(Revenue Regulations No. 22-2020 issued on September 16, 2020)
This Tax Alert is issued to inform all concerned on the issuance of Notice of Discrepancy relative to the due process requirement in tax assessments.
The Notice of Discrepancy, which replaces the Notice of Informal Conference, will be issued to the taxpayer if he is found to be liable for deficiency taxes during investigation conducted by a revenue officer.
A Notice of Discrepancy is not yet a deficiency tax assessment. It only aims to fully afford the taxpayer with an opportunity to present and explain his side on the discrepancies found.
Based on the prescribed template for the Notice of Discrepancy, the taxpayer must be able to present and explain its side on the discrepancies noted by the BIR within 5 days from receipt of the notice. Should the taxpayer need more time to present documents, he may submit such documents after the discussion but within 30 days from receipt of the Notice of Discrepancy.
The discussion of discrepancies shall not extend beyond 30 days from the receipt of the notice. Within 10 days from the conclusion of the discussion of discrepancies, the investigating office shall endorse the case for review and approval for issuance of a Preliminary Assessment Notice if the taxpayer is still found to be liable for deficiency taxes.
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