G.R. No. 120880 June 5, 1997
FERDINAND R. MARCOS II, petitioner, vs. COURT OF APPEALS, THE COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE and HERMINIA D. DE GUZMAN, respondents.

FACTS

After the death of former President Ferdinand E. Marcos on September 29, 1989, a Special Tax Audit Team was created to investigate his tax liabilities. The audit concluded that the Marcoses failed to file an estate tax return and several income tax returns. On July 26, 1991, the Bureau of Internal Revenue (BIR) issued deficiency tax assessments: an estate tax assessment against the estate of the late president, deficiency income tax assessments against the Spouses Marcos for 1985 and 1986, and deficiency income tax assessments against petitioner Ferdinand “Bongbong” Marcos II for 1982 to 1985. Copies of these assessments were personally and constructively served on Mrs. Imelda Marcos and the petitioner in August and September 1991. The assessments were not protested administratively within 30 days. Subsequently, the BIR Commissioner issued numerous Notices of Levy on real property against parcels of land owned by the Marcoses on February 22, 1993, May 20, 1993, and May 26, 1993, to satisfy the alleged tax delinquencies. Notices of sale at public auction were posted, and a sale was held on July 5, 1993, where properties were forfeited in favor of the government due to lack of bidders. Petitioner filed a petition for certiorari and prohibition with the Court of Appeals, seeking to annul the Notices of Levy and Sale and to enjoin the auction, arguing that the summary tax remedies were improper due to the pendency of the probate proceedings for the late president’s will (Sp. Proc. No. 10279) and that the collection methods were unlawful. The Court of Appeals dismissed the petition, ruling the tax assessments were final and unappealable and the levy was a proper summary remedy.

ISSUE

Whether the Court of Appeals erred in ruling that the summary tax remedies (levy and sale) resorted to by the BIR were not affected by the pendency of the probate proceedings and that the tax assessments had become final and unappealable, thereby dismissing the petition to annul the said remedies.

RULING

The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals. The Court ruled that the pendency of probate proceedings does not preclude the assessment and collection of estate taxes by the BIR. The authority of the BIR to collect estate taxes is paramount and is exercised independently of the judicial settlement of the estate. The probate court’s jurisdiction is limited to the settlement and distribution of the estate, while the BIR’s power to assess and collect taxes is administrative and summary in nature. The Court also held that the deficiency tax assessments had become final, executory, and demandable due to the failure of the taxpayer to protest them within the 30-day period prescribed by law. The Notices of Levy and subsequent sale were valid enforcement actions for the collection of these final taxes. The Court further found that the petitioner was not denied due process, as copies of the assessments and levy notices were served upon him and his counsel, providing an opportunity to contest them, which he disregarded. The issuance of the Notices of Levy was not premature, as the estate tax is due upon the death of the decedent and the assessment was based on the estate tax return filed by the BIR itself, given the heirs’ failure to file one. The Court emphasized that taxes are the lifeblood of the government and their collection should not be hindered by unnecessary delays.