Digest of the case for Salunga vs. CIR (Labor Law)
Full description
fgertgyegh
tax
Case DigestFull description
Partnership Case Digest
Full description
Full description
consti law I
Full description
Tax DigestFull description
Full description
case digest
Ferrer Vs. CIRFull description
case
Full description
Case Digest
Full description
taxation law case
digest
THE COLLECTOR OF INTERNAL REVENUE vs. ELLEN WOOD McGRATH x------------------------x---------------------------------------------------------------------------------x ------x ELLEN WOOD McGRATH vs. McGRATH vs. CIR and CTA Nature: Appeal Nature: Appeal by (1) CIR (1) CIR from a decision of CTA declaring the estate of Dora Anna Wood exempt from the payment of inheritance tax and by (2) Ellen (2) Ellen c!rath" administratrix" for the dismissal of her claim of having been discharged from paying the taxes assessed by CIR on the estate. FACT: #. CIR assessed assessed against against the the estate estate of Dora Anna Anna Wood taxes" taxes" interest interests s and s$rcharge s$rcharges s amo$nting amo$nting to %&'"(#).*&. +. !CIR: c!rath" !CIR: c!rath" administratrix" administratrix" filed a petition against the original assessment made by the CIR. a. CIR rendered rendered a final final decision decision re,$esti re,$esting ng c!rath c!rath to pay %*"#&&. %*"#&&.'# '# as inheritanc inheritance e tax and penalties" pl$s corresponding interest $p to the date of payment. . !CTA: c!rath !CTA: c!rath filed a petition for revie alleging that CIR/s assessment of the taxes on the estate of Dora Anna Wood are e"ce##$%e and $&&e'a& a. 0he pray prays s for the the ref$ ref$nd nd of %#"* %#"*12. 12.1. 1. &. CTA rendered rendered 3$dgmen 3$dgmentt declaring declaring the estat estate e of Dora Dora Anna Anna Wood e"et *r+ t,e a-ent +* t,e $n,er$tance ta". /ut #u/0ect t+ t,e e#tate ta" +rt, 13.145677 . a. As petitioner petitioner had had already already paid %+2")1+. %+2")1+.#'" #'" CIR as as ordered ordered to ref$nd %1"&##. %1"&##.*&. *&. ). !C: both !C: both filed an appeal a. CIR CIR appe appeal aled ed that that no reci recipr proc ocit ity y exis exists ts bet betee een n Cali Califor forni nia a and and %hil %hilip ippi pine ne las las44 Therefore" CTA/s decision sho$ld be reversed. b. c!rath c!rath also also appealed appealed alleging alleging that since CIR CIR accepted accepted a chec5 chec5 in f$ll settlement settlement of all all death taxes d$e and payable" it can no longer collect the alleged deficiency taxes. c. IUE81: W67 CTA erred in holding holding that there there exists exists reciprocity reciprocity beteen the Californi California a and %hilippine %hilippine las on the matter of the death tax on intangible personal property HELD: 8es" HELD: 8es" CTA erred. 7o reciprocity exists. Estate is liable f or payment of inheritance tax. RATIO: 7o reciprocity can be extended in the case of the estate of Dora Anna Wood beca$se the &a +* Ca&$*+rn$a d+e# n+t 'rant *u&& e"et$+n from the estate and inheritance taxes to 9ilipino residents in in that state. It is clear from both ,$oted provisions :see belo; that the rec$r+c$t- u#t /e t+ta&" t+ta& " that is" ith respect to transfer or death taxes of any and every character" in the case of the %hilippine la" and to legacy" s$ccession" or death tax of any and every character" in the case of the California la. If any of the to states collects or imposes and does not exempt any transfer" death" legacy" or s$ccession tax of any character" the reciprocity does not or5. ect$+n 122 +* +ur Nat$+na& Interna& Re%enue C+de provides< C+de provides< . . . And, . And, provided, further further " That no tax shall be collected $nder this Title in respect of intangible personal property :a; if the decedent at the time of his death as a resident of a foreign co$ntry hich at the time of his death did not impose a transfer tax or death tax of any character in respect of intangible personal property of citi=ens of the %hilippines not residing in the foreign co$ntry" or :b; if the las of the foreign co$ntry of hich the decedent as a resident at the time of his death allow a similar exemption from transfer transfer taxes or death taxes of every character in character in respect of intangible personal property oned by citi=ens of the %hilippines not residing in that foreign co$ntry.