Tax Accounting, Taxpayer University teaches

Preliminary Assessment – refers to an initial or tentative assessment that is made when it is determined that there exist sufficient basis to assess the taxpayer for any deficiency tax or taxes. A notice on the preliminary assessment is being formally issued and the same must show, in detail, the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based. As a rule, the taxpayer is accorded the chance to respond to the proposed assessment fifteen (15) days from receipt thereof; otherwise, he will be considered in default, and a formal letter of demand and final assessment notice calling for the payment of the deficiency tax liability, inclusive of the applicable penalties, shall be caused to be issued.

8. Final Assessment – refers to a formal assessment issued against a taxpayer which accompanies the formal demand letter that contains the statement of the facts, the law, rules and regulations, or jurisprudence on which an assessment is made.

9. Undisputed Final Assessment – is an assessment that was not protested within the time allowed by law thereby making the same final, executory and demandable.

10. Disputed Assessment – refers to an assessment made where the taxpayer contests the legality or validity of the assessment and request that the same be cancelled or withdrawn.

11. Erroneous Assessment – refers to an assessment made by a person who has the authority to act but the same is erroneous or he errs in the exercise of that power.

12. Letter of Demand – refers to the formal communication issued to the taxpayer calling for the payment of final deficiency tax assessment, including all applicable penalties. In order to be considered valid, the formal demand letter must clearly state, in detail, the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based.

13. Request for Reconsideration – refers to a plea for a re-evaluation of an assessment on the basis of existing records without the need of additional evidence. It may involve both a question of fact or of law or both.

14. Request for Reinvestigation – refers to a plea for a re-evaluation of an assessment on the basis of newly discovered or additional evidence that a taxpayer intends to present in the reinvestigation. It may also involve a question of fact or law or both.

15. Basic tax due - refers to any of the following:

a. Unpaid tax shown on the return filed;

b. Tax due shown on the assessment notice and letter of demand, excluding surcharge, interest and suggested compromise penalty;

c. Unpaid second installment of income tax due per return filed; and

d. Amount of dishonored check.

CM 301 Assignment of Dockets for Collection ENFORCEMENT [Refer to FC 301]

The Assessment Division of the Regional Office/LTS shall forward the Monthly Summary of Taxes Assessed (BIR Form No. 40.00)(Annex 300-1.1),for both the unprotested/delinquent and the protested assessments, and the dockets listed therein to the concerned RDO/LT Audit Divisions/LTDO, thru the Regional Administrative Division/Records Division in the National Office (NO). The copies of these monthly reports shall likewise be transmitted to the concerned Regional Collection Division and the Collection Enforcement Division in the national office.

For cases or dockets emanating from the National Investigation Division (NID) in the National Office, the BIR Form No. 40.00 and the case dockets shall be forwarded to the
concernedhome RDO of the taxpayer, thru the Records Division, forthe necessaryenforcement of collection thru summary administrative remedies.

The Regional Administrative Division/Records Division in the National Office shall:

Receive BIR Form No. 40.00 and the dockets for microfilming/scanning/imaging of dockets. As a rule, all dockets of tax cases involving an amount of Php10,000.00 or over, dockets of court cases irrespective of the amount, and dockets of less than Php10,000.00 where the microfilming thereof has been recommended by the department head concerned shall be forwarded to the Records Division for microfilming before the assessment notices or demand letters are sent to the taxpayers concerned or before the tax case is filed in court.

Batch the dockets in a maximum of 10 dockets per batch and transmit the dockets and copies of BIR Form No. 40.00 to the RDO/LTDO/LTCED having jurisdiction over the case; and

Furnish the Collection Division of the Regional Office/CED with the copy of BIR Form No. 40.00 reports.

The Collection Division of the Regional Office/LTS shall record and index the dockets listed in BIR Form No. 40.00 for monitoring purposes. All items/information found in BIR Form No. 40.00 shall be transcribedto the index card.