Waiver of tax prescription NOT mere formality
In the landmark case of Philippine Journalists, Inc. v. CIR (PJI
case), the Supreme Court held that a
waiver is not automatically a renunciation of the right to invoke the defense
of prescription. A waiver of the Statute of Limitations is nothing more than “an agreement
between the taxpayer and the Bureau of Internal Revenue (BIR) that the period to
issue an assessment and collect the taxes due is extended to a date certain.”
It is a bilateral agreement, thus necessitating the very
signatures of both the CIR and the taxpayer
to give birth to a valid agreement. Furthermore, indicating in the waiver
the date of acceptance by the BIR is
necessary in order to determine whether the parties (the taxpayer and the
government) had entered into a waiver “before the expiration of the time
prescribed in Section 203 (the three-year prescriptive period) for the
assessment of the tax.” When the period of prescription has expired, there
will be no more need to execute a waiver as there will be nothing more to
extend. Hence,
no implied consent can be presumed,
nor can it be contended that the concurrence to such waiver is a mere
formality. (488 Phil. 219, 231-232, 2004)
It is a bilateral agreement, thus necessitating the very
signatures of both the CIR and the taxpayer
to give birth to a valid agreement. Furthermore, indicating in the waiver
the date of acceptance by the BIR is
necessary in order to determine whether the parties (the taxpayer and the
government) had entered into a waiver “before the expiration of the time
prescribed in Section 203 (the three-year prescriptive period) for the
assessment of the tax.” When the period of prescription has expired, there
will be no more need to execute a waiver as there will be nothing more to
extend. Hence,
no implied consent can be presumed,
nor can it be contended that the concurrence to such waiver is a mere
formality. (488 Phil. 219, 231-232, 2004)