marcos v ca digest
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MARCOS II v. CA (1997) DOCTRINE: In case of failure to file a return, the tax may be assessed at any time within ten years after the omission, and any tax so assessed may be collected by levy upon real property within three years followin the assessment of the tax. Since the estate tax assessment had become final and unappealable by the petitioner!s default as re ards protestin the validity of the said assessment, there is now no reason why the "IR cannot continue with the collection of the said tax. #AC$S% Short version: Ferdinand R. Marcos II the e!dest son o" the decedent #$estions the act$ations o" the res%ondent Co&&issioner o" Interna! Reven$e in assessin' and co!!ectin' thro$'h the s$&&ar( re&ed( o" )ev( on Rea! *ro%erties estate and inco&e ta+ de!in#$encies $%on the estate and %ro%erties o" his "ather des%ite the %endenc( o" the %roceedin's on %ro,ate o" the -i!! o" the !ate %resident. )on' version: On Se%te&,er .9 19/9 "or&er *resident Ferdinand Marcos died in 0ono!$!$ 0a-aii 1S2. On 3$ne .7 1994 a S%ecia! Ta+ 2$dit Tea& -as created to cond$ct investi'ations and e+a&inations o" the ta+ !ia,i!ities and o,!i'ations o" the !ate %resident as -e!! as that o" his "a&i!( associates and 5cronies5. Said a$dit tea& conc!$ded its investi'ation -ith a Me&orand$& dated 3$!( .6 1991. The investi'ation disc!osed that the Marcoses "ai!ed to "i!e a -ritten notice o" the death o" the decedent an estate ta+ ret$rn as -e!! as severa! inco&e ta+ ret$rns coverin' the (ears 19/. to 19/6 a!! in vio!ation o" the NIRC. The Co&&issioner o" Interna! Reven$e there,( ca$sed the %re%aration and "i!in' o" the Estate Ta+ Ret$rn "or the estate o" the !ate %resident. On 3$!( .6 1991 the 7IR iss$ed De"icienc( estate ta+ assess&ent (a'ainst the estate o" the !ate %resident Ferdinand Marcos in the a&o$nt o" *.8 .98 647 68/.44 *esos). The Co&&issioner o" Interna! Reven$e avers that co%ies o" the de"icienc( estate and inco&e ta+ assess&ents -ere a!! %ersona!!( and constr$ctive!( served on 2$'$st .6 1991 and Se%te&,er 1. 1991 $%on Mrs. I&e!da Marcos (thro$'h her careta9er Mr. Martine:) at her !ast 9no-n address at No. .4; Orte'a St. San 3$an M.M. Therea"ter For&a! 2ssess&ent notices -ere served on Octo,er .4 199. $%on Mrs. Marcos c<o %etitioner at his o""ice 0o$se o" Re%resentatives. Moreover a notice to Ta+%a(er invitin' Mrs. Marcos (or her d$!( a$thori:ed re%resentative or co$nse!) to a con"erence -as "$rnished the co$nse! o" Mrs. Marcos Dean 2ntonio Corone! = ,$t to no avai!. $he deficiency tax assessments were not protested administratively, by Mrs. Marcos and the other heirs of the late president, within &' days from service of said assessments. 7IR Co&&issioner iss$ed tota! o" 84 notices o" !ev( on rea! %ro%ert( a'ainst certain %arce!s o" !and o-ned ,( the Marcoses = to satis"( the a!!e'ed estate ta+ and de"icienc( inco&e ta+es o" S%o$ses Marcos. Notices o" sa!e at %$,!ic a$ction -ere %osted on Ma( .6 1998 at the !o,,( o" the Cit( 0a!! o" Tac!o,an Cit(. The %$,!ic a$ction "or the sa!e o" the 11 %arce!s o" !and too9 %!ace on 3$!( > 1998. There ,ein' no ,idder the !ots -ere dec!ared "or"eited in "avor o" the 'overn&ent. A()% On 3$ne .> 1998 ?7on',on'? Marcos II "i!ed the instant %etition "or certiorari and %rohi,ition -ith %ra(er "or TRO and<or -rit o" %re!i&inar( in@$nction. CA% Dis&issed %etition. Marcos II a%%ea!ed to SC. MARCOS AR*% 1. Notices o" !ev( notices o" sa!e and s$,se#$ent sa!e o" %ro%erties o" the !ate *resident Marcos e""ected ,( the 7IR are n$!! and void "or disre'ardin' the esta,!ished %roced$re "or the en"orce&ent o" ta+es d$e $%on the estate o" the deceased. The ordinar( %roced$re ,( -hich to sett!e c!ai&s o" inde,tedness a'ainst the estate o" a deceased %erson as in an inheritance estate) ta+ is "or the c!ai&ant to %resent a c!ai& ,e"ore the %ro,ate co$rt so that said co$rt &a( order the ad&inistrator to %a( the a&o$nt there"or.
