Receiving an assessment from the Bureau of Internal Revenue (BIR) can be a stressful experience, especially if you believe it's incorrect. Fortunately, taxpayers have the right to protest these assessments. This article will guide you through the process, providing a clear understanding of how to draft and submit a Sample Letter of Protest to Bir Assessment, empowering you to protect your rights as a taxpayer.
Understanding the Sample Letter of Protest to Bir Assessment
A Sample Letter of Protest to Bir Assessment is a formal document submitted to the BIR to formally dispute a tax assessment. It's your official way of saying, "I disagree with this, and here's why." The importance of a well-crafted protest letter cannot be overstated, as it forms the foundation of your defense and can significantly influence the outcome of your case. It provides the BIR with a clear, organized explanation of your position, supported by evidence.
When preparing your protest, consider the following:
- Clarity: State your disagreement precisely.
- Accuracy: Ensure all facts and figures are correct.
- Evidence: Gather all supporting documents.
Here's a breakdown of key components typically found in a Sample Letter of Protest to Bir Assessment:
- Identification: Your name, address, TIN, and the assessment number being protested.
- Date of Assessment: The date the BIR issued the assessment.
- Grounds for Protest: A detailed explanation of why you disagree with the assessment.
- Supporting Documents: A list of all attached evidence.
- Relief Sought: Clearly state what you want the BIR to do (e.g., cancel or reduce the assessment).
It's also helpful to understand the different types of protests, which might influence the specific details in your Sample Letter of Protest to Bir Assessment. These generally fall into two categories:
| Type of Protest | Description |
|---|---|
| Protest against Disputed Assessment | Used when you disagree with the initial assessment itself. |
| Protest against Final Assessment Notice (FAN) | Used when you disagree with the final decision after an initial protest. |
Sample Letter of Protest to Bir Assessment Due to Incorrect Calculation
To: The Commissioner of Internal Revenue BIR National Office Quezon City Subject: Protest against Assessment Notice No. ___________ for Taxable Year ___________ - Incorrect Calculation Dear Commissioner, This letter is a formal protest against the assessment notice received on [Date of Assessment Notice] pertaining to the taxable year [Taxable Year]. The assessment claims a deficiency of [Amount] in [Type of Tax]. Upon thorough review of the assessment and our records, we have identified that the deficiency arises from an incorrect calculation of [Specific Item/Area of Calculation]. Our records, as supported by the attached [Document Name(s)], show that the correct calculation should result in [Correct Amount/No Deficiency]. We believe this is a clerical error or a misunderstanding of the applicable tax rules in this specific instance. We kindly request a review and reassessment of this matter, with the correction of the aforementioned calculation error. We are confident that once the calculation is rectified, the assessed deficiency will be nullified or significantly reduced. We are available to provide any further documentation or clarification needed to facilitate this review.
Sample Letter of Protest to Bir Assessment for Unsubstantiated Disallowance
To: The Regional Director BIR Revenue Region No. ______ [City/Province] Subject: Protest against Final Assessment Notice No. ___________ for Taxable Year ___________ - Unsubstantiated Disallowance Dear Regional Director, We are writing to formally protest the Final Assessment Notice (FAN) received on [Date of FAN] for Taxable Year [Taxable Year], with Assessment Notice No. ___________. The FAN indicates a deficiency of [Amount] in [Type of Tax], primarily due to the disallowance of [Specific Expense/Deduction]. We contend that the disallowance is unsubstantiated. The expense/deduction of [Amount] for [Purpose of Expense/Deduction] was legitimate, ordinary, and necessary for our business operations during the said taxable year. We have attached all supporting documents, including [List of Supporting Documents, e.g., official receipts, invoices, contracts, travel expense reports], which clearly substantiate the validity and business purpose of this expense. We respectfully request that you reconsider the disallowance based on the provided evidence. We believe that a review of these documents will demonstrate that the expense was properly incurred and should be allowed as a deduction. We are prepared to discuss this matter further and provide any additional information that may be required.
