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The tax amnesty solution

October 04, 2019

JOEL L. TAN-TORRE

LAST OF TWO PARTS

THOSE availing of the amnesty on estate tax must complete the payment of the Tax Amnesty (TA) tax and submit all documentary requirements on or before June 15, 2021. For those availing of this amnesty, this just provides a limited time of two years from the date of effectivity of the revenue regulations to comply with the provisions on the Tax Amnesty Act (Republic Act 11213). The guidelines issued by the Bureau of Internal Revenue (BIR) provide the estate tax amnesty return (ETAR), the acceptance payment form (APF), and certificate of availment (CA) that will be used by taxpayers availing of the amnesty.

The TAR and the APF can be accomplished without too much difficulty. What are very useful are the information in the guidelines of the ETAR and in Revenue Regulations (RR) 6-2019 which provides for the allowable deductions in the eight laws since 1936 that taxpayers may consider in computing their TA estate tax. The TA law, with the veto of President Duterte of certain contentious provisions of the enrolled bill submitted by Congress to Malacañang, provides that the availment should be made for each stage of transfer of properties of multiple estates. Thus, for situations where there are several decedents covering various generations, the TA process should be made for each estate for the common properties.

Once the TAR and APF are accomplished, these are to be submitted to the BIR office concerned. The BIR will review and endorse these back to the taxpayer, with the APF bearing the signature of the authorized BIR officer.

The taxpayer shall pay the amnesty tax to the authorized accredited agent bank or revenue collection office by merely presenting the APF. There is no need to present the TAR or any supporting document to the bank or revenue collection office. Instead, all of the documents, including the ETAR, bank-validated APF and supporting documents should be filed in triplicate with the BIR office after the payment. The taxpayer will be given the received copy of all of these documents,

The CA and the electronic certificate authorizing registration (eCARs) will be issued within 15 calendar days from the receipt of validated APF and proof of payment.

The eCARs are to be presented to the Register of Deeds, Corporate Secretary or any other person mandated to register asset ownership transfer matters, to start the process of the transfer of ownership to the rightful heirs. After all of these steps and processes, people ask me if this finally is the resolution of the long pending estate tax issues. My answer: “Perhaps.”

TA personalized-oriented services

Let us go back to the question: To avail or not to avail of the tax amnesties covered by RA 11313? This question must be addressed by taxpayers who are now given this rare opportunity to resolve their long pending tax woes with the BIR. Taxpayers must decide and act soon. The period to avail of TA on delinquent accounts ends on April 23, 2020, while the availment for the estate tax TA ends on June 15, 2021.

Is the TA solution automatically appropriate for your long pending tax problems on unsettled delinquent accounts of companies or estate taxes and obligations of family members who died years ago? I advise taxpayers to carefully evaluate if the TA is best for them. Each tax problem that may be covered by the TA is unique and has distinct issues and complications. There are other remedies available that may perhaps provide a better resolution for some tax problems. The process for availing of the TA requires several steps and multiple documentations. For these reasons, it is appropriate that a careful deliberation be made before proceeding with the decision to go ahead with availing of the tax amnesty.

In the course of holding several seminars and consultations on the TA, I continue to come across questions from taxpayers that are not fully addressed by the current implementing rules of the TA. If these issues are not properly addressed and resolved, those who hastily plunge and avail of the tax amnesties may not derive the outcomes that they expect for their tax problems. Therefore, I suggest that a careful approach be pursued for those contemplating the TA options. I follow a Tax Amnesty Personalized Oriented Service (Tapos) approach to taxpayers who consult me about their unresolved tax problems.

My Tapos methodology focuses on a personalized and customized approach that recognizes that each and every tax problem involves unique and distinctive issues and resolutions. The Tapos provides a holistic and practical solution to each tax situation resulting in the favorable outcomes expected by the people who consult me.

For those interested in knowing more about Tapos, I follow a step-by- step process in providing this solution.

First step: Pre-amnesty availment discussion — I conduct a face-to-face meeting with the client to give an orientation on the key features of the TA; gather information on the background and circumstances of your particular tax case or cases; validate your expectations and concerns; present to you the checklist of requirements and processes; and agree on the Tapos timeline.

Second step: Assistance in completion of all mandatory TA requirements and identified supplemental activities — We will hand in hand proceed with the compliance with the rules and regulations of the TARs. These include accomplishment of the TAR, securing all documentary and procedural requirements, liaising with the concerned government offices (BIR, Department of Justice, Revenue District and local government unit), and the completion of the TA availment.

Third step: On-call consultation and update services in the course of the engagement — I shall be on standby to address your concerns and queries in the course of Tapos. You will be provided with regular updates on the progress of the processing of the various documents and outcomes. In the event that there are new guidelines or updates issued by the BIR or the other government offices that may be relevant to the Tapos, you will immediately be informed about these and how these may affect your particular situation.

Fourth step: Delivery of all tax amnesty benefits and other supplemental outcomes — With our joint and close effort and collaboration, you can expect an expeditious and satisfactory resolution of your long outstanding tax woes and problems. At the conclusion of Tapos, you will attain your expectation that you have a clean slate in the BIR with the cancellation of your previous record of unpaid tax arrears, or for your estate tax problems, you will have the final settlement of the estate requirements with the properties in the estate distributed to and ownership of the properties already in the names of the designated heirs.

Fifth step: Post-amnesty evaluation and debriefing — At the conclusion of Tapos, you will be briefed on the relevant milestones that arose and you will have the opportunity to give feedback on your level of satisfaction on the services that I rendered.

Sixth step: High-level diagnostic for enhanced tax compliance and planning on a moving forward basis — I will also present to you my high- level assessment of what you or your business organization can consider to improve tax compliance, pinpoint tax planning opportunities, and minimize tax risks in your future and prospective transactions.

After you and/or your company successfully availed of the tax amnesty and Tapos, the prospect of a better tax environment awaits you.

With or without tax amnesties, I just hope that our taxpayers and our tax-collecting agencies will all do their share in building and maintaining a tax community that we can all be proud to be part of our national culture.

Joel L. Tan-Torre is a Certified Public Accountant who placed No. 1 in the May 1979 CPA board examinations. He was the BIR Commissioner from 2009 to 2010 and chairman of the Professional Regulatory Board of Accountancy from 2014 to August 2018. He is a partner of Reyes Tacandong & Co. He completed his International Tax Program at the Harvard Law School in 1988.

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