.. The %ro,ate co$rt is not %rec!$ded "ro& den(in' a re#$est ,( the 'overn&ent "or the i&&ediate %a(&ent o" ta+es and sho$!d order the %a(&ent o" the sa&e on!( -ithin the %eriod "i+ed ,( the %ro,ate co$rt "or the %a(&ent o" a!! the de,ts o" the decedent. C!ai&s "or %a(&ent o" estate and inco&e ta+es d$e and assessed a"ter the death o" the decedent need not ,e %resented in the "or& o" a c!ai& a'ainst the estate.The %ro,ate co$rt is not the 'overn&ent a'enc( to decide -hether an estate is !ia,!e "or %a(&ent o" estate o" inco&e ta+es. "IR CO)$+)$IO)% 1. The state?s a$thorit( to co!!ect interna! reven$e ta+es is %ara&o$nt. Th$s the %endenc( o" %ro,ate %roceedin's over the estate o" the deceased does not %rec!$de the assess&ent and co!!ection thro$'h s$&&ar( re&edies o" estate ta+es over the sa&e. ISS,+% Ahether or not the %ro%er aven$es o" assess&ent and co!!ection o" the said ta+ o,!i'ations -ere ta9en ,( the res%ondent 7IR. (Marcos #$estions the a$thorit( o" the 7IR to co!!ect ,( the s$&&ar( re&ed( o" !ev(in' $%on and sa!e o" rea! %ro%erties o" the decedent estate ta+ de"iciencies -itho$t the co'nition and a$thorit( o" the co$rt sittin' in %ro,ate over the s$%%osed -i!! o" the deceased.) -+./% BES. In the *hi!i%%ines the en"orce&ent and co!!ection o" estate ta+ is e+ec$tive in character as the !e'is!at$re ascri,ed this tas9 to the 7IR NIRC Sec. 8. *o-ers and d$ties o" the 7$rea$.=The %o-ers and d$ties o" the 7$rea$ o" Interna! Reven$e sha!! co&%rehend the assess&ent and co!!ection o" a!! nationa! interna! reven$e ta+es "ees and char'es and the en"orce&ent o" a!! "or"eit$res %ena!ties and "ines connected there-ith inc!$din' the e+ec$tion o" @$d'&ents in a!! cases decided in its "avor ,( the Co$rt o" Ta+ 2%%ea!s and the ordinar( co$rts. Said 7$rea$ sha!! a!so 'ive e""ect to and ad&inister the s$%ervisor( and %o!ice %o-er con"erred to it ,( this Code or other !a-s.5 The a%%rova! o" the %ro,ate co$rt or as a sett!e&ent tri,$na! over the deceased is not a &andator( re#$ire&ent in the co!!ection o" estate ta+es. There is nothin' in the Ta+ Code and in the %ertinent re&edia! !a-s that i&%!ies the necessit( o" the %ro,ate or estate sett!e&ent co$rt?s a%%rova! o" the state?s c!ai& "or estate ta+es ,e"ore the sa&e can ,e en"orced and co!!ected. On the contrar( $nder Section /7 o" the NIRC it is the %ro,ate or sett!e&ent co$rt -hich is ,idden not to a$thori:e the e+ec$tor or @$dicia! ad&inistrator o" the decedent?s estate to de!iver an( distri,$tive share to an( %art( interested in the estate $n!ess it is sho-n a Certi"ication ,( the Co&&issioner o" Interna! Reven$e that the estate ta+es have ,een %aid. 000$O1IC% ASS+SSM+)$ I" there is an( iss$e as to the va!idit( o" the 7IR?s decision to assess the estate ta+es this sho$!d have ,een %$rs$ed thro$'h the %ro%er ad&inistrative and @$dicia! aven$es %rovided "or ,( !a-. )IRC Sec. 223. 1rotestin of assessment.=Ahen the Co&&issioner o" Interna! Reven$e or his d$!( a$thori:ed re%resentative "inds that %ro%er ta+es sho$!d ,e assessed he sha!! "irst noti"( the ta+%a(er o" his "indin's. Aithin a %eriod to ,e %rescri,ed ,( i&%!e&entin' re'$!ations the ta+%a(er sha!! ,e re#$ired to res%ond to said notice. I" the ta+%a(er "ai!s to res%ond the Co&&issioner sha!! iss$e an assess&ent ,ased on his "indin's. S$ch assess&ent &a( ,e %rotested ad&inistrative!( ,( "i!in' a re#$est "or reconsideration or reinvesti'ation in s$ch "or& and &anner as &a( ,e %rescri,ed ,( i&%!e&entin' re'$!ations -ithin 84 da(s "ro& recei%t o" the assess&entC other-ise the assess&ent sha!! ,eco&e "ina! and $na%%ea!a,!e. I" the %rotest is denied in -ho!e or in %art the individ$a! association or cor%oration adverse!( a""ected ,( the decision on the %rotest &a( a%%ea! to the Co$rt o" Ta+ 2%%ea!s -ithin thirt( (84) da(s "ro& recei%t o" said decisionC other-ise the decision sha!! ,eco&e "ina! e+ec$tor( and de&anda,!e. (2s inserted ,( *.D. 1778)
