Filing/Submission of BIR Form 2316 for Calendar Year 2019 to the Bureau of Internal Revenue

April 27, 1998 Bringas, Sanchez & Associates Realty & Law Offices Room 604 Doa Consolacion Bldg. Gen. Santos Ave., Araneta Center Cubao, Quezon City Attention : Atty . Benito G . F . Bringas Gentlemen : This refers to your letter dated August 5, 1991, received by this Office on August 21, 1991, relative to the tax case of your client, Mr. GENEROSO SIA, involving the amount of P1,077,257.40 as deficiency capital gains tax under Assessment Notice No. FAA-1-85-88-003017 dated September 27, 1988 detailed as follows: Net Capital Gains per Investigation P2,641,650.00 Add: Disallowance Acquisition Cost (P728,235.00) Selling Expenses (25,420.00) (753,655.00) Net Capital Gains After Review P1,887,995.00 Tax Due Thereon P1,029,797.00 Less: Tax Previously Paid 132,082.50 Deficiency Tax P897,714.00 Add: Int. from 8/9/87 to 8/9/88 179,542.90 Total Amount Due P1,077,257.40 =========== As alleged by Mr. Sia in his protest letter dated January 12, 1991, pursuant to the terms of the transfer of the property subject of a Deed of Mortgage, all taxes due on the property, including transfer fees and capital gains taxes, were all for the account of the Development Bank of the Philippines. Thus, when the conveyance was presented for registration with the Register of Deeds, the BIR Office, Cotabato City, issued a certificate authorizing registration based on the capital gains tax return of the DBP. However, we find the above contention to be devoid of merit on the ground that the BIR is not, nor it is a party to the alleged contract hence, whatever stipulations were agreed upon by the contracting parties are not binding upon this Office. A recomputation of the actual deficiency tax was however, made by this Office, after a careful analysis of the records, resulting in a reduced deficiency capital gains tax due as shown herein-below: Selling Price P2,641 ,650.00 Less: Acquisition Cost P728,235.00 Depreciation 25,420.00 753,655,00 Net Capital Gains P1,887,995.00 Tax Due Computed At: 10% on 1st P100,000 = P10,000 20% on excess = 357,599 Tax Due Thereon P367,599.00 Less: Payment Made 132,082.50 Deficiency Tax Due P235,516.50 Add: 25% Surcharge P58,879.13 20% Int. fr. 8/9/87 to 8/9/96 529,912.13 588,791.26 Total Deficiency Capital Gains Tax P824,307.76 ========= The payment made by the DBP of P132,082.50 as 5% capital gains tax is insufficient considering that the rate of capital gains tax applicable to the case at the time of the foreclosure sale on July 9, 1985 was still Section 34(h) of the Tax Code, and not 5% of the selling price as provided under Presidential Decree No. 1994 which took effect on January 1, 1986. Accordingly, you are hereby requested to urge your client, Mr. Generoso Sia, to pay the above deficiency capital gains tax to an authorized agent bank stationed near his residence within fifteen (15) days from your receipt hereof otherwise, the Warrant of Distraint and Levy earlier issued will be enforced for the collection of the above deficiency tax. aisadc This constitutes the final decision of this Office on the matter. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue