‘BIR must ensure due process in tax cases’

THE chairman of the House Committee on Ways and Means on Thursday asked the Bureau of Internal Revenue (BIR) “to always ensure due process in favor of the taxpayer” so that tax cases will not be dismissed by courts.

Albay Rep. Joey Sarte Salceda issued the statement after the Court of Tax Appeals (CTA) made public last Wednesday a decision on a tax-deficiency case against a condominium builder. The case outcome effectively erased P50 million in alleged tax deficiencies for failure of the bureau to “personally inform” representatives of the firm.

“Not following due process to the very extreme leads tax cases open to litigation. When tax dues are litigated, we don’t get to collect them immediately,” Salceda said. “The government already loses, even when it wins the case in the end.”

The decision was on a 2008 deficiency case against a Quezon City-based condominium firm. The full court sustained the resolution of its Second Division that the IBM Plaza Condominium Association Inc. of Bagumbayan, Quezon City, was not liable to pay the P50 million tax. This was because the BIR didn’t send the taxpayer a Notice of Informal Conference (NIC).

The court explained that the notice is part of due process required by Revenue Regulations 22-44 in relation to Section 228 of the Tax Code.

Salceda said he “strongly” reminds BIR officials “to make sure every process is according to the law, regulations and standards of due process.”

“Nothing should be left to chance,” he added.

Meanwhile, the lawmaker asked the BIR to “undertake an effort of codifying its own revenue regulations” so that “old or obscure RRs are not set aside, only to be invoked later by an erring taxpayer.”

“It will be good for both the government and the taxpayers if we were following just one codified set of rules,” adding that he hopes to push the BIR to do this before his 2nd term as Committee on Ways and Means chairman ends.

Also, Salceda said that efforts to simplify the payment of taxes all align with the goals of the “Ease of Paying Taxes Act,” which the House has already approved on third reading.

The lawmaker believes Senators will discuss the bill by November.

“We could have it by the end of the year, at least in [the] bicameral if not yet as enacted law,” he said.

Salceda said the measure will make tax procedures simpler, hopefully reducing litigation and disagreements between tax authorities and taxpayers.

The “Ease of Paying Taxes” act will make taxpayer rights clearer, so that the BIR doesn’t violate them, the lawmaker said.

“A BIR that is a stickler for due process to the last detail is a BIR that is more immune to tax cases,” Salceda said. “That’s good for everybody, taxpayer and government alike.”

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