Civil Law

Ildefonso Elegado vs Court of Tax Appeals

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G.R. No. L-68385 – 173 SCRA 285 (255 Phil. 271) – Civil Law – Preliminary Title –¬†Applicability of Laws

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 first assessment is 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. 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.

Ignorance of the law excuses no one (Ignorantia legis non excusat).

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