ATENEO LAW SCHOOL

Course Outline
Tax I
Academic Year 2014 2015

I.

Atty. Terence Conrad H. Bello

Baniqued & Baniqued
633-9418 (Office); 633-1911 (Fax)
thbello@baniquedlaw.com
www.baniquedlaw.com

INTRODUCTION AND GENERAL PRINCIPLES

A. General Principles
Read BENJAMIN B. ABAN, LAW OF BASIC TAXATION IN THE PHILIPPINES 1-29
(2000)
Tio v. Videogram Regulatory Board, 151 SCRA 208 (1987)
Lutz v. Araneta, 98 Phil. 148 (1955)
Commissioner of Internal Revenue v. Algue, 241 Phil. 829 (1988)
B. Limitations on Taxing Power
1. Inherent Limitations on Taxing Power
ABAN, 53-66
Mactan Cebu Intl Airport Authority v. Marcos, 261 SCRA 667 (1996)
2. Constitutional Limitations on Taxing Power
ABAN, 66-94
VAT Ruling No. 7-2006, June 7, 2006
C. Double Taxation
ABAN, 113-118
D. Construction of Tax Statutes
1. Liberal Construction in Favor of Taxpayers
ABAN, 144
Manila Railroad v. Collector of Customs, 52 Phil. 950 (1929)
Commissioner of Internal Revenue v. Firemens Fund Ins. Co., 148 SCRA
315 (1987)
2. Strict Construction of Tax Exemptions
ABAN, 118-124
Sea-Land Services, Inc. v. Commissioner of Internal Revenue, G.R. No.
122605, April 30, 2001
Maceda v. Macaraig, G.R. No. 882291, May 31, 1991
Commissioner of Internal Revenue v. CA, 240 SCRA 368 (1995)
3. Liberal Construction vs. Strict Construction: When Applicable?
Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corp.,
G.R. No. 192398, Sept. 29, 2014
E. Tax Avoidance v. Tax Evasion
ABAN, 124-128
Commissioner of Internal Revenue v. Estate of Toda, 438 SCRA 290 (2004)
Delpher Trades Corp. v. IAC, 157 SCRA 349 (1988)

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II.

MEANING OF INCOME AND THE REALIZATION PRINCIPLE

Sec. 32(A), NIRC1
Sec. 36, Rev. Regs. 2
A. What is Income (A Definitional Concept)?
Fisher v. Trinidad (Oct. 30, 1922)
Eisner v. Macomber, 252 U.S. 189 (1920)
U.S. v. Kirby Lumber Co., 284 U.S. 1 (1931)
Helvering v. Bruun, 309 U.S. 461 (1940)
CIR v. Glenshaw Glass Co., 348 U.S. 426 (1955)
James v. U.S., 366 U.S. 213 (1961)
B. Realization Requirement
Sec. 38, Rev. Regs. 2
Helvering v. Bruun, supra
Helvering v. Horst, 311 U.S. 112 (1940)
Cottage Sav. Assn v. CIR, 499 U.S. 554 (1991)
C. Other Relevant Concepts
1. Tax-Free Imputed Income v. Taxable Barter
Sec. 41, Rev. Regs. 2
CIR v. Minzer, 279 F.2d 338 (5th Cir. 1960)
Rev. Rul. 79-24, 1979-1 C.B. 60
2. Tax-Free Return of Capital
Sec. 36, Rev. Regs. 2
Clark v. CIR, 40 B.T.A. 333 (1939)
BIR Rul. 51-00 (Oct. 30, 2000)
BIR Rul. 184-90 (Sept. 20, 1990)
Rev. Rul. 81-277, 1981-2 C.B. 14
3. Windfall Receipts
Sec. 32(A)(9) and (B)(7)(c)
Cesarini v. U.S., 296 F. Supp. 3 (ND Ohio 1969)
Hornung v. CIR, 47 TC 428 (1967)
4. Tax Benefit Principle Recovery of Deducted Items
Sec. 34(E)(1), proviso
BIR Rul. 102-95 (July 7, 1995)
5. Indirect Receipts Cancellation of Indebtedness and Discharge by 3rd
Parties
Sec. 50, Rev. Regs. 2
BIR Rul. 76-89 (April 17, 1989)
Old Colony Trust Co. v. CIR, 279 U.S. 716 (1929)
BIR Rul. 85-95 (June 13, 1995)

Unless otherwise indicated, section references are to the 1997 NIRC.

