RMO No. 26-2016: Prescribes the policies and guidelines in handling disputed assessments

Key points

1. Before the FDDA and PAN stage. A taxpayer must be given a chance to explain its objection and present documents before an FDDA is issued. A Protest against a Preliminary Assessment Notice (PAN) is optional. The Formal Letter of Demand and Final Assessment Notice (FLD/FAN) is issued fifteen (15) days from the taxpayer’s receipt of the PAN, whether or not protested.
2. Protest to the FLD/FAN. Within thirty (30) days from receipt, the taxpayer accepts and pays in full or part, or protests fully or partially. The remedies are a request for reconsideration, when no additional evidence is submitted, or a request for reinvestigation on newly-discovered evidence or additional documents. Filing one precludes the other, and reinvestigation is not available after an FDDA is issued.
3. Reinvestigation documents. Supporting documents must be submitted within sixty (60) days from filing the protest letter, and evaluation uses only documents submitted in that period. Failure makes the assessment final and executory, and collection remedies such as garnishment, warrant and levy follow.
4. Payments and FDDA. Accepted amounts are paid using Payment Form 0605. An FDDA is issued for the unsettled portion, and an Authority to Cancel Assessment (ATCA) for portions resolved in the taxpayer’s favor. An FDDA is issued automatically if the protest is not acted upon within 180 days and the taxpayer appeals to the Court of Tax Appeals within 30 days after the 180-day period.
5. After the FDDA. If the FDDA was issued by the Commissioner’s authorized representative, the taxpayer has thirty (30) days from receipt to file a motion for reconsideration with the CIR or appeal to the CTA. The appeal states it covers only the unsettled portion and attaches the paid Form 0605. Voluntary settlement remains possible during appeal.
6. When an assessment becomes final. This happens on failure to file a valid protest within 30 days from receipt of the FLD/FAN, to submit documents within 60 days, or to appeal within 30 days from receipt of the FDDA. It also happens on failure to timely file a CTA motion or appeal, or when notices were served at the BIR-registered address and the taxpayer moved or closed without updating its registration.

Who is affected

• Taxpayers with disputed assessments

Deadlines and effectivity

• FLD/FAN issued 15 days from receipt of PAN
• Protest within 30 days from receipt of FLD/FAN
• Supporting documents within 60 days from filing of protest
• Appeal within 30 days from receipt of FDDA