CIR v Dominador Menguito; G.R. No. 167560; 17 Sep 2008

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Through a letter dated 28 July 1997, respondent and his spouse were informed by the BIR that they have undeclared income from Texas Instruments and Club John Hay. This was followed by a Preliminary Ten-Day Letter dated 11 August 1997, informing respondent that in the investigation of his 1991, 1992 and 1993 income, business and withholding tax case, he was found liable for deficiency income and percentage tax.

The CTA’s decision sustaining the validity of the assessment was reversed by the CA, ruling that petitioner failed to sufficiently prove that respondent had in fact received the pre-assessment and post-reporting assessments required by law, it cannot be assumed that respondent had been served said notices.

Whether or not the law requires the CIR to prove by competent evidence that it issued and mailed a post-reporting notice and a pre-assessment notice to a taxpayer who denied receipt of the same.

NO. A post-reporting notice and pre-assessment notice do not bear the gravity of a formal assessment notice. The post-reporting notice and pre-assessment notice merely hint at the inital findings of the BIR against a taxpayer and invites the latter to an “informal” conference or clarificatory meeting. Neither notice contains a declaration of the tax liability of the taxpayer or a demand for payment thereof. Hence, the lack of such notices inflicts no prejudice on the taxpayer for as long as the latter is properly served a formal assessment notice. In the case of respondent, a formal assessment notice was received by him as acknowledged in his Petition for Review and Joint Stipulation; and, on the basis thereof, he filed a protest with the BIR-Baguio City and eventually a petition with the CTA.

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