Business Mirror

Atty. Fulvio D. Dawilan discusses the legal basis for extending the deadline for filing annual income tax return.

April 15 Tax Filing Deadline: Extendible?

By: Atty. Fulvio D. Dawilan

For many taxpayers, the deadline for the filing of annual income tax returns is drawing near. That is just a month from now. Corporate taxpayers adopting the calendar year as their taxable year and individuals are required to file their tax returns on or before April 15. Full payment of income taxes due falls on the same date, except individuals who are allowed to pay their taxes on installment.

Amidst the COVID-19 threat and the community quarantine imposed in the national capital region and other local government areas across the country, many hope, and some sectors and organizations have requested, that the April 15 deadline be extended.

We heard and read in the papers and social media that the tax authority has no plans to delay the April 15 deadline for filing of the income tax returns and the payment of the corresponding taxes. Their reason is that the date is set in law. They instead urge taxpayers to file earlier and/or use electronic channels instead to avoid crowds and minimize exposure to the virus. They may also allow amendment of the returns without the payment of interest subject to certain conditions.

But is there no basis for the extension of the deadline? Is it not legally possible for taxpayers to be given reprieve or relief in this challenging time?

The April 15 deadline is indeed provided in the National Internal Revenue Code. The same law, however, allows an exception to that rule. As so provided in the law, the Commissioner may, in meritorious cases, grant reasonable extension of time for the filing of returns.

In fact, in the past, the “meritorious case” exception had been invoked voluntarily by the tax authority to defer the filing of tax returns beyond the prescribed deadline for all taxpayers, without imposing penalties. For instance, the filing of the annual income tax returns covering the period ended December 31, 2000, was extended by the Secretary of Finance at that time, upon the recommendation of the Commissioner, without increments to compensate for the lost time and opportunity of the taxpayers to file income tax returns due to the close of business operations of banks during the Lenten break. Similarly, for the filing of the annual income tax returns for the period ended December 31, 2002, the Department of Finance extended the filing deadline due to perceived systems failure of the Electronic Filing and Payment System of the BIR and for the reduced bank work force due to the fact that the April 15 deadline fell on the Holy week when so many bank employees went on leave.

Other than the filing of annual income tax returns, there were also instances in the past where the BIR allowed the filing of certain tax/information returns for certain areas beyond the deadline without penalties. These situations include bad weather conditions (e.g., RMC Nos. 056-13 and 049-12, 042-12), technical issues related to the implementation of new law (RMC No. 04-09 and 010-09), among others. Recently, with the declaration of Batangas under the state of calamity due to the eruption of Taal volcano, the Commissioner found it proper to suspend the deadlines for the filing of tax returns and payment of taxes in the area until the situations returned to normal. Also, in a number of rulings and using the same “meritorious case” basis, the BIR granted individual requests of taxpayers extensions for the filing their tax returns due to some reasonable reasons.

In short, in proper cases, the Commissioner may allow a reasonable extension for the deadline of filing tax returns and payment of taxes, even if that means going beyond the deadline set in the law.

Needless to say, the circumstances of the time present a meritorious case for extending the deadline for the filing of annual income tax returns. To some extent, the crowding may indeed be avoided by filing ahead of the deadline or availing of the online filing and payment facility (by the way, not all taxpayers are enrolled in that facility). But it is not only the crowding of taxpayers that is sought to be avoided. Our restricted movements and disruption of our daily activities certainly made it difficult, and impossible to some, to comply with our obligations, including observance of set deadlines.

If the basis for the non-extension is merely on the ground that the April 15 is set in the law, there is an exception to that rule. There is no doubt that the extraordinary situation we are in now falls within that exception and calls for the granting of reprieve or relief to taxpayers by allowing them to file their returns and pay their taxes on a later date.