2010 Bar Exam Questions in Taxation Law

Posted by Admin | Posted in Bar Exams, Taxation | Posted on 14-09-2010

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PART I

I

True or False.

  1. In civil cases involving the collection of internal revenue taxes, prescription is construed strictly against the government and liberally in favor of the taxpayer. (1%)
  2. In criminal cases involving tax offenses punishable under the National Internal Revenue Code (NIRC), prescription is construed strictly against the government. (1%)
  3. In criminal cases where the Court of Tax Appeals (CTA) has exclusive original jurisdiction, the right to file a separate civil action for the recovery of taxes may be reserved. (1%)
  4. Proceedings before the CTA in the exercise of its exclusive original jurisdiction are in the nature of trial de novo. (1%)
  5. Judgments, resolutions or orders of the Regional Trial Court in the exercise of its original jurisdiction involving criminal offenses arising from violations of the NIRC are appealable to the CTA, which shall hear the cases en banc. (1%)

II

  1. What is the “all events test“? Explain briefly. (2%)
  2. What is the “immediacy test“? Explain briefly. (2%)
  3. What is the “rational basis” test? Explain briefly. (2%)
  4. What is the effect of the execution by a taxpayer of a “waiver of the statute of limitations” on his defense of prescription? (2%)
  5. What is the basis for the computation of business tax on contractors under the Local Government Code? (2%)
  6. How are retiring businesses taxed under the Local Government Code? (2%)

III

Mirador, Inc., a domestic corporation, filed its Annual Income Tax Return for its taxable year 2008 on April 15, 2009. In the Return, it reflected an income tax overpayment of P1,000,000.00 and indicated its choice to carry-over the overpayment as an automatic tax credit against its income tax liabilities in subsequent years.

On April 15, 2010, it filed its Annual Income Tax Return for its taxable year 2009 reflecting a taxable loss and an income tax overpayment for the current year 2009 in the amount of P500,000.00 and its income tax overpayment for the prior year 2008 of P1,000,000.00.

In its 2009 Return, the corporation indicated its option to claim for refund the total income tax overpayment of P1,500,000.00

Choose which of the following statements is correct.

  1. Mirador, Inc. may claim as refund the total income tax overpayment of P1,500,000.00 reflected in its income tax return for its taxable year 2009;
  2. It may claim as refund the amount of P500,000.00 representing its income tax overpayment for its taxable year 2009; or
  3. No amount may be claimed as refund.
    Explain the basis of your answer. (5%) Read the rest of this entry »