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III.

GROSS INCOME
A. Inclusions
Sec. 32(A)
1. Compensation: Special Problems on In-Kind Compensation
Sec. 2.78.1(A) and (1), Rev. Regs. 2-98 (April 17, 1998)
a. Limited Choice and Restricted Property
U.S. v. Drescher, 179 F.2d 863 (2nd Cir. 1950)
BIR Rul. 9-04 (Sept. 13, 2004)
b. Forced Consumption: Convenience of the Employer Rule
Sec. 2.78.1(A)(2), Rev. Regs. 2-98 (April 17, 1998)
Sec. 2, Rev. Audit Mem. Order 1-87 (April 23, 1987)
Benaglia v. CIR, 36 B.T.A. 838 (1937)
c. De Minimis Benefits
Sec. 2.78.1(A)(3), Rev. Regs. 2-98 (April 17, 1998)
BIR Rul. 23-02 (June 21, 2002)
d. Travel and Entertainment
Rudolph v. U.S., 370 U.S. 269 (1962)
2. Business Income
3. Gains
4. Interests
5. Rents
6. Royalties
7. Dividends
Sec. 73
Sec. 250-256, Rev. Regs. 2
Wise & Co., Inc. v. Meer (June 30, 1947)
CIR v. CA (Jan. 20, 1999)
CIR v. Manning (Aug. 6, 1975)
BIR Rul. 39-02 (Nov. 11, 2002)
8. Annuities
9. Prizes and winnings
10. Pensions
11. Share in GPPs Income
Sec. 26
B. Exclusions
Sec. 32(B)
1. Gifts, Bequests and Devises
Sec. 32(B)(3)
CIR v. Duberstein, 363 U.S. 278 (1960)
Hornung v. CIR, supra
2. Compensation for Injuries or Sickness
Sec. 32(B)(4)
OGilvie v. U.S., 519 U.S. 79 (1996)
Murphy v. U.S., No. 05-5139 (D.C. Cir. Aug. 22, 2006)
Murphy v. U.S., No. 05-5139 (D.C. Cir. July 3, 2007) (on rehearing)

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BIR Rul. 57-83 (April 12, 1983)

3. Retirement Benefits, Pensions, Gratuities, etc.
Sec. 32(B)(6) and (7)(e)
CIR v. CA (March 23, 1992)
CIR v. CA (Oct. 17, 1991)
In Re: Atty. Bernardo Zialcita, A.M. No. 90-6-015-SC (Oct. 18, 1990)
BIR Rul. 1-95 (Jan. 6, 1995)
Rep. Act No. 4917 (June 17, 1967)
Rep. Act No. 7833 (Dec. 8, 1994)
Rev. Regs. 2-95 (Jan. 3, 1995)
RMC 36-94 (Dec. 14, 1994)
4. Income Derived by Foreign Government
Sec. 32(B)(7)(a)
CIR v. Mitsubishi Metal Corp. (Jan. 22, 1990)
5. Gains from the Sale of Bonds, Debentures or Other Certificates of
Indebtedness
Sec. 32(B)(7)(g)
Nippon Life Ins. Co., Inc. v. CIR, CTA Case No. 6142 (Feb. 4, 2002)
IV.

DEDUCTIONS
Sec. 34
Sec. 36(A)
Secs. 119 to 120, Rev. Regs. 2
A. Expenses
Sec. 34(A)
1. Non-Deductible Personal Expenses v. Deductible Business Expenses
Smith v. CIR, 40 B.T.A. 1038 (1939)
Pevsner v. CIR, 628 F.2d 467 (5th Cir. 1980)
Rudolph v. U.S., supra
Schultz v. CIR, 16 T.C. 401 (1951)
2. Travel Expenses While Away from Home
CIR v. Flowers, 326 U.S. 465 (1946)
Hantzis v. CIR, 638 F.2d 248 (1st Cir. 1981)
3. Deductible Current Expenses v. Non-Deductible Capital Expenditures
Mt. Morris Drive-In Theatre Co. v. CIR, 25 T.C. 272 (1955)
Midland Empire Packing Co. v. CIR, 14 T.C. 635 (1950)
INDOPCO, Inc. v. CIR, 503 U.S. 79 (1992)
CIR v. General Foods (Phil.), Inc. (April 24, 2003)
4. Ordinary and Necessary
Welch v. Helvering, 290 U.S. 111 (1933)
Atlas Consolidated Mining & Devt Corp. v. CIR (Jan. 27, 1981)
5. Reasonable Compensation
C.M. Hoskins & Co., Inc. v. CIR (Nov. 28, 1969)
Kuenzle & Streiff, Inc. v. Collector (Oct. 20, 1959)
6. Period for Which Deductions and Credits Taken

