COURT OF TAX APPEALS DECISIONS
AN ASSESSMENT BASED ON A MOA WITHOUT A NEW LOA IS VOID. Only the Commissioner of Internal Revenue (CIR) or duly authorized representatives may authorize the examination of taxpayers through a valid Letter of Authority (LOA) while Bureau of Internal Revenue (BIR) regulations expressly require the issuance of a new LOA whenever a case is reassigned or transferred to another RO, as a Memorandum of Assignment (MOA) cannot substitute for an LOA since authority to examine and assess taxes emanates exclusively from the CIR; assessments issued by unauthorized Revenue Officer (RO) are void ab initio. Applying these principles, the Court held that although the original audit of respondent was covered by a valid LOA issued to the originally assigned RO, the subsequent continuation of the audit by another RO, following the transfer of the original examiner, was unauthorized because she acted solely by virtue of a MOA issued by RDO and not pursuant to a new LOA as required by law and jurisprudence. Consequently, the audit investigation and the resulting Formal Letter of Demand/Final Assessment Notice (FLD/FAN) and Final Decision on Disputed Assessment (FDDA) were declared null and void for having been issued by an unauthorized examiner. The Court further held that the deficiency Value-Added Tax (VAT) assessment lacked factual and legal basis because the CIR failed to substantiate the claim that the taxpayer was liable for VAT, having failed to present the alleged sugar quedans purportedly issued in the names of individual members rather than the cooperative, while evidence showed that respondent was issued Advance Authority to Release Refined Sugar (AARR) under its own name, supporting its VAT-exempt status as previously recognized in jurisprudence. In any event, the assessment had already prescribed because the CIR had only three years from the filing of the VAT return or issuance of the AARRs to assess deficiency VAT, yet the FLD/FAN was issued beyond the prescriptive period. [Commissioner of Internal Revenue v. VMC Farmers Multi-Purpose Cooperative, CTA EB No. 2856 (CTA Case No. 9859), December 10, 2025; Commissioner of Internal Revenue v. Alan U. Chan, CTA EB No. 2988, CTA EB No. 2988 (CTA Case No. 10034), February 11, 2026; Commissioner of Internal Revenue v. Fort Palm Spring Condominium Corporation, CTA EB No. 2963 (CTA Case No. 9999), February 3, 2026]
ACTUAL RECEIPT OF PAN IS MANDATORY; IF RECEIPT IS DENIED BY THE TAXPAYER, THE BIR MUST PROVE THAT PAN IS RECEIVED; PROOF OF MAILING IS NOT SUFFICIENT; SUBSEQUENT FILING OF A PROTEST DOES NOT CURE THE DEFECT; RECEIPT OF FAN BY SECURITY GUARD WITHOUT PROOF OF AUTHORITY IS VOID. Due process requires that a taxpayer must first be validly served with a PAN informing it in writing of the factual and legal bases of the deficiency assessment, with service generally requiring personal service first, and substituted service or service by mail allowed only when personal service is impracticable; jurisprudence consistently holds that actual receipt by the taxpayer is indispensable, and where receipt is denied, the burden shifts to the BIR to prove by competent evidence that the assessment notice was actually received, as mere proof of mailing or registry receipts alone are insufficient. Applying these rules, the Court found that although the BIR presented a registry receipt showing that the PAN was mailed to the taxpayer’s registered address, it failed to prove actual receipt because no registry return card, acknowledgment receipt, or any competent evidence was presented showing that the taxpayer or its authorized representative actually received the PAN, and the BIR likewise failed to prove its alleged personal service. On the contrary, the taxpayer presented evidence that the mailed PAN was returned to sender, directly disputing receipt and shifting the burden of proof to the BIR, which it failed to discharge. Moreover, the taxpayer’s subsequent filing of a protest did not cure the defect, as Supreme Court jurisprudence has consistently held that the BIR’s failure to strictly comply with due process requirements cannot be remedied simply because the taxpayer later participated in the proceedings. Accordingly, because the PAN was not validly served, the entire assessment process was fatally defective, warranting the cancellation of the FLD/FAN, FDDA, Preliminary Collection Letter (PCL), and Final Notice Before Seizure (FNBS), all of which were declared null and void. [Commissioner of Internal Revenue v. JTKC Land, Inc., CTA EB No. 2914 (CTA Case No. 9508), February 26, 2026]; the Court held that the CIR failed to establish valid service of the FAN/FLD dated January 14, 2020 despite evidence that the notices were sent through courier and allegedly received by “SG Carillo,” because no proof was presented showing that such recipient was authorized to receive assessment notices on behalf of the taxpayer, and the CIR in fact failed to authenticate the