Question & AnswerQ&A (KRI REVENUE MEMORANDUM CIRCULAR NO. 101-90)
The cause of action for willful failure to pay deficiency tax occurs when the final notice and demand for payment is served on the taxpayer. No violation is committed prior to this.
No, the offense is committed only after the taxpayer receives the final notice and demand and refuses to pay within the allotted period.
The 5-year prescriptive period starts after the taxpayer receives the final notice and demand and refuses to pay the deficiency tax.
In protested assessments, the 5-year prescriptive period begins from the service of the final notice and demand that disposes of the protest, not from the date of the original assessment.
An offense is considered discovered only after the manner of commission and the nature and extent of the fraud have been definitely ascertained, which occurs when the BIR renders its final decision requiring the taxpayer to pay the deficiency tax.
No, the mere discovery does not start the prescriptive period; it must be coupled with judicial proceedings such as a preliminary investigation before the Prosecutor's Office.
Tax offenses under the Tax Code are seemingly imprescriptible as long as the period between discovery, institution of judicial proceedings, and filing of information does not exceed five years.
It provides authoritative guidelines on when the cause of action for willful failure to pay deficiency tax occurs and the computation of the prescriptive period under Section 280 of the Tax Code.
Only after receipt of the final notice and demand coupled with the taxpayer's refusal to pay within the set period.
The final decision of the BIR requiring payment of the deficiency tax finalizes the discovery of the tax fraud.