2013 (Taxation) Bar Exam Questions: Essay Question 10

[Discuss/answer the question below. Or see Taxation Instructions; Taxation Essay Questions: 12, 3, 4, 5, 6, 7, 8, 911 and 12; Taxation Multiple Choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 and 20; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]


In 2010, pursuant to a Letter of Authority (LA) issued by the Regional Director, Mr. Abcede was assessed deficiency income taxes by the BIR for the year 2009. He paid the deficiency.

In 2011, Mr. Abcede received another LA for the same year 2009, this time from the National Investigation Division, on the ground that Mr. Abcede’s 2009 return was fraudulent.

Mr. Abcede contested the LA on the ground that he can only be investigated once in a taxable year. Decide. (7%)


  1. According to the BIR site:


    8. How many times can a taxpayer be subjected to examination and inspection for the same taxable year?

    A taxpayer’s books of accounts shall be subjected to examination and inspection only once for a taxable year, except in the following cases:

    When the Commissioner determines that fraud, irregularities, or mistakes were committed by Taxpayer;

    When the Taxpayer himself requests a re-investigation or re-examination of his books of accounts;

    When there is a need to verify the Taxpayer’s compliance with withholding and other internal revenue taxes as prescribed in a Revenue Memorandum Order issued by the Commissioner of Internal Revenue.

    When the Taxpayer’s capital gains tax liabilities must be verified; and

    When the Commissioner chooses to exercise his power to obtain information relative to the examination of other Taxpayers (Secs. 5 and 235, NIRC).

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