notation on the courier receipt or establish the recipient’s authority. The Court likewise rejected the argument that the taxpayer’s alleged failure to formally notify the BIR of a change of address cured the defect, ruling that non-compliance with an administrative requirement cannot validate an assessment already void for lack of due process. Since a void assessment produces no legal effect, the deficiency tax assessments never became final, executory, or demandable, rendering the subsequent WDL and WG likewise void and unenforceable. Further, because the Commissioner failed to prove valid receipt of the FLD/FAN within the 3-year prescriptive period, the right to assess deficiency taxes had already prescribed. [Commissioner of Internal Revenue v. Ship to Shore Medical Assist, Inc., CTA EB No. 3029 (CTA Case No. 10550), February 26, 2026; Commissioner of Internal Revenue v. Alan U. Chan, CTA EB No. 2988, CTA EB No. 2988 (CTA Case No. 10034), February 11, 2026; Commissioner of Internal Revenue v. Fort Palm Spring Condominium Corporation, CTA EB No. 2963 (CTA Case No. 9999), February 3, 2026]
FLD/FAN RECEIVED A DAY AFTER THE TAXPAYER REPLIED TO THE PAN IS VOID; FDDA WILL NOT CURE THE DEFECT. The BIR is mandated to inform taxpayers in writing of both the factual and legal bases of an assessment, and jurisprudence establishes that due process requires the BIR not only to receive the taxpayer’s reply to a PAN but to meaningfully consider and specifically address the defenses raised before issuing the FLD/FAN otherwise the assessment is void; applying these principles, although the taxpayer timely filed its Reply to PAN on January 22, 2015 disputing the disallowance of management fees, the BIR issued the FLD/FAN the very next day, January 23, 2015, with the Details of Discrepancy merely duplicating the PAN almost word-for-word except for updated surcharges and interest, and the BIR’s own witness admitted during cross-examination that the FLD was simply a reiteration of the PAN and contained no discussion whatsoever of the taxpayer’s arguments, demonstrating that the taxpayer’s explanations were never meaningfully considered at the PAN stage, thereby rendering the right to be heard illusory and constituting a violation of due process that was not cured by the later issuance of the FDDA, resulting in the nullity of the assessment [Commissioner of Internal Revenue v. Altimax Broadcasting Co., Inc., CTA EB No. 2932 (CTA Case No. 10285), February 10, 2026]
FLD/FAN RECEIVED 8 DAYS AFTER RECEIPT OF THE PAN RENDERS THE ASSESSMENT VOID. A taxpayer who receives a PAN must be given a mandatory 15-day period within which to respond before the BIR may issue a FLD/FAN as this period forms an essential component of procedural due process. Applying these principles, the Court held that the CIR violated the taxpayer’s right to due process when the PAN was received on January 7, 2014, giving the taxpayer until January 22, 2014 to respond, yet the FLD/FAN was issued and received on January 15, 2014, only eight days after receipt of the PAN and seven days before expiration of the statutory response period. The Court rejected the CIR’S argument that due process was substantially complied with merely because the taxpayer was notified of the assessment and was later able to file a protest, emphasizing that disregard of the 15-day grace period is not a minor procedural defect but a fatal violation of the taxpayer’s constitutional right to due process. Thus, the premature issuance of the FLD/FAN invalidated the entire assessment process [Commissioner of Internal Revenue v. Health Plan Philippines, Inc., CTA EB No. 3134 (CTA Case No. 10262), December 5, 2025].
BIR’S GENERIC STATEMENT IN THE FLD/FAN WITHOUT GENUINE EVALUATION OF TAXPAYER’S REPLY TO THE PAN RENDERS THE ASSESSMENT VOID. Due process in tax assessments requires not only that the taxpayer be given an opportunity to respond to a PAN, but also that the BIR genuinely consider the taxpayer’s explanations and specifically state the factual and legal reasons for rejecting them, as failure to do so renders the assessment void; applying these principles, the BIR completely disregarded its explanations, as shown by the FLD/FAN merely reproducing the PAN and identical Details of Discrepancies with no meaningful discussion of respondent’s defenses, while the generic statement that the taxpayer failed to submit sufficient evidence did not specifically address any substantive arguments raised, demonstrating that no genuine evaluation was undertaken and reducing the PAN process to a meaningless formality, thereby violating respondent’s right to due process and nullifying the assessment [Commissioner of Internal Revenue v. Bio-Resource Power Generation Corporation, CTA EB No. 3021 (CTA Case No. 10372), November 27, 2025; CIR v. Beta Electromechanical Corporation, CTA EB No. 2950 (CTA Case No. 10040), February 25, 2026; CPW Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10665, February 13, 2026].
