COURT OF TAX APPEALS DECISIONS
ASSESSMENT IS VOID IF THE BIR ISSUES FLD/FAN 3 WORKING DAYS AFTER TAXPAYER FILED ITS REPLY TO THE PAN, EVEN IF FLD/FAN IS ISSUED AFTER THE 15-DAY PERIOD REQUIREMENT. A taxpayer has 15 days from receipt of the PAN within which to submit a written response. Moreover, as part of due process, the BIR must address the taxpayer’s defenses, otherwise the assessment is void. Thus, where the taxpayer received the PAN on February 26, 2018 and filed a reply on March 9, 2018 (on the 11th day), but the BIR issued the FAN on March 14, 2018 (even on the 16th day from issuance of PAN but only after 5 calendar days or 3 working days from filing of reply), without indication that the reply was considered; where the FAN’s findings are mere verbatim of the findings in the PAN, save for interest, without acknowledging discussing or evaluating the defenses in the reply; where BIR changed the prescriptive period in the FAN from 3 years to 10 years without specifying the basis of the invocation. the assessment is void. (Folares Pharmaceuticals Inc. v. CIR, CTA Case No. 10331, October 27, 2025)
LOA REMAINS VALID AS LONG ONE EXAMINER HAS AUTHORITY EVEN THOUGH OTHER EXAMINERS DO NOT HAVE VALID AUTHORITY. Based on McDonald’s case, only the RO authorized in the LOA may conduct the audit. There is nothing in the McDonald’s case that states that the valid authority of the examiner is nullified or affected by the lack of authority of other revenue officers. Thus, where RO Sudano, Anaban and Monforte who prepared and signed the audit reports and memorandum were not authorized under the LOA, but RO Mendoza was authorized under the LOA to examine the books, the LOA remains valid despite other examiners lack authority (Grand Union Supermarket, Inc. v CIR, CTA Case No. 10390, October 22, 2025)
A MEMORANDUM OF ASSIGNMENT SIGNED BY THE RDO IS NOT A LOA; RDO IS NOT AUTHORIZED TO ISSUE A LOA; A LOA BELATEDLY ISSUED AT THE REINVESTIGATION STAGE RENDERS THE ASSESSMENT VOID. Under the Tax Code, a revenue officer must possess proper authorization to conduct an audit through a Letter of Authority (LOA), and jurisprudence holds that any reassignment of the examining officer necessitates the issuance of a new LOA. Only the Commissioner, Deputy Commissioner, Regional Directors, or officials duly authorized by the Commissioner may issue an LOA, meaning a Revenue District Officer (RDO) lacks such authority. In this case, since RO Dela Cruz and GS Lapuz, originally named in the LOA, were transferred or reassigned, and the audit was continued by RO Muti and GS Carim under a Memorandum of Assignment signed by the RDO, with a new LOA for GS Muti issued only after the taxpayer filed a Request for Re-Investigation following the PAN and FAN, the resulting assessment is rendered void. (Ebar Abstracting Company, Inc. v. CIR, CTA Case No. 10685, October 16, 2025)
AVON CASE WILL NOT APPLY IF THE REPLY TO THE PAN IS NOT SUPPORTED WITH DOCUMENTARY EVIDENCE. Due process requires that the assessment must state the fact and on which the assessment is based. In Avon Case, the Supreme Court ruled that the BIR is mandated not only to fully inform the taxpayer of the fact and law, but to comment or address the defenses and documents submitted by the taxpayer. Here, where the taxpayer’s protest to the PAN was not at all supported by any documentary evidence, despite the fact that it raised several factual issues that can be resolved by supporting documents. Thus, the BIR cannot be faulted if it merely reiterated the same findings, without giving any reason for rejecting the unsubstantiated refutations. Thus, Avon case does not apply. (TSPI Mutual Benefit Association, Inc. v. CIR, CTA Case No. 10691, October 14, 2025)
