From the Answers to Bar Exam (1996) BIR: Compromise; Extent of Authority: Explain the extent of the authority of the Commissioner of Internal Revenue to compromise and abate taxes? SUGGESTED ANSWER:The authority of the Commissioner to compromise encompasses both civil and criminal liabilities of the tax- payer. The civil compromise is allowed only in cases12) where the tax assessment is of doubtful validity, or 13) when the financial position of the taxpayerdemonstrates a clear inability to pay the tax.The compromise of the tax liability is possible at any stage of litigation and the amount of compromise is left to the discretion of the Commissioner except with respect to final assessments issued against large taxpayerswherein the Commissioner cannot compromise for less than fifty percent (50%). Any compromise involving large taxpayers lower than fifty percent (50%) shall be subject to the approval of the Secretary of Finance.All criminal violations except those involving fraud, can be compromised by the Commissioner but only prior to the filing of the information with the Court. The Commissioner may also abate or cancel a tax liability when1. the tax or any portion thereof appears to have been unjustly or excessively assessed; or2. the administrative and collection costs involved do not Justify collection of the amount due. (Sec. 204, NIRC)
Posted on: Sun, 01 Dec 2013 09:46:05 +0000
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