Key Handling BIR Assessments: Understanding the Process and Protecting Your Rights

Navigating a Bureau of Internal Revenue (BIR) tax assessment can be complex, but understanding the process empowers businesses and taxpayers to respond correctly and safeguard their rights. The recent presentation, “Key Handling BIR Assessment,” outlined the proper procedures, timelines, and remedies available under the National Internal Revenue Code (NIRC) and relevant Revenue Regulations (RRs).

The BIR Assessment Process

As explained in the overview on page 2, the Department of Finance, through Revenue Regulations 12-1999, established procedures for tax assessments — later updated by RR 18-2013, RR 7-2018, and most recently RR 22-2020.

These regulations ensure that taxpayers are informed and given the opportunity to discuss or contest BIR findings during investigations.

The flowchart on pages 3–7 detailed the step-by-step process:

1. Notice of Discrepancy (NoD) – Issued before the Preliminary Assessment Notice (PAN). Taxpayers have 30 days to reply and discuss discrepancies.

2. Preliminary Assessment Notice (PAN) – Issued if issues remain unresolved, within 10 days after the NoD discussion.

3. Formal Assessment Notice (FAN) – Formalizes the assessment within another 10 days.

4. Filing a Protest – Taxpayers have 30 days from receipt of the FAN to file a protest (for reconsideration or reinvestigation), followed by submission of supporting documents within 60 days.

5. Decision and Appeal – The BIR Commissioner must decide within 180 days. If denied or unresolved, taxpayers may appeal to the Court of Tax Appeals (CTA) within 30 days.

Remedies Available to Taxpayers

Part 2 of the presentation (pages 10–11) emphasized two primary remedies:

• Disputing an Assessment – Filing a protest or motion for reconsideration/reinvestigation, and if needed, elevating the case to the CTA.

• Recovery of Erroneously Paid Taxes – Filing a claim for refund within two years from payment, with the option of judicial remedies if denied.

Key Takeaways

Properly handling BIR assessments ensures fairness and compliance. When followed diligently, the process allows taxpayers to:

• Clarify issues raised by the BIR

• Submit supporting documentation

• Seek redress before higher authorities if necessary

By maintaining accurate records, adhering to deadlines, and engaging qualified tax professionals, businesses can transform what is often a stressful procedure into a transparent, well-managed process that upholds their rights.