FLD/FAN WITHOUT DUE DATE OF PAYMENT IS VOID. A valid FLD/FAN must contain not only the amount of deficiency tax assessed but also a definite and specific due date for payment, since a final assessment must embody an actual and unequivocal demand for payment; absent such definite payment period, the assessment violates due process and is void. Applying this rule, the Court found that the FLD/FAN issued by the BIR is invalid because, although they stated the deficiency taxes allegedly due and instructed payment through authorized channels, the spaces provided for the due date of payment in every attached FANs were completely left blank. This defect was not merely technical, as the RO repeatedly admitted during cross-examination that no due date was indicated in any of the FANs attached to both the FLD and even the subsequent FDDA. The Court’s own review of the records confirmed the same absence of any specific payment deadline, demonstrating that there was no actual and enforceable demand for payment as required by law [Commissioner of Internal Revenue v. Major Shopping Management Corporation, CTA EB No. 2970 (CTA Case No. 9300), February 12, 2026].
FLD/FAN WITH DEADLINE EARLIER THAN DATE OF ISSUANCE IS VOID; INTEREST COMPUTATION BEYOND THE DUE PAYMENT DEADLINE ALSO RENDERS THE FLD/FAN VOID. A valid FLD/FAN is a substantive prerequisite to tax collection and must not merely compute tax liabilities, but must also contain a clear and definite demand for payment specifying both the exact amount due and a specific future due date within which the taxpayer may comply; otherwise, the assessment is void for violating due process. Applying this rule, the Court found that although the BIR validly conducted the audit, the FLD/FAN issued against respondent suffered from incurable defects because it failed to state a definite due date and merely referred to attached Assessment Notices, which reflected a payment deadline of January 7, 2018 despite the FAN being issued only on December 7, 2018, making compliance legally impossible. The Court further ruled that even assuming the stated date was a typographical error and the intended deadline was January 7, 2019, the assessment still lacked definiteness because the interest computations extended up to January 11, 2019, four days beyond the supposed due date, thereby creating uncertainty as to the actual amount payable and undermining the requirement that tax liability be fixed and determinable. Since a valid assessment must provide the taxpayer a fair opportunity to know the precise liability and comply within a legally enforceable period, the ambiguity in both the due date and the computation of interest rendered the FAN legally ineffective. [Commissioner of Internal Revenue v. IBMS Technology Phils., Corporation, CTA EB No. 2999 (CTA Case No. 10177), Decision dated December 15, 2025]
OSG’S RECEIPT OF RESOLUTION IS THE RECKONING POINT OF APPEAL TO THE CTE EN BANC, NOT BIR’S. A party adversely affected by a Division decision or resolution must file a Petition for Review within fifteen (15) days from receipt, and jurisprudence consistently provides that in cases involving the government, the reckoning of the appeal period is based on receipt by the Office of the Solicitor General (OSG), as principal counsel, and not by deputized government lawyers who merely act as its representatives; applying these rules, although the CIR relied on the BIR deputized counsel’s receipt of the assailed Resolution on October 21, 2024, records showed that the OSG had already received the Resolution earlier on October 15, 2024, making October 30, 2024 the deadline to file either a Petition for Review or motion for extension, yet CIR filed the motion for extension only on November 4, 2024 and the Petition for Review on November 19, 2024, both beyond the reglementary period, thereby rendering the assailed Resolution final and executory by operation of law and depriving the Court of jurisdiction to entertain the appeal [Commissioner of Internal Revenue v. Bio-Resource Power Generation Corporation, CTA EB No. 3021 (CTA Case No. 10372), November 27, 2025]
LESSEE MAY BE SUBJECT TO DST FOR FAILURE TO PROVE THAT LESSOR PAID THE SAME OR IT IS EXEMPT. A Documentary Stamp Tax (DST) is imposed on every lease, agreement, memorandum, or contract for the use or rental of land or tenements; moreover, DST shall be paid by the person making, signing, issuing, accepting, or transferring the taxable document, unless the other party is exempt. Applying these provisions, the Court sustained the deficiency DST assessment against the taxpayer and rejected its argument that the lessor, as recipient of rental income, should be solely liable, holding that the law does not assign DST liability exclusively to the lessor and the taxpayer failed to prove that the lessor paid the DST or the taxpayer was exempt from liability under the lease agreement. The Court likewise upheld the DST assessment on future lease commitments, finding that the amounts disclosed in the audited financial statements represented fixed future minimum rental payments arising from a long-term lease contract renewed for years, covering the land where the supermarket and department store operated, and thus constituted taxable obligations subject to DST for each year of the contract term. [Commissioner of Internal Revenue v. The Landmark Corporation, CTA EB No. 2904 (CTA Case No. 9317), February 23, 2026].