Sample Letter of Protest to Bir Assessment for Late Filing Penalty
To: The Revenue District Officer BIR Revenue District No. ______ [City/Province] Subject: Protest against Assessment Notice No. ___________ for Taxable Year ___________ - Request for Abatement of Late Filing Penalty Dear Revenue District Officer, This letter serves as a protest against the Assessment Notice No. ___________ dated [Date of Assessment Notice], which includes a penalty for late filing of our [Tax Type] return for Taxable Year [Taxable Year]. While we acknowledge that the filing was made on [Date Filed], which was subsequent to the statutory deadline, this delay was due to [Briefly and honestly explain the reason, e.g., unforeseen technical issues with our accounting software, a sudden illness of our accountant, natural disaster impacting office operations]. We have always endeavored to comply with tax regulations and have a history of timely filings. We respectfully request the abatement of the late filing penalty. We have attached [Mention any supporting documents, e.g., screenshot of error message, doctor's note, police report] to support our explanation for the delay. We assure you that such circumstances are exceptional and will take measures to prevent recurrence. We kindly request your favorable consideration of this matter.
Sample Letter of Protest to Bir Assessment Based on Incorrect Tax Rate Application
To: The Commissioner of Internal Revenue BIR National Office Quezon City Subject: Protest against Assessment Notice No. ___________ for Taxable Year ___________ - Incorrect Tax Rate Application Dear Commissioner, We wish to formally protest Assessment Notice No. ___________, dated [Date of Assessment Notice], concerning our tax liability for Taxable Year [Taxable Year]. The assessment is based on an alleged deficiency in [Type of Tax]. Our review indicates that the assessed deficiency stems from the application of an incorrect tax rate. We believe that the applicable tax rate for our income/transactions during the said year should have been [Correct Tax Rate]% based on [Specify the basis for the correct tax rate, e.g., our classification as a small business enterprise, the nature of our income as reported in our audited financial statements]. The BIR appears to have applied a rate of [Incorrect Tax Rate]% instead. We have attached our [Relevant Document, e.g., audited financial statements, certificate of tax exemption, BIR registration documents] for your review, which clearly outline our classification and the appropriate tax rate applicable to our business. We kindly request a reassessment of our tax liability using the correct tax rate. We are confident that this correction will resolve the discrepancy in the assessment.
Sample Letter of Protest to Bir Assessment for Double Taxation
To: The Commissioner of Internal Revenue BIR National Office Quezon City Subject: Protest against Assessment Notice No. ___________ for Taxable Year ___________ - Claim of Double Taxation Dear Commissioner, This letter serves as a formal protest against Assessment Notice No. ___________, received on [Date of Assessment Notice], for Taxable Year [Taxable Year]. The assessment claims a deficiency in [Type of Tax]. We believe this assessment constitutes double taxation. The income/transaction being assessed in this notice has already been subjected to tax, or is currently being subjected to tax, under [Specify the previous or concurrent tax assessment/law, e.g., a previous assessment from another BIR office, a different tax law under which the tax was already paid]. We have attached copies of [List of Supporting Documents, e.g., previous tax payment receipts, other assessment notices, relevant tax rulings] to demonstrate that the tax in question has already been paid or is legally accounted for. We respectfully request a thorough review of our tax records to confirm that the subject income/transaction has indeed been taxed previously. We implore you to cancel this erroneous assessment to prevent the imposition of double taxation, which is contrary to established tax principles. We are available to discuss this matter further and provide any additional proof required.
Sample Letter of Protest to Bir Assessment Due to Change in Law/Regulation
To: The Regional Director BIR Revenue Region No. ______ [City/Province] Subject: Protest against Assessment Notice No. ___________ for Taxable Year ___________ - Change in Applicable Law/Regulation Dear Regional Director, We are formally protesting Assessment Notice No. ___________, issued on [Date of Assessment Notice], for Taxable Year [Taxable Year]. The assessment pertains to a deficiency in [Type of Tax]. Our protest is based on a subsequent change in the applicable law or regulation that affects the tax treatment of the items in question. The assessment was made under [Previous Law/Regulation], but on [Date of Change], [New Law/Regulation] took effect, which [Explain how the new law/regulation affects the assessment, e.g., clarifies the tax treatment, provides an exemption, alters the calculation method]. We have attached [Mention any supporting documents, e.g., copy of the new law/regulation, BIR issuances related to the change, legal opinion] to support our position. We kindly request that the assessment be reviewed and adjusted in light of the prevailing and applicable [New Law/Regulation] that was in effect during the taxable year or at the time of resolution. We believe this change in law retroactively or prospectively impacts the validity of the current assessment.