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B.

C.

D.

E.

F.

G.

H.

I.

J.
K.

Sec. 45
CIR v. Isabela Cultural Corp. (Feb. 12, 2007)
Interest
Sec. 34(B)
Paper Ind. Corp. of the Phil. v. CA (Dec. 1, 1995)
CIR v. Vda. de Prieto (Sept. 30, 1960)
Rev. Regs. 13-2000 (Nov. 20, 2000)
1. Interest arbitrage
BIR Rul. No. 006-00 (Jan. 5, 2000)
Taxes
Section 34(C)
CIR v. Lednicky (July 31, 1964)
Losses
1. Casualty losses
Sec. 34(D)(1), (2)
2. NOLCO
Sec. 34(D)(3)
Paper Ind. Corp. of the Phil. v. CA, supra
Rev. Regs. 14-01 (Aug. 27, 2001)
BIR Rul. 30-00 (Aug. 10, 2000)
3. Realized vs. unrealized losses
BIR Rul. No. 206-90 (Oct. 30, 1990)
BIR Rul. No. 144-85 (Aug. 26, 1985)
4. Losses from sales or exchanges (to be taken-up in XV below)
Bad Debts
Section 34(E)
Rev. Regs. 5-99 (March 10, 1999)
Phil. Refining Co. v. CA (May 8, 1996)
Fernandez Hermanos, Inc. v. CIR (Sept. 30, 1969)
Depreciation
Sec. 34(F)
Basilan Estates, Inc. v. CIR (Sept. 5, 1967)
Limpan Investment Corp. v. CIR (July 26, 1966)
Depletion
Sec. 34(G)
Consolidated Mines, Inc. v. CTA (Aug. 29, 1974)
Charitable and Other Contributions
Sec. 34(H)
BIR Rul. 19-01 (May 10, 2001)
Research and Development
Sec. 34(I)
3M Phil., Inc. v. CIR (Sept. 26, 1988)
Pension Trusts
Sec. 34(J)
Additional Requirements for Deductibility

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Section 34(K)
L. Optional Standard Deduction
Sec. 34(L), as amended by Rep. Act No. 9504
M. Premium Payments
Sec. 34(M)
V.

TAXABLE INCOME
Sec. 31

VI.

GENERAL PRINCIPLES OF INCOME TAXATION

Sec. 23

VII.

INCOME TAX ON INDIVIDUALS

A. Definitions
1. Resident Citizens and Resident Aliens
Sec. 22(F)
Sec. 5, Rev. Regs. 2
Garrison v. CA (July 19, 1990)
Ramnani v. CIR, CTA Case No. 5108 (Sept. 13, 1996)
2. Non-Resident Citizens
Sec. 22(E)
Rev. Regs. 1-79 (Jan. 8, 1979)
Rev. Regs. 5-01 (July 31, 2001)
BIR Rul. No. 33-00 (Sept. 5, 2000)
3. Non-Resident Aliens Engaged/not Engaged in Trade or Business in the
Philippines
Sec. 22(G)
Secs. 5 and 6, Rev. Regs. 2
4. Dependent
Sec. 35(B), as amended by Rep. Act No. 9504
5. Minimum Wage Earner
Sec. 22(HH), as inserted by Rep. Act No. 9504
B. Income Tax on Citizens and Resident Aliens
1. Income Tax Rate and Base, In General
Sec. 24(A)
Sec. 31
2. Special Exemption of Minimum Wage Earners
Section 24(A), proviso
3. Income Tax Rate and Base on Certain Types of Income
a. Final Income Tax on Interests, Royalties, Prizes, and Other Winnings
Sec. 24(B)(1)
Sec. 22(Y)
Sec. 22(FF)
Rev. Regs. 10-98 (Aug. 25, 1998)
b. Final Income Tax on Cash and/or Property Dividends

