The document discusses a tax case involving the estate of former Philippine President Ferdinand Marcos. It summarizes that:
1) The Bureau of Internal Revenue conducted an audit and issued tax assessments for estate and income taxes owed by Marcos, his wife Imelda, and their son Ferdinand "Bongbong" Marcos II.
2) Notices of the tax assessments and levies on real property were served on the Marcoses and their legal counsel.
3) Ferdinand Marcos II challenged the tax collection in court, arguing it should be suspended due to ongoing probate proceedings for Marcos' estate. However, the court affirmed the BIR's actions, finding the tax
The document discusses a tax case involving the estate of former Philippine President Ferdinand Marcos. It summarizes that:
1) The Bureau of Internal Revenue conducted an audit and issued tax assessments for estate and income taxes owed by Marcos, his wife Imelda, and their son Ferdinand "Bongbong" Marcos II.
2) Notices of the tax assessments and levies on real property were served on the Marcoses and their legal counsel.
3) Ferdinand Marcos II challenged the tax collection in court, arguing it should be suspended due to ongoing probate proceedings for Marcos' estate. However, the court affirmed the BIR's actions, finding the tax
The document discusses a tax case involving the estate of former Philippine President Ferdinand Marcos. It summarizes that:
1) The Bureau of Internal Revenue conducted an audit and issued tax assessments for estate and income taxes owed by Marcos, his wife Imelda, and their son Ferdinand "Bongbong" Marcos II.
2) Notices of the tax assessments and levies on real property were served on the Marcoses and their legal counsel.
3) Ferdinand Marcos II challenged the tax collection in court, arguing it should be suspended due to ongoing probate proceedings for Marcos' estate. However, the court affirmed the BIR's actions, finding the tax
C2021 Thereafter, Formal Assessment notices were served on October 20,
1992, upon Mrs. Marcos c/o petitioner, at his office, House of
FERDINAND R. MARCOS II, petitioner, Representatives, Batasan Pambansa, Quezon City. Moreover, a vs. notice to Taxpayer inviting Mrs. Marcos (or her duly authorized COURT OF APPEALS, THE COMMISSIONER OF THE BUREAU OF representative or counsel), to a conference, was furnished the INTERNAL REVENUE and HERMINIA D. DE GUZMAN, respondents. counsel of Mrs. Marcos, Dean Antonio Coronel — but to no avail. G.R. No. 120880 The deficiency tax assessments were not protested administratively, Ponente: TORRES, JR., J. by Mrs. Marcos and the other heirs of the late president, within 30 June 5, 1997 days from service of said assessments. BIR Commissioner issued multiple (a total of 32) notices of levy on FACTS real property against certain parcels of land owned by the On September 29, 1989, former President Ferdinand Marcos died in Marcoses Honolulu, Hawaii, USA. In response to a letter dated March 12, 1993 sent by Atty. Loreto Ata On June 27, 1990, a Special Tax Audit Team was created to conduct (counsel of herein petitioner) calling the attention of the BIR and investigations and examinations of the tax liabilities and obligations requesting that they be duly notified of any action taken by the BIR of the late president, as well as that of his family, associates and affecting the interest of their client Ferdinand "Bongbong" Marcos II, "cronies". as well as the interest of the late president — copies of the aforesaid o The investigation disclosed that the Marcoses failed to file a notices were, served on April 7, 1993 and on June 10, 1993, upon written notice of the death of the decedent, an estate tax Mrs. Imelda Marcos, the petitioner, and their counsel of record, "De returns, as well as several income tax returns covering the Borja, Medialdea, Ata, Bello, Guevarra and Serapio Law Office". years 1982 to 1986, — all in violation of the National Internal Notices of sale at public auction were posted on May 26, 1993, at Revenue Code (NIRC). the lobby of the City Hall of Tacloban City. The public auction for On July 26, 1991, the BIR issued the following: the sale of the eleven (11) parcels of land took place on July 5, o (1) Deficiency estate tax assessment against the estate of 1993. There being no bidder, the lots were declared forfeited in the late president Ferdinand Marcos in the amount of favor of the government. P23,293,607,638.00 Pesos); Ferdinand R. Marcos II questions the actuations of the o (2) Deficiency income tax assessment (against the Spouses respondent Commissioner of Internal Revenue in assessing, Ferdinand and Imelda Marcos in the amounts of and collecting through the summary remedy of Levy on Real P149,551.70 and P184,009,737.40 representing deficiency Properties, estate and income tax delinquencies upon the estate income tax for the years 1985 and 1986); and properties of his father, despite the pendency of the o (3) Deficiency income tax assessment (against petitioner proceedings on probate of the will of the late president, which