Apart from failin to file the re4uired estate tax return within the time re4uired for the filin of the same, petitioner, and the other heirs never 4uestioned the assessments served upon them, allowin the same to lapse into finality, and promptin the "IR to collect the said taxes by levyin upon the properties left by 1resident Marcos. The Notices o" )ev( $%on rea! %ro%ert( -ere iss$ed -ithin the %rescri%tive %eriod and in accordance -ith the %rovisions o" the %resent Ta+ Code. The de"icienc( ta+ assess&ent havin' a!read( ,eco&e "ina! e+ec$tor( and de&anda,!e the sa&e can no- ,e co!!ected thro$'h the s$&&ar( re&ed( o" distraint or !ev( %$rs$ant to Section .4> o" the NIRC. The a%%!ica,!e %rovision in re'ard to the prescriptive period for the assessment and collection of tax deficiency% NIRC Sec. ..8. E+ce%tions as to a %eriod o" !i&itation o" assess&ent and co!!ection o" ta+es.= (a) In the case o" a "a!se or "ra$d$!ent ret$rn -ith intent to evade ta+ or o" a failure to file a return the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within ten (10) years after the discovery of the falsity, fraud, or omission: Provided That in a "ra$d assess&ent -hich has ,eco&e "ina! and e+ec$tor( the "act o" "ra$d sha!! ,e @$dicia!!( ta9en co'ni:ance o" in the civi! or cri&ina! action "or the co!!ection thereo". +++ (c) Any internal revenue tax which has been assessed within the period of limitation above prescribed, may be collected by distraint or levy or by a proceeding in court within three years following the assessment of the tax +++ The o&ission to "i!e an estate ta+ ret$rn and the s$,se#$ent "ai!$re to contest or a%%ea! the assess&ent &ade ,( the 7IR is "ata! to the %etitioner?s ca$se as $nder the a,ove=cited %rovision in case of failure to file a return, the tax may be assessed at any time within ten years after the omission, and any tax so assessed may be collected by levy upon real property within three years followin the assessment of the tax. Since the estate tax assessment had become final and unappealable by the petitioner!s default as re ards protestin the validity of the said assessment, there is now no reason why the "IR cannot continue with the collection of the said tax. 2n( o,@ection a'ainst the assess&ent sho$!d have ,een %$rs$ed "o!!o-in' the aven$e %aved in Section ..9 o" the NIRC on %rotests on assess&ents o" interna! reven$e ta+es. There -as s$""icient constr$ctive and<or act$a! notice o" assess&ents !ev( and sa!e sent to herein %etitioner Ferdinand 57on',on'5 Marcos as -e!! as to his &other Mrs. I&e!da Marcos. 2s -e!! as "or&a! assess&ent notices. Des%ite a!! o" these Notices %etitioner never !i"ted a "in'er to %rotest the assess&ents ($%on -hich the )ev( and sa!e o" %ro%erties -ere ,ased) nor a%%ea!ed the sa&e to the Co$rt o" Ta+ 2%%ea!s.There"ore it co$!d no !on'er ,e contested. /IS1OSI$I5+% *etition DENIED. C2 2FFIRMED.
.. The %ro,ate co$rt is not %rec!$ded "ro& den(in' a re#$est ,( the 'overn&ent "or the i&&ediate %a(&ent o" ta+es and sho$!d order the %a(&ent o" the sa&e on!( -ithin the %eriod "i+ed ,( the %ro,ate co$rt "or the %a(&ent o" a!! the de,ts o" the decedent. C!ai&s "or %a(&ent o" estate and inco&e ta+es d$e and assessed a"ter the death o" the decedent need not ,e %resented in the "or& o" a c!ai& a'ainst the estate.The %ro,ate co$rt is not the 'overn&ent a'enc( to decide -hether an estate is !ia,!e "or %a(&ent o" estate o" inco&e ta+es. "IR CO)$+)$IO)% 1. The state?s a$thorit( to co!!ect interna! reven$e ta+es is %ara&o$nt. Th$s the %endenc( o" %ro,ate %roceedin's over the estate o" the deceased does not %rec!$de the assess&ent and co!!ection thro$'h s$&&ar( re&edies o" estate ta+es over the sa&e. ISS,+% Ahether or not the %ro%er aven$es o" assess&ent and co!!ection o" the said ta+ o,!i'ations -ere ta9en ,( the res%ondent 7IR. (Marcos #$estions the a$thorit( o" the 7IR to co!!ect ,( the s$&&ar( re&ed( o" !ev(in' $%on and sa!e o" rea! %ro%erties o" the decedent estate ta+ de"iciencies -itho$t the co'nition and a$thorit( o" the co$rt sittin' in %ro,ate over the s$%%osed -i!! o" the deceased.) -+./% BES. In the *hi!i%%ines the en"orce&ent and co!!ection o" estate ta+ is e+ec$tive in character as the !e'is!at$re ascri,ed this tas9 to the 7IR NIRC Sec. 8. *o-ers and d$ties o" the 7$rea$.=The %o-ers and d$ties o" the 7$rea$ o" Interna! Reven$e sha!! co&%rehend the assess&ent and co!!ection o" a!! nationa! interna! reven$e ta+es "ees and char'es and the en"orce&ent o" a!! "or"eit$res %ena!ties and "ines connected there-ith inc!$din' the e+ec$tion o" @$d'&ents in a!! cases decided in its "avor ,( the Co$rt o" Ta+ 2%%ea!s and the ordinar( co$rts. Said 7$rea$ sha!! a!so 'ive e""ect to and ad&inister the s$%ervisor( and %o!ice %o-er con"erred to it ,( this Code or other !a-s.5 The a%%rova! o" the %ro,ate co$rt or as a sett!e&ent tri,$na! over the deceased is not a &andator( re#$ire&ent in the co!!ection o" estate ta+es. There is nothin' in the Ta+ Code and in the %ertinent re&edia! !a-s that i&%!ies the necessit( o" the %ro,ate or estate sett!e&ent co$rt?s a%%rova! o" the state?s c!ai& "or estate ta+es ,e"ore the sa&e can ,e en"orced and co!!ected. On the contrar( $nder Section /7 o" the NIRC it is the %ro,ate or sett!e&ent co$rt -hich is ,idden not to a$thori:e the e+ec$tor or @$dicia! ad&inistrator o" the decedent?s estate to de!iver an( distri,$tive share to an( %art( interested in the estate $n!ess it is sho-n a Certi"ication ,( the Co&&issioner o" Interna! Reven$e that the estate ta+es have ,een %aid. 000$O1IC% ASS+SSM+)$ I" there is an( iss$e as to the va!idit( o" the 7IR?s decision to assess the estate ta+es this sho$!d have ,een %$rs$ed thro$'h the %ro%er ad&inistrative and @$dicia! aven$es %rovided "or ,( !a-. )IRC Sec. 223. 1rotestin of assessment.=Ahen the Co&&issioner o" Interna! Reven$e or his d$!( a$thori:ed re%resentative "inds that %ro%er ta+es sho$!d ,e assessed he sha!! "irst noti"( the ta+%a(er o" his "indin's. Aithin a %eriod to ,e %rescri,ed ,( i&%!e&entin' re'$!ations the ta+%a(er sha!! ,e re#$ired to res%ond to said notice. I" the ta+%a(er "ai!s to res%ond the Co&&issioner sha!! iss$e an assess&ent ,ased on his "indin's. S$ch assess&ent &a( ,e %rotested ad&inistrative!( ,( "i!in' a re#$est "or reconsideration or reinvesti'ation in s$ch "or& and &anner as &a( ,e %rescri,ed ,( i&%!e&entin' re'$!ations -ithin 84 da(s "ro& recei%t o" the assess&entC other-ise the assess&ent sha!! ,eco&e "ina! and $na%%ea!a,!e. I" the %rotest is denied in -ho!e or in %art the individ$a! association or cor%oration adverse!( a""ected ,( the decision on the %rotest &a( a%%ea! to the Co$rt o" Ta+ 2%%ea!s -ithin thirt( (84) da(s "ro& recei%t o" said decisionC other-ise the decision sha!! ,eco&e "ina! e+ec$tor( and de&anda,!e. (2s inserted ,( *.D. 1778)
Apart from failin to file the re4uired estate tax return within the time re4uired for the filin of the same, petitioner, and the other heirs never 4uestioned the assessments served upon them, allowin the same to lapse into finality, and promptin the "IR to collect the said taxes by levyin upon the properties left by 1resident Marcos. The Notices o" )ev( $%on rea! %ro%ert( -ere iss$ed -ithin the %rescri%tive %eriod and in accordance -ith the %rovisions o" the %resent Ta+ Code. The de"icienc( ta+ assess&ent havin' a!read( ,eco&e "ina! e+ec$tor( and de&anda,!e the sa&e can no- ,e co!!ected thro$'h the s$&&ar( re&ed( o" distraint or !ev( %$rs$ant to Section .4> o" the NIRC. The a%%!ica,!e %rovision in re'ard to the prescriptive period for the assessment and collection of tax deficiency% NIRC Sec. ..8. E+ce%tions as to a %eriod o" !i&itation o" assess&ent and co!!ection o" ta+es.= (a) In the case o" a "a!se or "ra$d$!ent ret$rn -ith intent to evade ta+ or o" a failure to file a return the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within ten (10) years after the discovery of the falsity, fraud, or omission: Provided That in a "ra$d assess&ent -hich has ,eco&e "ina! and e+ec$tor( the "act o" "ra$d sha!! ,e @$dicia!!( ta9en co'ni:ance o" in the civi! or cri&ina! action "or the co!!ection thereo". +++ (c) Any internal revenue tax which has been assessed within the period of limitation above prescribed, may be collected by distraint or levy or by a proceeding in court within three years following the assessment of the tax +++ The o&ission to "i!e an estate ta+ ret$rn and the s$,se#$ent "ai!$re to contest or a%%ea! the assess&ent &ade ,( the 7IR is "ata! to the %etitioner?s ca$se as $nder the a,ove=cited %rovision in case of failure to file a return, the tax may be assessed at any time within ten years after the omission, and any tax so assessed may be collected by levy upon real property within three years followin the assessment of the tax. Since the estate tax assessment had become final and unappealable by the petitioner!s default as re ards protestin the validity of the said assessment, there is now no reason why the "IR cannot continue with the collection of the said tax. 2n( o,@ection a'ainst the assess&ent sho$!d have ,een %$rs$ed "o!!o-in' the aven$e %aved in Section ..9 o" the NIRC on %rotests on assess&ents o" interna! reven$e ta+es. There -as s$""icient constr$ctive and<or act$a! notice o" assess&ents !ev( and sa!e sent to herein %etitioner Ferdinand 57on',on'5 Marcos as -e!! as to his &other Mrs. I&e!da Marcos. 2s -e!! as "or&a! assess&ent notices. Des%ite a!! o" these Notices %etitioner never !i"ted a "in'er to %rotest the assess&ents ($%on -hich the )ev( and sa!e o" %ro%erties -ere ,ased) nor a%%ea!ed the sa&e to the Co$rt o" Ta+ 2%%ea!s.There"ore it co$!d no !on'er ,e contested. /IS1OSI$I5+% *etition DENIED. C2 2FFIRMED.