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Sec. 24(B)(2)
Sec. 73
c. Capital Gains Tax on Sale of Shares
Sec. 24(C)
Sec. 127(A)
Sec. 22(L)
Sec. 22(U)
Benguet Corp. v. CIR, CTA Case No. 5324, July 2, 1998
d. Capital Gains Tax on Sale of Realty
Sec. 24(D)
Rev. Regs. 8-98 (Aug. 25, 1998)
Rev. Regs. 13-99 (July 26, 1999)
Rev. Regs. 14-2000 (Nov. 20, 2000)
Rev. Regs. 4-99 (March 9, 1999)
4. Personal and Additional Exemptions
Sec. 35(A) & (B), as amended by Rep. Act No. 9504
5. Change of Status
Sec. 35(C), NIRC
6. Optional Standard Deduction
Sec. 34(L), as amended by Rep. Act No. 9504
7. Premium Payments on Health and/or Hospitalization Insurance
Sec. 34(M), NIRC
C. Income Tax on Nonresident Aliens Engaged in Trade or Business in the
Philippines
1. Meaning of Engaged in Trade or Business
Sec. 8, Rev. Regs. 2
Sec. 25(A)(1)
Higgins v. CIR, 312 U.S. 212 (1941)
Weliner v. CIR, CTA Case No. 3170 (May 23, 1986)
2. Income Tax Rate and Tax Base, In General
Sec. 25(A)(1)
Sec. 31
3. Income Tax Rate and Base on Certain Types of Income
a. Cash and/or Property Dividends from a Domestic Corporation or
Joint Stock Company, or Insurance or Mutual Fund Co., or ROHQ, or
Share in the Distributable Net Income of a Taxable Partnership,
Interests, Royalties, Prizes, and Other Winnings
Sec. 25(A)(2)
b. Capital Gains on the Sale of Shares and Realty
Sec. 25(A)(3)
4. Personal Exemption Allowable to Nonresident Alien Individuals
Engaged in Trade or Business in the Philippines
Sec. 35(D)
D. Nonresident Aliens not Engaged in Trade or Business in the Philippines
Sec. 25(B)

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CIR v. Wodehouse, 337 U.S. 369 (1949)

E. Special Aliens
Sec. 25(C), (D), (E)
VIII.

INCOME TAX ON DOMESTIC CORPORATIONS

A. Definition of Domestic Corporation
Sec. 22(B), (C)
AFISCO Insurance Corp. v. CA (Jan. 25, 1999)
Pascual v. CIR (Oct. 18, 1988)
Obillos v. CIR (Oct. 29, 1985)
Ona v. CIR (May 25, 1972)
BIR Rul. No. 317-92 (Oct. 28, 1992)
B. Income Tax Rate and Tax Base, In General
Sec. 27(A)
Sec. 31
C. Proprietary Educational Institutions and Hospitals
Sec. 27(B)
DOF Order 137-87 (Dec. 16, 1987) Secs. 1 to 4
DOF Order 149-95 (Nov. 24, 1995)
D. GOCCs
Sec. 27(C)
E. Passive Income
Sec. 27(D)
1. Interest, Deposit Substitutes, Royalties
Sec. 22(Y)
BIR Rul. 57-00 (Nov. 7, 2000)
2. Sale of Shares
Rev. Regs. 2-82 (March 29, 1982) Secs. 1 to 6 and 8
3. FCDU
Rev. Regs. 10-98 (Aug. 25, 1998) except Sec. 2.58
4. Intercorporate Dividends
CIR v. Manning (Aug. 6, 1975)
5. Sale of Realty
Rev. Regs. 8-98 (Aug. 25, 1998) Secs. 1 to 3
RR 4-99 (March 9, 1999)
F. Minimum Corporate Income Tax (MCIT)
Sec. 27(E)
Rev. Regs. 9-98 (Aug. 25, 1998) except Sec. 2.28(E)(7) Accounting
Treatment
The Manila Banking Corp. v. CIR (Aug. 28, 2006)

IX.

