Considering the prescriptive period to assess, the Final Assessment Notice (FAN)/ Final
Letter of Demand (FLD) should be issued by the BIR Commissioner or his duly
authorized representative within such prescribed period, unless there is a waiver of said
statute of limitations to assess as agreed between the BIR and the taxpayer. The
FAN/FLD, which requires the payment of the assessed deficiency taxes, should state the
facts, the law, rules and regulations, or jurisprudence on which the assessment is based;
otherwise, the formal letter of demand and assessment notice shall be void.
Likewise, service of the FAN/FLD to the taxpayer should be made only by registered mail or by personal delivery. If sent by personal delivery, the taxpayer or his duly authorized representative shall acknowledge receipt thereof in the duplicate copy of the letter of demand, showing the following: (a) His name; (b) signature; (c) designation and authority to act for and in behalf of the taxpayer, if acknowledged received by a person other than the taxpayer himself; and (d) date of receipt thereof.
It is therefore imperative on the part of the tax authorities to comply with these requirements in order to validly assert the right of the Government to assess and collect the correct taxes from the taxpayers. The necessity of these requirements is recognized by the Supreme Court in one case, in which it held that “the issuance of a valid formal assessment is a substantive prerequisite to tax collection, for it contains not only a computation of tax liabilities but also a demand for payment within a prescribed period, thereby signaling the time when penalties and interests begin to accrue against the taxpayer and enabling the latter to determine his remedies therefor. Due process requires that it must be served on and received by the taxpayer.”
For more info, please register or enrol @ TaxationProfessionalUniversity.com
Likewise, service of the FAN/FLD to the taxpayer should be made only by registered mail or by personal delivery. If sent by personal delivery, the taxpayer or his duly authorized representative shall acknowledge receipt thereof in the duplicate copy of the letter of demand, showing the following: (a) His name; (b) signature; (c) designation and authority to act for and in behalf of the taxpayer, if acknowledged received by a person other than the taxpayer himself; and (d) date of receipt thereof.
It is therefore imperative on the part of the tax authorities to comply with these requirements in order to validly assert the right of the Government to assess and collect the correct taxes from the taxpayers. The necessity of these requirements is recognized by the Supreme Court in one case, in which it held that “the issuance of a valid formal assessment is a substantive prerequisite to tax collection, for it contains not only a computation of tax liabilities but also a demand for payment within a prescribed period, thereby signaling the time when penalties and interests begin to accrue against the taxpayer and enabling the latter to determine his remedies therefor. Due process requires that it must be served on and received by the taxpayer.”
For more info, please register or enrol @ TaxationProfessionalUniversity.com
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