The waiver of the statute of limitation executed by a taxpayer is not a waiver of the right to invoke the defense of prescription. The waiver of the…

The question

The waiver of the statute of limitation executed by a taxpayer is not a waiver of the right to invoke the defense of prescription. The waiver of the statute of limitation is merely an agreement in writing between the taxpayer and the CIR that the period to assess and collect taxes due is extended to a date certain. If prescription has already set in at the time of the execution of the waiver or if the said waiver is invalid, the taxpayer can still raise prescription as a defense. Mia, a compensation income earner, filed her income tax return for the taxable year 2007 on March 30, 2008. On May 20, 2011, Mia received an assessment notice and letter of demand covering the taxable year 2007 but the postmark on the envelope shows April 10, 2011. Her return is not a false and fraudulent return. Can Mia raise the defense of prescription? (2011 Bar Question)

1. A.No. The 3 year prescriptive period started to run on April 15, 2008, hence, it has not yet expired on April 10, 2011.
2. B.Yes. The 3 year prescriptive period started to run on April 15, 2008, hence, it had already expired by May 20, 2011.
3. C.No. The prescriptive period started to run on March 30, 2008, hence, the 3 year period expired on April 10, 2011.
4. D.Yes. Since the 3-year prescriptive period started to run on March 30, 2008, it already expired by May 20, 2011.

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