The BIR’s right to collect assessed taxes prescribes after five years from the date the assessment notice had been released, mailed or sent by the BIR to the taxpayer.

On February 29, 2000, the BIR issued Assessment Notices directing petitioner to pay on or before March 29, 2000 alleged deficiency excise taxes for taxable years 1991, 1992 and 1993. On May 24, 2000, taxpayer received a Formal Letter of Demand, attached to which are the Assessment Notices, requesting taxpayer to settle its alleged deficiency excise tax liabilities. Taxpayer failed to file an administrative protest. In a letter dated August 11, 2010, the BIR demanded the payment of the assessments within 10 days after receipt of the letter. The letter states that if full payment will not be received, the latter shall serve as formal notice of Warrant of Distraint and/or Levy and Garnishment with Notice of Tax Lien on all existing properties of the taxpayer. On August 17, 2010, taxpayer filed the petition for review with the CTA. On August 19, 2010, the BIR issued against the taxpayer a Warrant of Distraint and/or Levy, which was served on September 24, 2010. The taxpayer argued that the right of the BIR to collect taxes had already prescribed. The BIR argued that from the time the assessment became final, executory and demandable, it exerted sufficient efforts to collect the delinquent account. It filed on July 28, 2000 a criminal complaint against the president of the taxpayer. It also sent letters to various government offices to confirm whether taxpayer has any leviable property. Since the accused president cannot be located, his absence prevented the collection of deficiency taxes, thereby suspending the running of the prescriptive period to collect.
As ruled by the Court, when the BIR validly issues an assessment, within either the three- year or ten-year period, whichever is appropriate, the BIR has another five years after the assessment within which to collect the national internal revenue tax due thereon by distraint, levy, and/or court proceeding. The assessment of the tax is deemed made and the five-year period for collection of the assessed tax begins to run on the date the assessment notice had been released, mailed or sent by the BIR to the taxpayer. While the FLD was undated and the assessment notices were dated February 29, 2000 and received by taxpayer on May 24, 2000, there was no showing as to when the assessment notices were released, mailed or sent by the BIR. Still, it can be granted that the latest date the BIR could have released, mailed or sent the assessment notice was on the same date they were received. Counting the five-year period from May 24, 2000, the BIR only had until May 24, 2005 within which to collect the assessed deficiency taxes. Distraint and levy proceedings are validly begun by the issuance of the warrant and service on the taxpayer. Therefore, the service of the warrant on September 24, 2010 was already beyond the prescriptive period. (Atlas Consolidated Mining and Development Corporation vs. Atty. Kim S. Jacinto Henares, in her Capacity as Commissioner of Internal Revenue, CTA Case No. 8150, October 01, 2013)