The taxpayer has the primary responsibility for the proper preparation of the waiver of the prescriptive period for assessing deficiency taxes

Adopting the ruling in CIR vs. Next Mobile Inc.(G.R. NO. 212825, 07 December 2015), the Court declared that as a general rule, a waiver of statute of limitations in taxes that did not comply with the requisites for validity specified in RMO No. 20-90 and RDAO 01-05 was invalid and ineffective to extend the prescriptive period to assess the deficiency taxes. However, as an exception to the rule, the following waivers could be treated as an exemption and valid for the reason that theparties are in pari delicto or “in equal fault”.

The Petitioner, after voluntary executing several waivers insisted on their invalidity by raising the very same defects it caused such as (a) the waivers were notarized by its own employee; (b) the BIR did not indicate the date of its acceptance; (c) the BIR did not specify the amounts and the taxes involved; and (d) Respondent did not sign the waivers. Yet, the Petitioner’s act of impugning the waivers after benefitting therefrom and allowing the Respondent to rely on the same is an act of bad faith. On the other hand, the Respondent’s negligence in the performance of its duties was so gross that it also amounted to bad faith. Since the parties are both at fault, they shall have no action against each other.

Asian Transmission Corporation, vs. Commissioner of Internal Revenue

G.R. No. 230861, 19 September 2018