A COOPERATIVE IS EXEMPT FROM PERCENTAGE TAX ON LIFE INSURANCE PREMIUMS; REQUISITES. A cooperative association is exempt from paying taxes on life insurance premiums if it meets the following conditions: (1) it is managed by its members; (2) it operates using funds collected from its members; and (3) it is licensed for the mutual protection of its members rather than for profit. In this case, the taxpayer satisfies these requirements: the articles of incorporation grant each member one vote, all officers are members as confirmed by the General Information Sheet and minutes of meetings, the Mutual Benefit Association’s License classifies it as a nonstock, non-profit association providing death, medical, and similar benefits to members and their families, its revenue comes from member contributions and premiums, and the Insurance Commission’s license authorizes it to operate as a mutual benefit association. (TSPI Mutual Benefit Association, Inc. v. CIR, CTA Case No. 10691, October 14, 2025)
SUBSEQUENT BUYER OF THE PROPERTY SUBJECT TO NOTICE OF LIEN AND LEVY (NOTL) IS A REAL PARTY IN INTEREST; THE RUNNING OF THE PRESCRIPTIVE PERIOD FOR TAX COLLECTION IS SUSPENDED UPON THE VALID SERVICE OF A WARRANT OF DISTRAINT AND/OR LEVY (WDL), AND THE LAW DOES NOT PROVIDE FOR ANY AUTOMATIC RESUMPTION OF THE PERIOD ONCE SUSPENDED. Where the BIR annotated Notices of Tax Lien and Levy (NOTL) on the taxpayer’s tax declarations covering certain real properties, and the taxpayer subsequently sold those properties to a buyer two years later, the buyer—although not the original taxpayer—qualifies as the real party-in-interest in challenging the validity of the NOTL. By acquiring the properties, the buyer likewise assumed the liabilities attached thereto. Being directly affected and potentially obliged to satisfy such liabilities, the buyer has a legal interest in seeking the lifting of the NOTL and stands to benefit from its cancellation. Moreover, the Supreme Court in Republic v. Hizon, does not support the theory that prescription resumes after service of a WDL, but instead recognizes that summary collection proceedings may continue beyond the statutory period once seasonably initiated. Applying this, the CTA En Banc held that the BIR’s timely service of the WDL in 2011 validly suspended the prescriptive period; moreover, the advertisement and sale of the levied properties were not required to effect suspension. Consequently, the BIR’s right to collect the 2007 deficiency taxes did not prescribe, and there was no basis to lift the NOTL. (CIR v. Boast, Inc., CTA EB No. 2812, CTA Case No. 10484, September 16, 2025)
3-YEAR PRESCRIPTIVE PERIOD TO COLLECT APPLIES IF BIR FAILED TO PROVE BASIS FOR INVOKING THE 5-YEAR PRESCRIPTIVE PERIOD. Under Section 203 of the NIRC, internal revenue taxes shall be assessed within three years from the last day of filing the return, and once assessed, the BIR has another three years to collect; extraordinary periods under Section 222, allowing up to five years for collection, apply only in cases of fraud, false returns, or failure to file, which the BIR failed to prove. In this case, petitioner received the FAN on January 4, 2017, which became final and executory on February 3, 2017, and no evidence shows any protest, waiver, or exception to extend the period. Consequently, the regular three-year period to collect expired on February 3, 2020, and the issuance of the WDL on September 28, 2021, occurred well beyond this prescriptive period, rendering the BIR’s collection effort already prescribed. (Teknologix, Inc. v. CIR, CTA Case No. 10803, October 27, 2025)
BIR CANNOT ASSESS TAXPAYER BASED ON REVOKED RULING ON WHICH THE TAXPAYER RELIED ON ABSENT BAD FAITH. While the CIR has the authority to issue, modify, or revoke BIR rulings, any revocation cannot be given retroactive effect if it would prejudice a taxpayer who relied in good faith on a prior ruling, except in cases of misstatement of facts, materially different facts, or bad faith; moreover, applying the rule of expressio unius est exclusio alterius, only those rulings expressly revoked are deemed affected. Applying these principles, the CTA En Banc held that RMC No. 55-2010 expressly revoked only specific rulings issued to another taxpayer and did not include or expressly revoke Ruling No. 178-08 issued to the instant taxpayer, which was a specific interpretative ruling based on its distinct factual circumstances; absent proof of