Marcos II vs. CA Digest

Facts

After the former President Marcos died, a Special Tax Audit Team conducted investigations of the tax obligaitons of the late president. They found out that the Marcoses failed to file a estate tax returns in violation of the NIRC. BIR and CIR then filed criminal charges and caused the filing of Estate Tax Return (P23.293 Billion) , ITRs (P149k for Ferdinand and P184M for Imelda); issued and served deficiency estate tax assessments; formal assessment notices (FAN); notice to conference; notice of levy and notices of sale at public auction.

RTC and CA ruled that the deficiency assessment (DS) have already become final and unappealable, and this may be enforced by summary remedy of levy. 

The heir Bongbong filed for Petition for Certiorari and Prohibition under Rule 65.

Issue

Are the assessments of the BIR proper?

Ruling

Yes.

1. Probate of the will is not mandatory for tax assessments and levies.
2. The levy notices and assessments were proper and adequate. They followed the NIRC.
   1. Receipt. Received by persons of sufficient age in the office of Imelda Marcos in Congress.
   2. Proper assessor. Not the DOJ Secretary but that of the BIR are presumed correct.
   3. Proper recipient. The delinquent taxpayer is the estate, not the heir. Notice to the heir is not required by law.
   4. Proper time. Within the prescriptive period (10 years after the discovery of false or fraudulent return Sec. 222 of NIRC).
   5. No proper protest. Furnished to Marcos Jr’s counsel but the counsel never protested.
   6. No proper appeal because certiorari filed by Marcos Jr. is not a substitute to a lost appeal or remedy.

Therefore, the objections of Marcos Jr. were improperly raised.

Court’s answers to Marcos’ argument:

Probate of the will is not mandatory for the estate. The probate court may even authorize to inhibit the distribution of the shares if estate tax is not paid.

Marcos Argument #1: Summary tax remedies (TR) such as levy are affected by the pendency of special proceedings such as probate of an alleged will;

Court: 

1. Probate is not mandatory for estate. 
2. Probate is even authorized to restrain E/A to deliver distributive share if the estate tax is not paid.
3. Marcos neither filed return nor questioned the assessments. They lapsed into finality.

Levy notices followed NIRC rules, BIR assessments are valid, objections were improperly raised, and notices adequately served to the estate.

Marcos Argument #2: “I was denied of due process.”  (If DAs have already become final and unappealable, merits and lawfulness of the manner and method are questionable).

Court: 

1. Notices of Levy were issued within the prescriptive period as per Art. 205 and Article 222 of NIRC (within 10 years after the discovery of falsity or fraud; proper assessment done within 3 years);
2. Failed to allege whether or not the properties levied by BIR were among the cases pending before the Sandiganbayan;
3. The determinations of the DOJ are not the basis of estate. BIR’s assessments are presumed correct;
4. Objections should have been properly raised before BIR/CTA;
5. Certiorari may not be used to substitute for lost appeal or remedy;
6. On “insufficient notices” by Marcos
   1. Notice of assessments were received by person of sufficient age and reason;
   2. FAN served at his office, furnished to counsel but never protested nor appealed;
   3. The delinquent taxpayer is the Estate & notice to heir not required by law;

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