(10%)
Remedios, a resident citizen, died on November 10, 2006. She died leaving three condominium units in Quezon City valued at P5 Million each. Rodolfo was her only heir.
He reported her death on December 5, 2006 and filed the estate tax return on March 30, 2007. Because he needed to sell one unit of the condominium to pay for the estate tax, he asked the Commissioner of Internal Revenue to give him one year to pay the estate tax due. The Commissioner approved the request for extension of time provided that the estate tax be computed on the basis of the value of the property at the time of payment of the tax.
a) Does the Commissioner of Internal Revenue have the power to extend the payment of estate tax? If so, what are the requirements to allow such extension?
b) Does the condition that the basis of the estate tax will be the value at the time of the payment have legal basis? Reason briefly.
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XII.
a.
The Commissioner of Internal Revenue has the power to extend the payment of estate tax. The requirements to allow such extension are as follows:
1. The Commissioner finds that the payment on the due date of the estate tax would impose undue hardship upon the estate or any of the heirs;
2. Such extension should not exceed five years in case the estate is settled through the court, or two years in case the estate is settled extrajudicially.
b.
The condition that the basis of the estate tax will be the value at the time of payment has no legal basis. The value of the estate is determined at the time of the death of the decedent, not at the time of the payment of the tax. Moreover, such condition will most likely defeat the purpose of the grant of the extension.
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