INCOME TAX ON RESIDENT FOREIGN CORPORATIONS

A. Definition
Sec. 22(B), (C), (D), (H)

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B. Meaning of Engaged in Trade or Business

Sec. 3(d), Rep. Act No. 7042 (Foreign Investments Act of 1991), as
implemented by Sec. 1(f), FIA 91 IRR
Island Power Corp. v. CIR, CTA Case No. 5922 (May 17, 2004)
C. Income Tax Rate and Tax Base, In General
Sec. 28(A)(1)
Sec. 31
D. Special Resident Foreign Corporations
1. International Carriers
Sec. 28(A)(3)
CIR v. British Overseas Airways Corp. (April 30, 1987)
Rev. Regs. 15-2002 Secs. 1 to 5 only
2. OBUs/FCDUs
Sec. 28(A)(4)
Rev. Regs. 10-76 (Dec. 14, 1976)
Rev. Regs. 14-77 (Nov. 9, 1977)
Rev. Regs. 10-98 (Aug. 25, 1998) - except Sec. 2.58
3. RHQs and ROHQs
Sec. 22(DD) & (EE)
Sec. 28(A)(6)
E. Branch Profit Remittance Tax
Sec. 28(A)(5)
Bank of America NT & SA v. CA (July 21, 1994)
Compania General de Tabacos de Filipinas v. CIR, CTA Case No. 4451 (Nov.
17, 1993)
RMC 55-80 (Dec. 3, 1980)
BIR Rul. 157-81 (July 13, 1981)
BIR Rul. 80-89 (April 29, 1989)
BIR Rul. 49-86 (April 23, 1986)
F. MCIT
Sec. 28(A)(2)
G. Tax on Certain Incomes of Resident Foreign Corporations
Sec. 28(A)(7)
1. Interest, Yields, Royalties
2. FCDU Income
3. Capital Gain from Sale of Shares
4. Intercorporate dividends
X.

INCOME TAX ON NON-RESIDENT FOREIGN CORPORATIONS

Sec. 28(B)
A. Income Tax Rate and Tax Base, In General
Sec. 28(B)(1)
Marubeni Corp. v. CIR (Sept. 14, 1989)

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N.V. Reederij Amsterdam and Royal Interocean Lines v. CIR (June 23,
1988)
B. Special Non-Resident Foreign Corporations
1. Non-Resident Cinematographic Film Owner, Lessor or Distributor
Sec. 28(B)(2)
2. Non-Resident Owner or Lessor of Vessels Chartered by Philippine
Nationals
Sec. 28(B)(3)
3. Non-Resident Owner or Lessor of Aircraft, Machinery and Other
Equipment
Sec. 28(B)(4)
C. Tax on Certain Incomes of Non-resident Foreign Corporations
Sec. 28(B)(5)
1. Interest on Foreign Loans
2. Intercorporate Dividends
BIR Rul. 8-00 (Jan. 5, 2000)
3. Capital Gain from Sale of Shares
4. Income Covered by Tax Treaties
ITAD Ruling 102-02 (May 28, 2002)
XI.

IMPROPERLY ACCUMULATED EARNINGS TAX (IAET)

Sec. 29
The Manila Wine Merchants, Inc. v. CIR (Feb. 20, 1984)
CIR v. Tuason (May 15, 1989)
Cyanamid Philippines, Inc. v. CA (Jan. 20, 2000)
Rev. Regs. 2-01 (Feb. 12, 2001)
BIR Rul. 25-02 (June 25, 2002)

XII.

TAX-EXEMPT CORPORATIONS
Sec. 30
CIR v. G. Sinco Educational Corp. (Oct. 23, 1956)
Executive Order 226, Article 39
Republic Act 7916, Secs. 23 25
CIR v. CA, CTA and Young Mens Christian Assoc. of the Phil., Inc. (Oct. 14,
1998)
CIR v. St. Lukes Medical Center, Inc. (G.R. No. 195509, Sept. 26, 2012)

XIII.

FRINGE BENEFITS TAX (FBT)

Sec. 33
Rev. Regs. 3-98 (Jan. 1, 1998)
Rev. Regs. 8-00 (Aug. 21, 2000)
Rev. Regs. 10-00 (Dec. 14, 2000)

XIV.

