(26) Ka Pedring Matibag, a sole proprietor, buys and sells "kumot at kulambo" both of which are

subject to value-added tax. Since he is using the calendar year as his taxable year, his taxable
quarters end on the last day of March, June, September, and December. When should Ka Pedring
file the VAT quarterly return for his gross sales or receipts for the period of June 1 to September 30?

(A) Within 25 days from September 30

(B) Within 45 days from September 30

(C) Within 15 days from September 30

(D) Within 30 days from September 30

(27) In January 2011, the BIR issued a ruling that Clemen's vodka imports were not subject to
increased excise tax based on his claim that his net retail price was only P200 per 750 milliliter
bottle. This ruling was applied to his imports for May, June, and July 2011. In September 2011, the
BIR revoked its ruling and assessed him for deficiency taxes respecting his May, June and July 2011
vodka imports because it discovered that his net retail price for the vodka was P250 per bottle from
January to September 2011. Does the retroactive application of the revocation violate Clemen's right
to due process as a taxpayer?

(A) Yes, since the presumption is that the BIR ascertained the facts before it made its ruling.

(B) No, because he acted in bad faith when he claimed a lower net retail price than what he
actually used.

(C) No, since he could avail of remedies available for disputing the assessment.

(D) Yes, since he had already acquired a vested right in the favorable BIR ruling.

(28) Don Fortunato, a widower, died in May, 2011. In his will, he left his estate of P100 million to his
four children. He named his compadre, Don Epitacio, to be the administrator of the estate. When the
BIR sent a demand letter to Don Epitacio for the payment of the estate tax, he refused to pay
claiming that he did not benefit from the estate, he not being an heir. Forthwith, he resigned as
administrator. As a result of the resignation, who may be held liable for the payment of the estate
tax?

(A) Don Epitacio since the tax became due prior to his resignation.

(B) The eldest child who would be reimbursed by the others.

(C) All the four children, the tax to be divided equally among them.

(D) The person designated by the will as the one liable.

(29) On July 31, 2011, Esperanza received a preliminary assessment notice from the BIR
demanding that she pays P180,000.00 deficiency income taxes on her 2009 income. How many
days from July 31, 2011 should Esperanza respond to the notice?

(A) 180 days.

(C) 60 days.

(D) 15 days.

(30) The BIR could not avail itself of the remedy of levy and distraint to implement, through
collection, an assessment that has become final, executory, and demandable where

(A) the subject of the assessment is an income tax.

(B) the amount of the tax involved does not exceed P100.00.

(C) the corporate taxpayer has no other uncollected tax liability.

(D) the taxpayer is an individual compensation income earner.

(31) Alain Descartes, a French citizen permanently residing in the Philippines, received several
items during the taxable year. Which among the following is NOT subject to Philippine income
taxation?

(A) Consultancy fees received for designing a computer program and installing the same in
the Shanghai facility of a Chinese firm.

(B) Interests from his deposits in a local bank of foreign currency earned abroad converted to
Philippine pesos.

(C) Dividends received from an American corporation which derived 60% of its annual gross
receipts from Philippine sources for the past 7 years.

(D) Gains derived from the sale of his condominium unit located in The Fort, Taguig City to
another resident alien.

(32) Income is considered realized for tax purposes when

(A) it is recognized as revenue under accounting standards even if the law does not do so.

(B) the taxpayer retires from the business without approval from the BIR.

(C) the taxpayer has been paid and has received in cash or near cash the taxable income.

(D) the earning process is complete or virtually complete and an exchange has taken place.

(33) Which among the following circumstances negates the prima facie presumption of correctness
of a BIR assessment?

(A) The BIR assessment was seasonably protested within 30 days from receipt.

(B) No preliminary assessment notice was issued prior to the assessment notice.
 (C) Proof that the assessment is utterly without foundation, arbitrary, and capricious.

(D) The BIR did not include a formal letter of demand to pay the alleged deficiency.

(34) On March 30, 2005 Miguel Foods, Inc. received a notice of assessment and a letter of demand
on its April 15, 2002 final adjustment return from the BIR. Miguel Foods then filed a request for
reinvestigation together with the requisite supporting documents on April 25, 2005. On June 2, 2005,
the BIR issued a final assessment reducing the amount of the tax demanded. Since Miguel Foods
was satisfied with the reduction, it did not do anything anymore. On April 15, 2010 the BIR garnished
the corporation's bank deposits to answer for the tax liability. Was the BIR action proper?

(A) Yes. The BIR has 5 years from the filing of the protest within which to collect.

(B) Yes. The BIR has 5 years from the issuance of the final assessment within which to
collect.

(C) No. The taxpayer did not apply for a compromise.

(D) No. Without the taxpayer’s prior authority, the BIR action violated the Bank Deposit
Secrecy Law.

(35) Which among the following taxpayers is required to use only the calendar year for tax
purposes?

(A) Partnership exclusively for the design of government infrastructure projects considered
as practice of civil engineering.

(B) Joint-stock company formed for the purpose of undertaking construction projects.

(C) Business partnership engaged in energy operations under a service contract with the
government.

(D) Joint account (cuentas en participacion) engaged in the trading of mineral ores.

(36) Spanflex Int’l Inc. received a notice of assessment from the BIR. It seasonably filed a protest
with all the necessary supporting documents but the BIR failed to act on the protest. Thirty days from
the lapse of 180 days from the filing of its protest, Spanflex still has not elevated the matter to the
CTA. What remedy, if any, can Spanflex take?

(A) It may file a motion to admit appeal if it could prove that its failure to appeal was due to
the negligence of counsel.

(B) It may no longer appeal since there is no BIR decision from which it could appeal.

(C) It may wait for the final decision of the BIR on his protest and appeal it to the CTA within
30 days from receipt of such decision.

(D) None. Its right to appeal to the CTA has prescribed.

(37) Gerardo died on July 31, 2011. His estate tax return should be filed within
 (A) six months from filing of the notice of death.

(B) sixty days from the appointment of an administrator.

(C) six months from the time he died on July 31, 2011.

(D) sixty days from the time he died on July 31, 2011.

(38) Income from dealings in property (real, personal, or mixed) is the gain or loss derived

(A) only from the cash sales of property.

(B) from cash and gratuitous receipts of property.

(C) from sale and lease of property.

(D) only from the sale of property.