========== Considering the foregoing circumstances and the fact that she is not financially capable of paying the total assessment of P527,139.00 she is presently requesting for the abatement of the interest and compromise penalty and for the settlement of her tax liabilities by paying the amount of P316,962.00, which is all the amount that she has at present. Pursuant to Section 204 of the Tax Code, considering the circumstances under which the tax liabilities were incurred and considering further the insinuating circumstance of voluntariness on her part, it is respectfully recommended that her request for abatement of interest and penalties be granted and that the amount of P316,962.00 be accepted as full and complete settlement or her 1989 donor's tax liability. Recommended by: MILAGROS V. REGALADO Chief, Law Division By: MILLARDO M. MANSEGUIAO Asst. Chief, Law Division CONCURRING: ALICIA L. TOMACRUZ Head Rev. Executive Assistant (Legal Service) APPROVED: LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue