ii. Remedies from CIR’s Denial or Failure to Act

Two things can happen after a valid protest

Once the taxpayer files a valid protest against the Final Assessment Notice, the CIR or the CIR’s duly authorized representative will either decide it or not act on it within the period the law allows.¹ Each path has its own remedy, and the 30-day period to go to the Court of Tax Appeals (CTA) runs from a different starting point.

The 180-day period for the BIR to act is counted differently for the two kinds of protest:²

• Request for reconsideration: from the date the protest is filed.
• Request for reinvestigation: from the date the taxpayer submits the supporting documents, which must be within 60 days from filing the protest.

When the protest is denied

A denial may come from the CIR or from a duly authorized representative. If the representative denies it, the taxpayer may either:

• appeal to the CTA within 30 days from receipt of the decision; or
• elevate the protest to the CIR by a request for reconsideration within 30 days from receipt. If the CIR also denies it, the taxpayer appeals to the CTA within 30 days from receipt of the CIR’s decision.

On an appeal to the CIR, no request for reinvestigation is allowed, and only issues raised in the representative’s decision are taken up. If the CIR decides the protest directly, the only remedy is an appeal to the CTA within 30 days from receipt.

When the protest is not acted upon within 180 days

The CIR’s inaction is itself appealable, because RA 9282 made inaction on a disputed assessment a deemed denial. The taxpayer has two options, set out in Rizal Commercial Banking Corporation v. CIR, G.R. No. 168498, 24 April 2007:

• appeal to the CTA within 30 days after the 180-day period lapses; or
• wait for the final decision and appeal within 30 days from receiving it.

In Lascona Land Co., Inc. v. CIR, G.R. No. 171251, 5 March 2012, the Court held that these options are mutually exclusive: resort to one bars the other. The assessment does not become final just because the taxpayer did not appeal after the 180 days. A regulation that says otherwise cannot prevail over Sec. 228. The CTA’s own rules follow the second option.

A void decision counts as inaction

A Final Decision on Disputed Assessment (FDDA) must state the facts and the law, rules and regulations, or jurisprudence it is based on. If it does not, it is void and treated as if no decision was issued. What the taxpayer appeals to the CTA is then the inaction, not the FDDA. CIR v. Liquigaz Philippines Corporation, G.R. Nos. 215534 & 215557, 18 April 2016.

What counts as the final decision

The CIR must say clearly when an action is the final decision on the disputed assessment. Surigao Electric Co., Inc. v. CTA, G.R. No. L-25289, 28 June 1974. The rule exists so the taxpayer is not misled about when the period to appeal begins. Letters that deny a reconsideration, modify the assessment after reinvestigation, or demand payment of the assessed tax have been treated as final decisions. Oceanic Wireless Network, Inc. v. CIR, G.R. No. 148380, 9 December 2005.

Older rulings treated a warrant of distraint and levy as a constructive denial of the protest. Use that rule with care. In Light Rail Transit Authority v. BIR, G.R. No. 231238, 20 June 2022, the Court held that a Final Notice Before Seizure is not the final decision, since RA 9282 now makes inaction itself appealable. In Mannasoft Technology Corporation v. CIR, G.R. No. 244202, 10 July 2023, the taxpayer had chosen to await the decision on its reinvestigation. The warrant issued in the meantime did not start the 30-day period. The later letter denying the reinvestigation was the final decision appealable to the CTA.

Examples of Indirect Denial

• Civil collection instituted during pendency of protest (CIR v. UNION SHIPPING CORPORATION and THE COURT OF TAX APPEALS, G.R. No. L-66160, 21 May 1990¹⁴; Yabes v. Flojo, G.R. No. L-46954, 20 July 1982¹⁵)
• Issuance of warrant of distraint and levy to enforce collection was treated in an older ruling as an indirect denial (CIR v. Int’l Pharmaceuticals, CTA E.B. No. 608¹⁶). Its issuance does not invariably start the 30-day appeal period: where the taxpayer elects to await a final decision on the protest, the taxpayer may appeal the later final denial within 30 days of receipt.
• Referral by the CIR of request for reinvestigation to Solicitor General (Republic v. LIM TIAN TENG SONS and CO., INC., G.R. No. L-21731, 31 March 1966¹⁷)
• Final demand for payment of delinquent taxes

This Court has considered the following communications sent by the CIR or his duly authorized representative to taxpayers as embodying rulings appealable to the CTA:

• A letter which stated the result of the reinvestigation requested by the taxpayer and the consequent modification of the assessment;
• A letter which denied the request of the taxpayer for the reconsideration, cancellation, or withdrawal of the original assessment;
• A letter which contained a demand on the taxpayer for the payment of the revised or reduced assessment; and
• A letter which notified the taxpayer of a revision of previous assessments

The CIR should ALWAYS indicate to the taxpayer in clear and unequivocal language whenever his action on an assessment questioned by a TP constitutes his final determination on the disputed assessment. (Surigao Electric Co., Inc. v. CTA, G.R. No. L-25289, 28 June 1974¹⁸)

Inaction by the CIR or Duly Authorized Representatives

Void FDDA constitutes inaction: If the FDDA itself does not conform to the requirements. It is as if no decision was rendered. The effect therefore is that what is appealable to the CTA is the inaction of the CIR or the duly authorized representative. (CIR v. Liquigaz Philippines Corporation, G.R. No. 215557, 2016)

Protest for Reinvestigation

If the protest is denied in whole or in part, or is not acted upon within one hundred and eighty (180) days from submission of supporting documents, the taxpayer adversely affected by the decision or inaction may appeal to the CTA within thirty (30) days from receipt of the said decision, or from the lapse of one hundred eighty (180)- day period; if the protest is not acted upon within that period, the taxpayer may instead await the final decision and appeal within thirty (30) days from receipt thereof. Failure to appeal within thirty (30) days from the lapse of the one hundred eighty (180)- day period does not, by itself, make the assessment final, executory and demandable. (NIRC, Sec. 228)¹⁹

Indirect Denial: (without FDDA)

Taxpayer’s Remedies from BIR’s Denial on Protest to FAN (FDDA):

Denial by FDDA Issued by CIR’s Authorized Representative

• Judicial appeal to CTA within 30 days from receipt of FDDA; or
• Administrative appeal to CIR within 30 days from receipt of the FDDA through request for reconsideration;
• If the protest or request for reconsideration is still denied by the CIR, appeal to the CTA within 30 days from date of receipt of said decision.

Note: A timely administrative appeal from the authorized representative’s decision to the CIR tolls the period for judicial appeal. A motion for reconsideration of the CIR’s final decision does not toll the 30-day period to appeal to the CTA.

Note: No request for reinvestigation shall be allowed in administrative appeal, and only issues raised in the decision of the CIR’s duly authorized representative shall be entertained by the CIR (R.R. No. 12-99, as amended)²⁰ The administrative appeal filed with the CIR will toll the 30- day period to the CTA.

Inaction by CIR or Duly Authorized Representative

• Appeal to the CTA within 30 days from lapse of 180- day period; or
• Await the decision of the CIR’s authorized representative, in which case the taxpayer may appeal to the CTA within 30 days from receipt of the BIR’s decision or elevate the protest through motion for reconsideration to the CIR within 30 days from receipt of the BIR’s decision (i.e., administrative appeal)

Note: In case of inaction on protested FAN, the option of the taxpayer to either file a petition in the CTA or await the decision of the CIR’s authorized representative or of the CIR are mutually exclusive. Resort to one bars the application of the other. (Lascona Land Co., Inc. v. CIR, G.R. No. 171251, 5 March 2012)²¹

CTA Jurisdiction Covers CIR Inaction

The jurisdiction of the CTA has been expanded to include not only decisions or rulings but also inaction as well of the CIR. (RCBC v. CIR, G.R. No. 168498)²²

The inaction by the CIR within the 180-day period under Sec. 228 of the NIRC²³ is deemed a denial for purpose of allowing the taxpayer to appeal with the CTA but it does not necessarily constitute the CIR’s formal decision (Revised Rules of the Court of Tax Appeals “RRCTA”, Sec. 3[a][2], Rule 4)²⁴

In case the CIR fails to act on the disputed assessment within 180 days from filing a request for reconsideration, or from submission of supporting documents for a request for reinvestigation, a taxpayer can either:

• File a petition for review with the CTA within 30 days after the expiration of the 180-day period, or
• Await the final decision of the Commissioner on the disputed assessments and appeal such final decision to the CTA within 30 days after receipt of a copy of such decision.

However: These options are mutually exclusive, and resort to one bars the application of the other.

CTA Jurisdiction Covers CIR Inaction

The jurisdiction of the CTA has been expanded to include not only decisions or rulings but also inaction as well of the CIR. (RCBC v. CIR, G.R. No. 168498)²⁵

The inaction by the CIR within the 180-day period under Sec. 228 of the NIRC²⁶ is deemed a denial for purpose of allowing the taxpayer to appeal with the CTA but it does not necessarily constitute the CIR’s formal decision (Revised Rules of the Court of Tax Appeals “RRCTA”, Sec. 3[a][2], Rule 4²⁷)

In case the CIR fails to act on the disputed assessment within 180 days from filing a request for reconsideration, or from submission of supporting documents for a request for reinvestigation, a taxpayer can either:

• File a petition for review with the CTA within 30 days after the expiration of the 180-day period, or
• Await the final decision of the Commissioner on the disputed assessments and appeal such final decision to the CTA within 30 days after receipt of a copy of such decision.

However: These options are mutually exclusive, and resort to one bars the application of the other.