is Ferdinand "Bongbong" Marcos II in the amounts of P258.70 docketed as Sp. Proc. No. 10279 in the Regional Trial Court of Pasig pesos; P9,386.40 Pesos; P4,388.30 Pesos; and P6,376.60 Petitioner had filed with the respondent Court of Appeals a Petition Pesos representing his deficiency income taxes for the years for Certiorari and Prohibition with an application for writ of 1982 to 1985). preliminary injunction and/or temporary restraining order on The Commissioner of Internal Revenue avers that copies of the June 28, 1993, seeking to — deficiency estate and income tax assessments were all personally o I. Annul and set aside the Notices of Levy on real property and constructively upon Mrs. Imelda Marcos (through her caretaker dated February 22, 1993 and May 20, 1993, issued by Mr. Martinez) at her last known address at No. 204 Ortega St., San respondent Commissioner of Internal Revenue; Juan, M.M. o II. Annul and set aside the Notices of Sale dated May 26, Likewise, copies of the deficiency tax assessments issued against 1993; petitioner Ferdinand "Bongbong" Marcos II were also personally and o III. Enjoin the Head Revenue Executive Assistant Director II constructively served upon him (through his caretaker) on September (Collection Service), from proceeding with the Auction of the 12, 1991, at his last known address at Don Mariano Marcos St. real properties covered by Notices of Sale. corner P. Guevarra St., San Juan, M.M. Court of Appeals rendered its Decision on November 29, 1994, ruling that the deficiency assessments for estate and income tax made upon the petitioner and the estate of the deceased President According to the respondent, claims for payment of estate and Marcos have already become final and unappealable income taxes due and assessed after the death of the decedent need not be presented in the form of a claim against the estate. These can and should be paid immediately. The probate court is not ISSUE/S the government agency to decide whether an estate is liable for Whether or not the proper avenues of assessment and collection of the said payment of estate of income taxes. Well-settled is the rule that the tax obligations were taken by the respondent Bureau? Yes. probate court is a court with special and limited jurisdiction. Concededly, the authority of the Regional Trial Court, sitting, albeit RULING: with limited jurisdiction, as a probate court over estate of deceased IN VIEW WHEREOF, the Court RESOLVED to DENY the present petition. individual, is not a trifling thing. The court's jurisdiction, once The Decision of the Court of Appeals dated November 29, 1994 is hereby invoked, and made effective, cannot be treated with indifference AFFIRMED in all respects. nor should it be ignored with impunity by the very parties invoking its authority. RATIO: The jurisdiction of the probate court to approve the sale of properties It has been repeatedly observed, and not without merit, that the of a deceased person by his prospective heirs before final enforcement of tax laws and the collection of taxes, is of paramount adjudication; to determine who are the heirs of the decedent; the importance for the sustenance of government. Taxes are the recognition of a natural child; the status of a woman claiming to be lifeblood of the government and should be collected without the legal wife of the decedent; the legality of disinheritance of an unnecessary hindrance. However, such collection should be made in heir by the testator; and to pass upon the validity of a waiver of accordance with law as any arbitrariness will negate the very reason hereditary rights. for government itself. It is therefore necessary to reconcile the The nature of the process of estate tax collection has been described apparently conflicting interests of the authorities and the taxpayers as follows: so that the real purpose of taxation, which is the promotion of the o Strictly speaking, the assessment of an inheritance tax common good, may be achieved. does not directly involve the administration of a Petitioner posits that notices of levy, notices of sale, and subsequent decedent's estate, although it may be viewed as an incident sale of properties of the late President Marcos effected by the BIR to the complete settlement of an estate, and, under some are null and void for disregarding the established procedure for the statutes, it is made the duty of the probate court to make the enforcement of taxes due upon the estate of the deceased. The case amount of the inheritance tax a part of the final decree of of Domingo vs. Garlitos is specifically cited to bolster the argument distribution of the estate. It is not against the property of that "the ordinary procedure by which to settle claims of decedent, nor is it a claim against the estate as such, indebtedness against the estate of a deceased, person, as in an but it is against the interest or property right which the inheritance (estate) tax, is for the claimant to present a claim before heir, legatee, devisee, etc., has