CAPITAL GAINS AND LOSSES

A. Capital Assets

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B.

C.
D.
E.

XV.

Sec. 39
Sec. 132, Rev. Regs. 2
Corn Products Refining Co. v. CIR, 350 U.S. 46 (1955)
Arkansas Best Corp. v. CIR, 485 U.S. 212 (1988)
Calasanz v. CIR (Oct. 9, 1986)
BIR Rul. 27-02 (July 15, 2002)
Ordinary income
Sec. 22(Z)
Tuason v. Lingad (July 31, 1974)
Net Capital Gain, Net Capital Loss
Jardine Davies, Inc. v. CIR, CTA Case No. 5738 (Aug. 1, 2000)
Percentage Taken into Account
Limitation on Capital Loss
China Banking Corporation vs. Court of Appeals (July 19, 2000)

DETERMINATION OF GAIN OR LOSS FROM SALE OR EXCHANGE OF

PROPERTY
Sec. 40
Sec. 136-143, Rev. Regs. 2
A. Computation of Gain or Loss
Sec. 40(A)
Crane v. CIR, 331 U.S. 1 (1947)
B. Amount Realized
Sec. 40(A)
C. Cost or Basis for Determining Gain or Loss
Sec. 40(B)
Philadelphia Park Amusement Co. v. U.S., 126 F. Supp. 184 (1954)
D. Exchange of Property
1. General Rule Gain Recognition
Sec. 40(C)(1)
2. Exception Non-Recognition Transactions (Tax-Free Exchange)
a. Transfer of Property to a Controlled Corporation
Sec. 40(C)(6)(c)
Sec. 40(C)(2), last par., NIRC
Delpher Trades Corp. v. IAC (Jan. 26, 1988)
BIR Rul. No. 274-87 (Sept. 9, 1987)
RMR 01-01 (Nov. 29, 2001)
Intermountain Lumber v. CIR, 65 T.C. 1025 (1976)
b. Statutory Merger or Consolidation
Sec. 40(C)(6)(a), (b)
Sec. 40(C)(2)(a), (b), (c)
CIR v. Rufino (Feb. 27, 1987)
c. Transfer of Substantially All the Assets (De Facto Merger)
Sec. 40(C)(6)(a), (b)
Sec. 40(C)(2)(a), (b), (c)

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BIR Rul. 19-97 (Feb. 27, 1997)

RMR 1-02 (April 25, 2002)
d. Exchange Not Solely in Kind (Boot)
Sec. 40(C)(3)
e. Assumption of Liability in Tax-Free Exchanges
Sec. 40(C)(4)
f. Carry-Over/Substituted Basis in Tax-Free Exchanges
Sec. 40(C)(5)
Rev. Regs. 18-01 (Nov. 13, 2001), Sec. 2 only
g. Business Purpose
Gregory v. Helvering, 293 U.S. 465 (1935)
3. Losses from Wash Sales of Stocks or Securities
Sec. 38
Sec. 131, Rev. Regs. 2
XVI.

SITUS OF TAXATION
Sec. 42
A. Gross Income from Sources Within and Without the Phils.
Sec. 42(A) and (C)
1. Interest
Sec. 42(A)(1) and (C)(1)
2. Dividends
Sec. 42(A)(2) and (C)(2)
3. Compensation for Personal Services
Sec. 42(A)(3) and (C)(3)
CIR v. Marubeni Corp. (Dec. 18, 2001)
CIR v. British Overseas Airways Corp. (April 30, 1987); read dissenting
opinion of J. Feliciano
Howden & Co., Ltd. v. Collector (April 14, 1965)
Korfund Co., Inc. v. CIR, 1 T.C. 1180 (1943)
Stemkowski v. CIR, 690 F.2d 40 (1982)
4. Rentals and Royalties
Sec. 42(A)(4) and (C)(4)
Rev. Rul. 68-443, 1968-2 C.B. 304
Phil. American Life Ins. Co., Inc. v. CTA, CA-GR Sp. No. 31283 (April 25,
1995)
a. Compensation for Personal Services or Royalty?
Karrer v. U.S., 152 F. Supp. 66 (1957)
Boulez v. CIR, 83 T.C. 584 (1984)
5. Sale or Real Property
Sec. 42(A)(5) and (C)(5)
6. Sale of Personal Property
Sec. 42(A)(6) and (E)
a. Sale by Producer or Manufacturer of Personal Property
b. Purchase and Sale of Personal Property

