Remedies of Taxpayers Against Tax Audits: Understanding Your Rights and Legal Options

Navigating a tax audit can be challenging, but understanding your rights and remedies as a taxpayer is essential in ensuring fair treatment under Philippine tax law. The recent presentation, “Remedies of Taxpayer Against Tax Audit,” provided a comprehensive overview of the legal framework that governs tax disputes — from the National Internal Revenue Code (NIRC) and Court of Tax Appeals (CTA) to the Local Government Code (LGC).

Before and After Payment of Tax

The discussion began with the administrative and judicial remedies available to taxpayers both before and after payment. These include:

• Filing protests against assessments

• Pursuing compromises

• Seeking refunds or tax credits in cases of overpayment

Judicially, taxpayers may elevate disputes to the Court of Tax Appeals (CTA) for independent review.

The Tax Assessment Process

A detailed flow (see pages 22–26) explained how the Bureau of Internal Revenue (BIR) conducts assessments, starting from:

• Issuance of a Letter of Authority (LOA)

• Release of a Preliminary Assessment Notice (PAN)

• Issuance of a Final Assessment Notice (FAN)

The presentation emphasized that a valid assessment must clearly state the facts and legal bases for the tax demand, ensuring transparency and due process.

Remedies Against BIR Decisions

If the BIR fails to act on a taxpayer’s protest within 180 days, or issues a denial, the taxpayer may:

• Appeal to the CTA within the prescribed period

• Follow timelines and procedural flowcharts (see pages 34–35) for administrative appeals and judicial remedies

These reminders underscore the importance of timely filings to preserve taxpayer rights under the law.

Refunds, Compromises, and Abatement

The latter part of the session highlighted relief mechanisms such as:

• Claims for tax refunds

• Compromise settlements

• Abatements

These apply in cases of overpayment, financial incapacity, or unjust assessments, giving taxpayers practical options to resolve disputes without litigation.

Key Takeaway

The presentation concluded that the remedies available to taxpayers are designed to balance enforcement and fairness. By knowing when and how to exercise these rights — whether through administrative action, judicial appeal, or compromise — businesses and individuals can protect their interests while maintaining compliance with Philippine tax laws.