QUESTION 12 MCQ BAR EXAM TAXATION 2012

12.
During the audit conducted by the BIR official, it was found that the
rental income claimed by the corporation was not subjected to
expanded withholding tax. Accordingly, the claimed rental expense:
a)
Is deductible from the gross income of the corporation,
despite non-withholding of income tax by the corporation;

b)
Is deductible from the gross income of the corporation,
provided that the 5°/o expanded withholding tax is paid by
the corporation during the audit;

c) Is not deductible from gross income of the corporation
due to non-withholding of tax;
d) Is deductible, if it can be shown that the lessor has
correctly. reported the rental income in his tax return.

ITONG QUESTION 12 NA ITO is a little bit unfair sa mga walang idea sa tax practice at wala pang experience sa tax audit. MINSAN NGA, ang BIR EXAMINER lang at iyong na audit na taxpyer lang na nakaka experience na nadisallowance ang kanilang expenses (like rental expenses) during the audit ang nakaka alam nito.

ang sagot nito is makikita natin sa Revenue Regulation 2-98 particularly sa section 2.58.5.

ganito ang nakasulat.

Section 2.58.5 (RR 2-98 as amended)- Requirements for deductibility
Any income payment (expense ito kasi payment e) which is otherwise deductible under the Code shall be allowed as a deduction from the payor's gross income (payor is kung sino ang nagbayad ng expense, ma deduct lang daw ang expense sa gross income ng payor if ) ONLY IF IS SHOWN that the income tax required to be withheld has been paid to the BIR in accordance with SEction 57 and Section 58 of the Code. (meaning, madeduct lang ang expense mo like rental expense sa gross income mo if me withholding ka ginawa sa rental expense mo ).

A deduction will also be allowed in the following cases where no withholding of tax was made:

1. the payee (income recipient or iyong nakareceive ng rental income if rent) reported the income and pays the tax due thereon

****and the withholding agent pays the tax, including the interest incident to the failure to withhold the tax, and surcharges, if applicable , at the time of audit, investigation/reconsideration

(please take note of the twin condition rule sa 1st instance)

2. the payee failed to report the income due on the due date thereof
*** but the withholding agent pays the tax, including the interest xxx and surcharges, if applicable at the time of audit xxxxxxx.
(take note din. wala nareport ang payee sa income (rental income) sa kanyang income tax return pero si withholding agent or iyong nagbayad, nakabayad sya ng withholding tax due during the audit)

**KAYA ANG BOTTOM LINE DITO IS nareport man ni PAYEE (INCOME RECIPIENT) OR HINDI SA INCOME TAX RETURN ANG RENTAL INCOME, BASTA BINIYARAN LANG NI PAYOR (ANG KANYANG KASALANAN SA PAG HINDI NIYA PAG DEDUCT NG WITHHOLDING TAX SA RENTAL EXPENSE NIYA BAGO NIYA BINAYARAN SI PAYEE) NIYA ANG WITHHOLDING TAX DURING THE AUDIT, ANG RENTAL EXPENSE, MACLAIM NIYA ANG RENTAL EXPENSE AS A DEDUCTION SA INCOME TAX RETURN NIYA.


3. the withholding agent erroneously underwithheld the tax, but pays the difference between the correct amount and the amount of tax withheld, including the interest , incident to such error, and surcharges, if applicable, at the time of audit xxxxxxxxxxxx. ( ANG KULANG NIYA NA WITHHOLDING TAX NA NABAYARAN, BINIYARAN NIYA ANG KULANG TAPOS INTEREST, SURCHARGE, ETC.)

12.
During the audit conducted by the BIR official, it was found that the
rental income claimed by the corporation was not subjected to
expanded withholding tax. Accordingly, the claimed rental expense:
a)
Is deductible from the gross income of the corporation,
despite non-withholding of income tax by the corporation - DEFINITELY MALI ITO. HINDI MACLAIM ANG RENTAL PAYMENTS AS EXPENSES NI PAYOR KASI :
1.hindi sya nagwithhold noon
2. at walang sinabi na biniyaran niya ang withholding tax due, plus interest at increments during the audit.
so mali ang statement a.

b)
Is deductible from the gross income of the corporation,
provided that the 5°/o expanded withholding tax is paid by
the corporation during the audit;
** definitely mali ito. kasi ang sinabi ng law, dapat pati interest, surcharges if applicable biniyaran din. hindi lang ang basic expanded withholding tax. ANG LUPIT ng tanong at saka answer choices. kung hindi mo alam ang RR 2-98 section 2.58.5, hindi mo masagot ito.

c) Is not deductible from gross income of the corporation
due to non-withholding of tax;

ito ang tamang sagot. ang statement c. kasi di madeduct ang rental expenses sa gross income if walang withholding tax na 5% sa rental noon.
ito ang legal basis.
Section 2.58.5 (RR 2-98 as amended)- Requirements for deductibility
Any income payment (expense ito kasi payment e) which is otherwise deductible under the Code shall be allowed as a deduction from the payor's gross income (payor is kung sino ang nagbayad ng expense, ma deduct lang daw ang expense sa gross income ng payor if ) ONLY IF IS SHOWN that the income tax required to be withheld has been paid to the BIR in accordance with SEction 57 and Section 58 of the Code. (meaning, madeduct lang ang expense mo like rental expense sa gross income mo if me withholding ka ginawa sa rental expense mo

d) Is deductible, if it can be shown that the lessor has
correctly. reported the rental income in his tax return.
** mali ito. kasi kahit mareport ng lessor ang rental income niya, dapat mashow din na biniyaran din ni lessee or payor (iyong nagbayad ng rental expenses) ang withholding tax during the audit. kaya mali itong statement d kasi walang statement na nagbayad din si lessee ng withholding tax during the audit.[u][u]

KAYA medyo mahirap itong tanong na ito sa mga wala pang experience nito. kasi wala ito sa tax code (NIRC).