> ect$+n 13971 +* t,e Ca&$*+rn$a In,er$tance Ta" La reads< La reads< >0EC. #()#. Intangibles of nonresident< Conditions. Intangible personal property is exempt from the tax imposed by this part if the decedent at the time of his death as a resident of a Territory or another 0tate of the ?nited 0tates of a foreign state or co$ntry hich then imposed a legacy" s$ccession" or death tax in respect to intangible personal property of its on residents" b$t either< >:a; Did not impose a legacy" s$ccession" or death tax of any character in respect to intangible personal property of residents of this 0tate" or >:b; @ad in its las a reciprocal provision $nder hich intangible personal property of a non-resident as exempt from legacy" s$ccession" or death taxes of every character if the Territory or other 0tate 0tate of the ?nited 0tates or foreign state or co$ntry in hich the nonresident resided allos a similar exemption in respect to in tangible personal property of residents of the Territory or 0tate of the ?nited 0tates or foreign state or co$ntry of residence of the decedent.>
IUE82: W67 IUE82: W67 CIR/s acceptance of the chec5 in the amo$nt of %*"'2#.&*" in f$ll settlement of all death taxes taxes d$e and payabl payable" e" consti constit$t t$tes es a compro compromis mise e that that exting exting$is $ishes hes c!art c!arth>s h>s obliga obligatio tion n to pay
additional death taxes. HELD: 7B. The acceptance did not exting$ish c!arth/s obligation to pay additional death taxes. RATIO: The letter of acceptance of the amo$nt made by the Collector of Internal Reven$e is to the effect that the amo$nt sho$ld be acco$nted for as art a-ent of the estate tax d$e. There as" therefore. n+ a'reeent /eteen t,e ta"a-er and t,e C+&&ect+r +* Interna& Re%enue t,at t,e a+unt +**ered a# t+ /e acceted t+ c+r+$#e a ta" &$a/$&$t- . Taxes are fixed by la and are not s$b3ect to contract beteen the taxpayer and the tax officer" except hen there is an act$al compromise" hich in the case at bar does not exist. The acceptance of any amo$nt by employees or officials" hich does not constit$te a f$ll payment of the amo$nt fixed by la" is no gro$nd or reason for the claim for exemption by the taxpayer from liability for the remaining amo$nt d$e $nder the la. Taxes are not s$b3ect to agreements beteen the taxpayer and the tax officer" and if any s$ch agreements are made" they cannot serve to defeat or discharge the liability that the la fixes as the f$ll amo$nt of the tax. 9$rthermore" any error made by a tax official in the assessment or comp$tation of taxes does not have the effect of relieving the taxpayer from the f$ll amo$nt of liability as fixed by la. Errors of tax officers or officials of the !overnment do not bind the !overnment or pre3$dice its right to the taxes or d$es collectible by it from its citi=ens. IUE83: W67 the fail$re of CIR to ma5e a revised assessment p$rs$ant to 0ection '* and '1 of the 7ational Internal Reven$e Code relieves the administratrix from paying any deficiency in the inheritance taxes. HELD: 7B. 0ection '1 of the 7ational Internal Reven$e Code" $pon hich the claim is fo$nded" refers to the personal liability of an administratrix from any deficiency tax" not the liability of the estate $nder administration. !ranting that the administratrix may not be personally liable" it does not follo therefrom that the estate $nder administration o$ld also be free from liability. IUE8: W67 the estate is exempt from the payment of any deficiency tax beca$se of the fail$re of the Collector to ma5e the assessment of the deficiency death taxes and to demand their payment" in accordance ith 0ection '& of the 7IRC. HELD: 7B. 0ection '& of the 7IRC applies to a case here there is no ret$rn filed or here one is filed b$t is false or fra$d$lent. In the case at bar t,ere a# a return and t,e #ae a# n+t *a&#e +r *raudu&ent. @ence the assessment indicated in 0ection '& of the 7ational Internal Reven$e Code is not re,$ired. In any case" the assessment made in the letters of the respondent Collector are s$fficiently clear and specific" and are a valid assessment of the taxes on the estate $pon the facts and fig$res given by the co$nsel for petitioner c!rath. DIOITION: Decision of the CTA is reversed and Ellen W ood c!rath is re,$ired to pay %+"*+.1'.
