The BIR, through the Commissioner, instituted a system requiring taxpayers to submit to the BIR a summary list of their sales and purchases during…

The question

The BIR, through the Commissioner, instituted a system requiring taxpayers to submit to the BIR a summary list of their sales and purchases during the year, indicating the name of the seller or the buyer and the amount. Based on these lists, the BIR discovered that in 2004 ABC Corp. purchased from XYZ Corp. goods worthP5,000,000. XYZ Corp. did not declare these for income tax purposes as its reported gross sales for 2004was only Pl,000,000. Which of the following defenses may XYZ Corp. interpose in an assessment against it by the BIR? (2013 Bar Question)

1. A.The BIR has no authority to obtain third party information to assess taxpayers.
2. B.The third party information is inadmissible as hearsay evidence.
3. C.The system of requiring taxpayers to submit third party information is illegal for violating the right to privacy.
4. D.None of the above.

This question has not been answered yet.