WEEKLY TAX UPDATES [April 21, 2026]

In a Notice dated April 14, 2026, the SEC has extended the temporary use of 2020 General Information Sheet (GIS) Form for filing through the Electronic Filing and Submission Tool (eFAST) until May 15, 2026. This is to give way to corporations that are still in the process of setting up their eSECURE accounts, which provide entry to the Hierarchical and Applicable Relations and Beneficial Ownership Registry (HARBOR), an online system for the submission of beneficial ownership information.

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[NON-REVALIDATION OF THE LETTER OF AUTHORITY (LOA) DOES NOT INVALIDATE THE LOA OR THE RESULTING ASSESSMENT] [THE LOA IS REQUIRED TO INDICATE THE BASIS OF THE AUDIT, NOT THE SELECTION CRITERIA] [SUCCESSIVE AUDITS OF CONSECUTIVE TAXABLE YEARS DO NOT VIOLATE DUE PROCESS]

The Petitioner, Joyland Industries Corporation filed a Petition for Review assailing the deficiency Value-Added Tax (VAT) assessment for taxable year 2019 issued by the Respondent Commissioner of Internal Revenue (CIR). The Petitioner argued that the Letters of Authority (LOAs) authorizing the audit became unenforceable because the audit exceeded the prescribed periods without revalidation, rendering the entire assessments void, that the LOAs were void for failure to indicate the specific selection criteria for audit violating due process, and that being subjected to audits for consecutive taxable years constituted harassment and a violation of due process. On the other hand, the Respondent countered that under RMO No. 44-2010 and 19-2015, failure to revalidate an LOA does not invalidate the audit but only exposes Revenue Officers to administrative sanctions, that only the basis of the audit, not the internal selection criteria, is required to be stated in the LOA, and that each taxable year is a separate period, and consecutive audits  are allowed within the prescriptive period, especially for high-risk taxpayers. In ruling, the Court held that the LOAs remained valid despite non-revalidation as clarified under Revenue Memorandum Order (RMO) No. 44-2010 and 19-2015. Further, the Court held that under RMO No. 44-2010, only the basis of the audit, and not the selection criteria is required to be indicated in the LOA.  Finally, successive audits for consecutive years do not violate due process, reiterating that each taxable year is a separate and distinct period for tax purposes and the CIR is empowered to verify compliance for any year within the prescriptive period. Thus, the Petition is PARTIALLY GRANTED, cancelling the compromise penalty, but upholding the validity of the assessment for deficiency VAT. [JOYLAND INDUSTRIES CORPORATION VS THE COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 11269, APRIL 15, 2026]

FAILURE TO PROVIDE A VALID & DEFINITE DUE DATE FOR PAYMENT RENDERS THE ASSESSMENT VOID FOR VIOLATION OF TAXPAYERS’ RIGHT TO DUE PROCESS

Petitioner Eastern Petroleum Corporation filed a Petition for Review seeking the cancellation of the assessment issued by the Respondent Commissioner of Internal Revenue (CIR) covering the taxable year (TY) 2014. The Petitioner argues that the Final Assessment Notice (FAN) does not provide a definite due date for payment, rendering the assessment void for violating its right to due process, and that even if due process was not violated, the assessment remains invalid for lacking sufficient factual and legal bases. On the other hand, the Respondent asserts that the deficiency assessment is correct, valid, and lawful. In ruling, the Court held that the Formal Letter of Demand (FLD)/FAN and Final Decision on Disputed Assessment (FDDA) are void for violating Petitioner’s right to due process because they failed to provide a valid and definite due date for payment, as the stated due date of September 30, 2019, had already lapsed prior to the issuance of the assessment notices dated on October 22, 2019. The Court emphasized that a valid assessment must contain a definite and fixed tax liability and a demand for payment within a prescribed period, which were absent in this case, rendering the amounts indefinite and the demand ineffective. Additionally, the Petitioner was likewise not liable for the compromise penalties, which cannot be imposed without the taxpayer’s consent. Consequently, the Petition is GRANTED, and the assessment notices are CANCELLED and SET ASIDE. [EASTERN PETROLEUM CORPORATION VS COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10342, MARCH 18, 2026]