REVENUE ISSUANCES
Revenue Regulations No. 004-2026
One-Time Abatement of Taxes and/or Penalties for Micro Taxpayers
| Item | Details |
| Date Issued | June 22, 2026 |
| Availment Period | Until December 31, 2026 |
| Qualified Taxpayers | Micro taxpayers with gross annual sales not exceeding Php3,000,000 (for mixed-income earners, gross sales cover only business income excluding compensation from employer-employee relationship) |
| Liability Threshold | Covered basic tax liabilities and/or penalties must not exceed Php80,000 per taxable year |
| Covered Cases |
1. Delinquent accounts 2. Cases with administrative protest pending the BIR office 3. Tax cases disputed before the DOJ and courts 4. Tax collection cases with courts 5. Cases with pending request for compromise settlement 6. Cases with pending request for abatement 7. Criminal violations, except those already filed in court |
| Cut-off Date of Covered Cases | Liabilities/cases existing on or before December 31, 2025 |
| Application Venue | Revenue District Office (RDO) with jurisdiction over taxpayer |
| Abatement Fee | Php5,000 one-time fee per approved application |
| Result Upon Approval | Issuance of Certificate of Availment confirming settlement and closure of case |
Revenue Memorandum Circular No. 64-2026 Requires all digital economic participants to systematically generate and display a QR-enabled Registration Seal Badge through the BIR’s Online Registration and Update System (ORUS).
| Application | Applies directly to all taxpayers with an online presence, specifically targeting e-commerce merchants, digital content creators, freelancers, vloggers, and electronic service providers who operate commercial storefronts across digital platforms like Shopee, Lazada, TikTok Shop, or standalone domains. |
| Operational Mandates | Covered entities are strictly prohibited from exposing their full, sensitive Certificate of Registration (COR/eCOR) online to protect data privacy. Instead, they must enroll in the Online Registration and Update System (ORUS) to download and display a dedicated, standardized digital Registration Seal Badge. |
| Financial and Tax Obligation | While the generation of the badge graphic itself is provided free of charge by the Bureau, processing registration data updates or pulling system data through the portal requires the direct electronic payment of a Php30 loose Documentary Stamp Tax (DST) per transaction. |
| Public Verification Mechanics | The generated digital badge must be displayed prominently in an unaltered format on public-facing channels (e.g., “About Us” tabs, platform profiles). It features an embedded QR code linking to the official verification portal, allowing consumers and relying parties to audit business legitimacy without exposing sensitive taxpayer identification details. |
BIR DEADLINES FROM JUNE 22, 2026 TO JUNE 28, 2026. A gentle reminder on the following deadlines, as may be applicable:
| DATE | FILING/SUBMISSION |
| June 25, 2026 | SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayer. Non-eFPS Filers – Fiscal Quarter ending May 31, 2026 |
| SUBMISSION – Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of each particular Brand of Alcohol Products, Tobacco Products and Sweetened Beverage Products – Fiscal Quarter ending May 31, 2026 | |
| eFILING & PAYMENT (Online/Manual) – BIR Form 2550Q (Quarterly Value-Added Tax Return). eFPS & Non-eFPS Filers. Fiscal Quarter ending May 31, 2026 | |
| eFILING & PAYMENT (Online/Manual) – BIR Form 2551Q (Quarterly Percentage Tax Return). eFPS & Non-eFPS Filers. Fiscal Quarter ending May 31, 2026 | |
| eFILING & PAYMENT (Online/Manual) – BIR Form 2550-DS (Value-Added Tax Return for Nonresident Digital Service Provider). Fiscal Quarter ending May 31, 2026 |