IN countless cases, the Supreme Court has held that failure to receive assessment notices is tantamount to a denial of due process of law. These notices must be served on and received by the taxpayer. Otherwise, the assessment is void. It is, thus, important for taxpayers to be aware of the modes of service of assessment notices under current Bureau of Internal Revenue (BIR) regulations.
Previously, under Revenue Regulations (RR) 12-99, there are only two modes of service: personal service and registered mail. This was expanded to three—personal service, substituted service and mail—
under RR 18-2013, which amended RR 12-99.
Under personal service, the notice shall be served by delivering personally a copy thereof to the taxpayer at his registered or known address, or wherever he may be found. The phrase “wherever he may be found” is noteworthy. This is similar to the rule on personal service of summons under Section 6, Rule 14 of the Rules of Court. In Sansio v Mogul, GR 177007, July 14, 2009, the SC interpreted this provision to mean that service may be made “wherever he may be found; that is, wherever he may be, provided he is in the Philippines.”
In case personal service is not possible, the notice shall be served by substituted service or by mail.
Substituted service can be only used when the taxpayer is not at his registered or known address. The notice may be left at either his registered address or a known address, which is his business address. In both places, the notice may be left with only two persons: his clerk or a person having charge thereof. This is similar to substituted service of summons under Section 8, Rule 15 of the Rules of Court. The SC held in Manotoc v Court of Appeals, GR 130974, August 16, 2006, that “a person having charge thereof” refers to one managing the office or business, such as a president or manager; and such an individual must have sufficient knowledge to understand the obligation of the defendant in the summons, its importance and its prejudicial effects arising from inaction.
If the known address is the taxpayer’s residence, substituted service can be made by leaving the notice with a person of legal age who is residing there. Again, this is similar to the rule on substituted service of summons. In Manotoc, the SC held that this person refers to one who understands the importance of the summons and who has a “relation of confidence,” ensuring that the taxpayer would receive or, at least, be notified of the receipt of the summons.
If no person is found either at the registered or known address, the revenue officer shall bring a barangay official and two disinterested witnesses to the address to attest to the absence, and the notice shall be given to the barangay official. It must be noted that such fact must be contained at the bottom portion of the notice, as well as the names, official positions and signatures of the witnesses. The procedure is similar if the taxpayer refuses to receive the notice.
As to mail, under RR 18-2013, the BIR now has three options: registered mail; reputable courier; and ordinary mail, if no registry or reputable courier is available in the locality of the taxpayer. With the exception of the reputable courier, this adopts the rule on service by mail of pleadings, judgments and other papers under Section 7, Rule 13 of the Rules of Court. The proof of service by mail are: a written report under oath, setting forth the manner, place and date of service, the name of the person who received the same; and registry receipt or official receipt, in the case of the reputable courier.
Last, RR 18-2013 provides that service to the tax agent/practitioner shall be deemed service to the taxpayer. This is comparable to the well-established doctrine that “when a client is represented by counsel, notice to counsel is notice to client.”
It is incumbent upon the BIR to strictly comply with the rules of service of notices in RR 18-2013. It must be stressed that, while taxpayers owe diligence to the government in the payment of taxes, the government also owes diligence to taxpayers in ensuring the proper service of assessment notices.
Atty. Pierre Martin D. Reyes
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The author is a junior associate of Du-Baladad and Associates Law Offices, a member-firm of the World Tax Services Alliance.
The article is for general information only, and is neither intended nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. For comments or questions about the article, e-mail the author at pierremartin.reyes@bdblaw.com.ph or call 403-2001, local 311.