Application of the BIR's 10-year prescriptive period

IF there is one thing that taxpayers would like to avoid receiving from the Bureau of Internal Revenue (BIR), it is definitely a letter of assessment, which signifies that the taxpayer is subject to a tax audit or an investigation by the BIR. When confronted with such, taxpayers should be aware of their rights so that they can properly defend themselves from unwarranted assessments.

In a recent case promulgated by the Court of Tax Appeals (CTA) — Case 10098 dated July 12, 2024 — the CTA had the opportunity to further clarify the issue of application of the 10-year prescriptive period following the Supreme Court decision, GR 247737 promulgated on Aug. 8, 2023.