RMC No. 11-2014: Clarifies certain issues relative to due process requirement in the issuance of a deficiency tax assessment pursuant to Revenue Regulations (RR) No. 12-99, as amended by RR No. 18-2013

Key points

1. Who issues and receives responses. The “duly authorized representative” who issues the PAN, FLD/FAN and FDDA means the Revenue Regional Directors, the Assistant Commissioner – Large Taxpayers Service and the Assistant Commissioner – Enforcement and Advocacy Service. Under RMC No. 39-2013, responses to a PAN and protests to an FLD/FAN are filed with the representative who signed it. Protests elevated to the Commissioner after inaction or an adverse decision are filed with the Office of the Commissioner.
2. Denial and final demand. An FLD/FAN that repeats the immediate payment demanded in the PAN is a denial of the response to the PAN. A final demand letter for payment of delinquent taxes may be considered a decision on a disputed assessment, including a disputed PAN. Due process is met if the parties could explain their side.
3. Late FLD/FAN. An FLD/FAN issued beyond 15 days from the taxpayer’s response to the PAN is still valid if issued within the period of limitation to assess. The delay is an administrative infraction, and the Revenue Officers who caused it face administrative sanctions.
4. Documents for reinvestigation. A taxpayer who requested reinvestigation and does not submit all supporting documents within 60 days from filing the protest makes the FLD/FAN final by operation of law. The taxpayer is barred from presenting new or additional evidence, and the BIR then denies the request through an FDDA.
5. Service of notices. The PAN, FLD/FAN and FDDA are served first on the registered address before the known address, or on both addresses simultaneously. Before the PAN is issued, the taxpayer may be allowed to voluntarily pay probable deficiency taxes and penalties.

Who is affected

• Taxpayers receiving a PAN, FLD/FAN or FDDA
• Revenue Officers

Deadlines and effectivity

• FLD/FAN due within 15 days from the response to the PAN
• Documents for reinvestigation due within 60 days from filing the protest
• Issued February 19, 2014