in the property formerly the probate court so that said court may order the administrator to held by decedent. pay the amount therefor." This remedy is allegedly, exclusive, and o Further, under some statutes, it has been held that it is not a cannot be effected through any other means. suit or controversy between the parties, nor is it an adversary Petitioner goes further, submitting that the probate court is not proceeding between the state and the person who owes the precluded from denying a request by the government for the tax on the inheritance. However, under other statutes it has immediate payment of taxes, and should order the payment of the been held that the hearing and determination of the cash same only within the period fixed by the probate court for the value of the assets and the determination of the tax are payment of all the debts of the decedent. adversary proceedings. The proceeding has been held to be On the other hand, it is argued by the BIR, that the state's authority necessarily a proceeding in rem. to collect internal revenue taxes is paramount. Thus, the pendency of In the Philippine experience, the enforcement and collection of probate proceedings over the estate of the deceased does not estate tax, is executive in character, as the legislature has seen it preclude the assessment and collection, through summary remedies, fit to ascribe this task to the Bureau of Internal Revenue. Section 3 of of estate taxes over the same. the National Internal Revenue Code attests to this: o Sec. 3. Powers and duties of the Bureau. — The powers and o There is nothing in the Tax Code, and in the pertinent duties of the Bureau of Internal Revenue shall comprehend remedial laws that implies the necessity of the probate the assessment and collection of all national internal revenue or estate settlement court's approval of the state's claim taxes, fees, and charges, and the enforcement of all for estate taxes, before the same can be enforced and forfeitures, penalties, and fines connected therewith, collected. including the execution of judgments in all cases decided in On the contrary, under Section 87 of the NIRC, it is the probate or its favor by the Court of Tax Appeals and the ordinary courts. settlement court which is bidden not to authorize the executor or Said Bureau shall also give effect to and administer the judicial administrator of the decedent's estate to deliver any supervisory and police power conferred to it by this Code or distributive share to any party interested in the estate, unless it is other laws. shown a Certification by the Commissioner of Internal Revenue that It was in Vera vs. Fernandez that the court recognized the liberal the estate taxes have been paid. This provision disproves the treatment of claims for taxes charged against the estate of the petitioner's contention that it is the probate court which approves the decedent. Such taxes, we said, were exempted from the application assessment and collection of the estate tax. of the statute of non-claims, and this is justified by the necessity of (The rest of the case is a determination of propriety of the taxes. government funding, immortalized in the maxim that taxes are the Long story short, the assessment is already final and executory.) lifeblood of the government. Vectigalia nervi sunt rei publicae — taxes are the sinews of the state. Such liberal treatment of internal revenue taxes in the probate proceedings extends so far, even to allowing the enforcement of tax obligations against the heirs of the decedent, even after distribution of the estate's properties. o Claims for taxes, whether assessed before or after the death of the deceased, can be collected from the heirs even after the distribution of the properties of the decedent. They are exempted from the application of the statute of non-claims. The heirs shall be liable therefor, in proportion to their share in the inheritance. o Thus, the Government has two ways of collecting the taxes in question. One, by going after all the heirs and collecting from each one of them the amount of the tax proportionate to the inheritance received. Another remedy, pursuant to the lien created by Section 315 of the Tax Code upon all property and rights to property belong to the taxpayer for unpaid income tax, is by subjecting said property of the estate which is in the hands of an heir or transferee to the payment of the tax due the estate. (Commissioner of Internal Revenue vs. Pineda, 21 SCRA 105, September 15, 1967.) From the foregoing, it is discernible that the approval of the court, sitting in probate, or as a settlement tribunal over the deceased is not a mandatory requirement in the collection of estate taxes. o It cannot therefore be argued that the Tax Bureau erred in proceeding with the levying and sale of the properties allegedly owned by the late President, on the ground that it was required to seek first the probate court's sanction.
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