misrepresentation or bad faith, the taxpayer was entitled to rely on Ruling No. 178-08 in good faith, and the subsequent assessment for TY 2012, anchored on an implied revocation, would unjustly prejudice it. Accordingly, the deficiency assessment, FAN, and FDDA were properly cancelled. (CIR v. JTKC Land, Inc., CTA EB No. 2800, CTA Case No. 10059; JTKC Land, Inc. v. CIR, CTA EB No. 2808, CTA Case No. 10059, August 4, 2025)CTA MAY ORDER REFUND OF GARNISHED AMOUNT IN A DISPUTED ASSESSMENT CASE. The CTA may take cognizance of a petition for refund of taxes without requiring the prior filing of an administrative claim, particularly where such a requirement would be futile or result in unnecessary delay, as in cases involving disputed assessments or amounts paid under protest. Applying this to the present case, petitioner is entitled to the refund of the garnished amount of which was released by the bank to the BIR, because the deficiency assessments were null and requiring a prior administrative claim would have been a useless formality; accordingly, the Court properly entertained the Supplemental Petition for Review and found that the refund is in order. (The Philippine Stock Exchange, Inc. v. CIR, CTA Case No. 10781, July 4, 2025)
REVENUE ISSUANCES
Revenue Regulations No. 028-2025
Pursuant to Sections 244 and 245 of the National Internal Revenue Code, these regulations mandate the use of the Enhanced eDST System for specific industries for the affixation of documentary stamps.
| Covered Entities | Financial institutions, shipping/airlines, pre-need companies, educational institutions, government agencies (NGAs, GOCCs, LGUs), and Notaries Public. |
| System Modules |
1. Deposit Module: Requires advance deposits to a ledger; tax is deducted per printing. 2. Non-Deposit Module: Immediate printing with total tax remitted by the monthly deadline. |
| Loose Stamp Limits | Restricted to documents under Section 188 with a tax due of exactly ₱30.00. Multiple loose stamps for amounts over ₱30.00 are prohibited. |
| Business Closure | Excess eDST deposits are validated and applied first against outstanding DST, then other tax liabilities; any remainder is refunded. |
| Prohibitions | Selling stamps above face value; reusing previously affixed stamps; and purchasing loose stamps for “future use” without specific authorization. |
Revenue Memorandum Circular No. 010-2026
Under the National Internal Revenue Code of 1997, cash donations must be filed through electronic platforms and supported by documentation, such as a notarized deed and proof of transfer, submitted to the BIR within thirty days. Notably, an Electronic Certificate Authorizing Registration (eCAR) is no longer required for these transactions because cash is not considered a registrable property requiring a formal transfer of title.
| Coverage | Donations consisting purely of cash made within the same calendar year. |
| Filing Method | Electronic: eBIRForms, eFPS, or accredited Taxpayer Service Providers (ATSPs). |
| Payment Method | Manual: Authorized Agent Banks (AAB); Electronic: BIR ePayment channels. |
| Jurisdiction |
Individual: Resident RDO; Non-Individual: Registered RDO; Large Taxpayers: Relevant LT Division. |
| Core Documentation |
1. Notarized Deed of Donation 2. Proof of Transfer (Deposit slips, wire confirmation, receipts) 3. BIR Form 1800 & Proof of Payment |
| Identity Verification |
1. Valid Govt IDs (for individuals) 2. Secretary’s Certificate/Board Reso (for corporations) 3. TIN of both Donor and Donee |
| Accredited Donees | Must include a Certificate of Donation and PCNC Accreditation for tax-exempt status. |
BIR DEADLINES FROM FEBRUARY 16, 2026 TO FEBRUARY 22, 2026. A gentle reminder on the following deadlines, as may be applicable:
| DATE | FILING/SUBMISSION |
| February 16, 2026 | SUBMISSION – Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers. February 1-15, 2026 |
| February 20, 2026 | e-FILING & PAYMENT (Online/Manual) – BIR Form 1600-WP (Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Racetrack Operators) – eFPS & Non-eFPS Filers. Month of January 2026 |