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c. Sale of Shares of Stock in a Domestic Corporation

d. Outright Sale or Assignment of Intangibles
RMC 44-2005 (Sept. 1, 2005)
B. Income from Sources Partly Within or Without the Philippines
CIR v. CTA and Smith Kline & French Overseas (Jan. 17, 1984)
RAMO 1-95 (March 21, 1995)
RAMO 1-86 (April 25, 1986)
RAMO 4-86 (April 5, 1986)
Rev. Regs. 16-86 (Sept. 26, 1986)
XVII.

ACCOUNTING PERIODS AND METHODS

Secs. 43-50
Secs. 166-177, Rev. Regs. 2
Secs. 51-53, Rev. Regs. 2
A. Accounting Method - cash (actual or constructive) or accrual
B. Hybrid Method
Consolidated Mines, Inc. v. CTA (Aug. 29, 1974)
C. Percentage of Completion Method
Sec. 48
Sec. 44, Rev. Regs. 2
D. Change of Accounting Period
E. Installment Basis
F. Allocation of Income and Deductions

XVIII. RETURNS AND PAYMENT OF TAXES

A. Individual Return
Secs. 51 & 56
1. Who are Required to File
2. Those not Required to File
3. Where to File
4. When to File
5. Where to Pay
6. Capital Gains on Shares of Stocks and Real Estate
7. Quarterly Declaration of Income Tax
Sec. 74
B. Corporation Returns
Sec. 52, 53 & 56
1. Quarterly Income Tax
Sec. 75
2. Final Adjustment Return
Sec. 76
BPI-Family Savings Bank v. Court of Appeals (April 12, 2000)
Philam Asset Mgt., Inc. v. CIR (Dec. 14, 2005)
3. Where to File
4. When to File

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Sec. 77
5. When to Pay
6. Capital Gains on Shares of Stock
7. Return of Corporations Contemplating Dissolution/Reorganization
Sec. 52(C)
Sec. 244, Rev. Regs. 2
Bank of the Philippine Islands v. CIR, CA-GR SP No. 38304 (April 14, 2000)
8. Returns of GPPs
Sec. 55
XIX.

WITHHOLDING TAX
A. Final Withholding Tax at Source
Sec. 57(A)
CIR vs. Wander Philippines, Inc. (April 15, 1988)
CIR v. Procter & Gamble Phil. Mfg. Corp. (April 15, 1988)
Sec. 2.57(A) & 2.57.1, Rev. Regs. 2-98 (April 17, 1998)
B. Creditable Withholding Tax
Sec. 57(B)
Filipinas Synthetic Fiber Corporation v. CA (Oct. 12, 1999)
Sec. 2.57(B) & 2.57.2, Rev. Regs. 2-98 (April 17, 1998)
C. Return and Payment of Tax
Sec. 58
D. Withholding on Wages
Sec. 78 83
Sec. 2.78, Rev. Regs. 2-98 (April 17, 1998)
E. Withholding Tax by Government Agencies
Sec. 2.57.2(N), Rev. Regs. 2-98 (April 17, 1998)

XX.

ESTATES AND TRUSTS

Sec. 60-66
Sec. 207-213, Rev. Regs. 2
A. General Rule on Taxability: Fiduciary or Beneficiary
B. Personal Exemption Allowed
C. Decedents Estate Administration
D. Revocable Trusts
E. Income for Benefit of Grantor

Tax I Course Outline

Atty. Terence Conrad H. Bello

WEEK 1 I
WEEK 2 II to III
WEEK 3 IV
WEEK 4 IV
WEEK 5 V to VII
WEEK 6 VIII to IX
WEEK 7 Midterms
WEEK 8 X to XIII
WEEK 9 XIV
WEEK 10 XV
WEEK 11 XVI to XVII
WEEK 12 XVIII
WEEK 13 XIX
WEEK 14 Finals

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