Freight company wins tax case against BIR

The Court of Tax Appeals has allowed an appeal by a freight forwarding company to have its deficiency taxes for the 2009 calendar year waived.

In a 33-page resolution dated March 14, the court ruled that the letter of demand from the Bureau of Internal Revenue (BIR) commissioner was void. The Court of Appeal also ordered the BIR to refrain from any other action related to the collection of said taxes.

Executive International Movers, Inc., the petitioner, is a national company engaged in the general business of freight and freight forwarding.

The court said the company’s appeal was filed on time, giving it jurisdiction to decide the case.

“The tax officials who continued to verify the investigation of the petitioner were not authorized by a valid authorization letter; therefore, the resulting tax assessments are void,” the court said in its decision.

The revenue officers originally assigned to assess the company’s books of accounts were authorized by a letter of authorization from a BIR regional manager.

However, the tax officials responsible for continuing the examination of the company’s books of accounts were only mandated by an engagement brief without a letter of authorization.

The tax court cited the country’s tax code, which provides that to grant a revenue officer authority to collect and assess taxes, a letter of authorization issued by regional directors and commissioners of the BIR is required.

“The reassignment or transfer of a revenue officer requires the issuance of a new or amended letter of authorization for the alternate or replacement revenue officer to continue the audit or investigation,” the court said. — John Victor D. Ordonez

Comments are closed.