Sample Letter of Protest to Bir Assessment After Court Ruling
To: The Commissioner of Internal Revenue BIR National Office Quezon City Subject: Protest against Assessment Notice No. ___________ for Taxable Year ___________ - Compliance with Court Ruling Dear Commissioner, This letter is a formal protest against Assessment Notice No. ___________, received on [Date of Assessment Notice], for Taxable Year [Taxable Year]. The assessment is for [Type of Tax] deficiency. Our protest is based on the recent ruling of the [Name of Court, e.g., Court of Tax Appeals, Supreme Court] in the case of [Case Name and Number], which was decided on [Date of Court Ruling]. This ruling has established a precedent that directly affects the tax treatment of the items assessed in our notice. Specifically, the court ruled that [Briefly explain the court's ruling relevant to your case]. We have attached a certified copy of the court decision and relevant documents such as [List of Supporting Documents, e.g., our tax returns, previous BIR correspondence] that demonstrate the applicability of this ruling to our situation. We respectfully request that this assessment be reconsidered and cancelled in light of the binding judicial pronouncement. We are seeking to align our tax obligations with the established legal interpretation by the honorable court.
Sample Letter of Protest to Bir Assessment for Incorrect Basis of Tax
To: The Revenue District Officer BIR Revenue District No. ______ [City/Province] Subject: Protest against Assessment Notice No. ___________ for Taxable Year ___________ - Incorrect Basis of Tax Dear Revenue District Officer, We are writing to formally protest Assessment Notice No. ___________, dated [Date of Assessment Notice], which assesses a deficiency in [Type of Tax] for Taxable Year [Taxable Year]. Our protest is based on the belief that the BIR has incorrectly determined the basis of tax. The assessment seems to have used [Incorrect Basis of Tax, e.g., gross sales instead of net sales, total revenue instead of taxable income] as the foundation for calculating our tax liability. Our records, as supported by the attached [Document Name(s), e.g., financial statements, sales reports, income statements], clearly show that the correct basis of tax for our business in the said taxable year should be [Correct Basis of Tax]. We kindly request a re-evaluation of this assessment, with the correct basis of tax being applied. We are confident that upon proper determination of the tax base, the assessed deficiency will be eliminated or significantly reduced. We are available to provide further clarification and documentation to assist in this review.
Sample Letter of Protest to Bir Assessment Due to Duplicative Assessment
To: The Commissioner of Internal Revenue BIR National Office Quezon City Subject: Protest against Assessment Notice No. ___________ and ___________ for Taxable Year ___________ - Duplicative Assessment Dear Commissioner, We wish to lodge a formal protest against Assessment Notice No. ___________ dated [Date of First Assessment] and Assessment Notice No. ___________ dated [Date of Second Assessment], both concerning Taxable Year [Taxable Year] and related to [Type of Tax/Taxable Item]. It is our contention that these two assessments are duplicative. The tax liability or the items being assessed in both notices pertain to the same income, transaction, or period, and we have already settled or accounted for this liability under one of the notices. We have attached copies of [List of Supporting Documents, e.g., tax payment receipts for one of the assessments, prior BIR correspondence addressing the same issue] that clearly show the overlap and the fact that the tax has been paid or the issue addressed. We respectfully request that one of these duplicative assessments be cancelled to prevent us from being taxed twice on the same matter. We implore your office to review our records and confirm the duplication, leading to the removal of the erroneous assessment. We are available to meet and provide any further information needed.
In conclusion, a Sample Letter of Protest to Bir Assessment is a vital tool for taxpayers who believe they have been incorrectly assessed. By understanding the necessary components, gathering supporting evidence, and clearly articulating your case, you can effectively challenge BIR assessments. Remember to always maintain a respectful and professional tone in your communication. Seeking professional advice from a tax consultant or lawyer is also highly recommended if you are unsure about the process or the specifics of your case.