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Elegado V. Cta: Facts

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NOLLIE CALISING
This case involved the estate of an American national, Warren Graham, who owned shares of stock in the Philippines. The Commission of Internal Revenue (CIR) initially assessed estate taxes of P96,509.35 based on a return filed by American lawyers. A second provisional assessment of P72,948.87 was issued based on a return filed by the court-appointed administrator, Ildefonso Elegado. Elegado argued the first assessment was canceled by the second. However, the Supreme Court held that a provisional assessment does not supersede an earlier final assessment. The Court also rejected Elegado's argument that the first assessment was invalid because the foreign lawyers filing the initial return

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238 views1 page

Elegado V. Cta: Facts

Uploaded by

NOLLIE CALISING
This case involved the estate of an American national, Warren Graham, who owned shares of stock in the Philippines. The Commission of Internal Revenue (CIR) initially assessed estate taxes of P96,509.35 based on a return filed by American lawyers. A second provisional assessment of P72,948.87 was issued based on a return filed by the court-appointed administrator, Ildefonso Elegado. Elegado argued the first assessment was canceled by the second. However, the Supreme Court held that a provisional assessment does not supersede an earlier final assessment. The Court also rejected Elegado's argument that the first assessment was invalid because the foreign lawyers filing the initial return

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© All Rights Reserved
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ELEGADO V.

CTA
G.R. No. L-68385
May 12, 1989

FACTS:
In March 1976, Warren Graham, an American national and a former resident of the Philippines, died in
Oregon, USA. As certain shares of stock are left in the Philippines, his son Ward Graham filed an estate
tax return. On the basis of such return, the Commission of Internal Revenue (CIR) assessed the
descendant’s estate in the amount of P96,509.35. The assessment was protested by the law firm of
Bump, Yang, and Walker on behalf of the estate which was denied by the CIR.

Meanwhile, Ildefonso Elegado was the appointed administrator for the properties left by Graham in the
Philippines. Pending the resolution by the CIR on the protest filed by the American law firm, he filed a
second estate tax return which was provisionally assessed by the CIR the amount of P72,948.87.

Meanwhile still, in the probate proceedings filed in the Philippines for the properties of Warren Graham,
the CIR filed a motion for the allowance of the original estate tax assessed at P96,509.35. The CIR said
that this liability had not yet been paid although the assessment had long become final and executory.
Elegado contends that the issuance of the second assessment on July 3, 1980, had the effect of
canceling the first assessment of February 9, 1978, and that the subsequent cancellation of the second
assessment did not have the effect of automatically reviving the first. Further, he argued that the first
assessment was not binding on him because it was based on a return filed for by foreign lawyers who do
not have knowledge of our tax laws.

ISSUE:

Whether or not Elegado is correct.

HELD:

No. The Supreme Court held that Elegado’s contention is flimsy.

It was noted that the Commissioner made it clear that the second assessment was considered
provisional only based on the estate tax return filed subject to investigation by this Office for final
determination of the correct estate tax due from the estate. Any amount that may be found due after
said investigation would be later assessed and collected. The Court stressed that it is illogical to suggest
that a provisional assessment can supersede an earlier assessment which had clearly become final and
executory.

Elegado cannot be serious when he argues that the first assessment was invalid because the foreign
lawyers who filed the return on which it was based were not familiar with our tax laws and procedure.
Our lawyers and taxpayers cannot avoid paying tax assessments by simply saying that they do not know
our tax laws. If our own lawyers and taxpayers cannot claim similar preferences, it follows that
foreigners cannot be any less bound by laws in our country.

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