Article 71p. 71

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

advertisement and sale thereof, as well as of real property

and improvements thereon.

SEC. 206. Constructive Distraint of the Property of A

Taxpayer. - To safeguard the interest of the Government,

the Commissioner may place under constructive distraint

the property of a delinquent taxpayer or any taxpayer

who, in his opinion, is retiring from any business subject

to tax, or is intending to leave the Philippines or to

remove his property therefrom or to hide or conceal his

property or to perform any act tending to obstruct the

proceedings for collecting the tax due or which may be

due from him.

The constructive distraint of personal property shall be

affected by requiring the taxpayer or any person having

possession or control of such property to sign a receipt

covering the property distrained and obligate himself to

preserve the same intact and unaltered and not to

dispose of the same ;in any manner whatever, without

the express authority of the Commissioner.

In case the taxpayer or the person having the possession

and control of the property sought to be placed under

constructive distraint refuses or fails to sign the receipt

herein

referred to, the revenue officer effecting the

constructive distraint shall proceed to prepare a list of

such property and, in the presence of two (2) witnesses,

leave a copy thereof in the premises where the property

distrained is located, after which the said property shall

be deemed to have been placed under constructive

distraint.

SEC. 207. Summary Remedies. -

(A) Distraint of Personal Property. - Upon the failure of

the person owing any delinquent tax or delinquent

revenue to pay the same at the time required, the

Commissioner or his duly authorized representative, if the

amount

involved

is

in

excess of One million pesos

(P1,000,000),

or

the

Revenue

District

Officer,

if

the

amount involved is One million pesos (P1,000,000) or less,

shall seize and distraint any goods, chattels or effects, and

the

personal

property,

including

stocks

and

other

securities, debts, credits, bank accounts, and interests in

and

rights to personal property of such persons in

sufficient quantity to satisfy the tax, or charge, together

with any increment thereto incident to delinquency, and

the

expenses

of

the

distraint

and

the

cost of the

subsequent sale.

A report on the distraint shall, within ten (10) days from

receipt of the warrant, be submitted by the distraining

officer to the Revenue District Officer, and to the Revenue

Regional Director: Provided, That the Commissioner or his

duly authorized representative shall, subject to rules and

regulations promulgated by the Secretary of Finance,

upon recommendation of the Commissioner, have the

power to lift such order of distraint: Provided, further, That

a consolidated report by the Revenue Regional Director

may

be

required by the Commissioner as often as

necessary.

(B) Levy on Real Property. - After the expiration of the

time required to pay the delinquent tax or delinquent

revenue as prescribed in this Section, real property may

be

levied

upon,

before

simultaneously

or

after

the

distraint

of

personal

property

belonging

to

the

delinquent. To this end, any internal revenue officer

designated by the Commissioner or his duly authorized

representative

shall

prepare

a

duly

authenticated

certificate showing the name of the taxpayer and the

amounts of the tax and penalty due from him. Said

certificate shall operate with the force of a legal execution

throughout the Philippines.

Levy shall be affected by writing upon said certificate a

description of the property upon which levy is made. At

the same time, written notice of the levy shall be mailed

to or served upon the Register of Deeds for the province

or city where the property is located and upon the

delinquent

taxpayer,

or

if

he

be

absent

from

the

Philippines, to his agent or the manager of the business

in respect to which the liability arose, or if there be none,

to the occupant of the property in question.

In case the warrant of levy on real property is not issued

before or simultaneously with the warrant of distraint on

personal property, and the personal property of the

taxpayer is not sufficient to satisfy his tax delinquency,

the Commissioner or his duly authorized representative

shall,

within

thirty

(30)

days

after execution of the

distraint, proceed with the levy on the taxpayer's real

property.

Within ten (10) days after receipt of the warrant, a report

on any levy shall be submitted by the levying officer to

the Commissioner or his duly authorized representative:

Provided, however, That a consolidated report by the

Revenue

Regional Director may be required by the

Commissioner as often as necessary: Provided, further,

That

the

Commissioner

or

his

duly

authorized

representative,

subject

to

rules

and

regulations

promulgated

by

the

Secretary

of

Finance,

upon

recommendation of the Commissioner, shall have the

authority to lift warrants of levy issued in accordance with

the provisions hereof.

SEC. 208. Procedure for Distraint and Garnishment. -

The officer serving the warrant of distraint shall make or

cause to be made an account of the goods, chattels,

effects or other personal property distrained, a copy of

which, signed by himself, shall be left either with the

owner or person from whose possession such goods,

chattels, or effects or other personal property were taken,

or at the dwelling or place of business of such person and

with someone of suitable age and discretion, to which list

shall be added a statement of the sum demanded and

note of the time and place of sale.

Stocks and other securities shall be distrained by serving

a copy of the warrant of distraint upon the taxpayer and

upon

the

president,

manager,

treasurer

or

other

responsible

officer

of

the

corporation,

company

or

association, which issued the said stocks or securities.

Debts and credits shall be distrained by leaving with the

person owing the debts or having in his possession or

under his control such credits, or with his agent, a copy of

the warrant of distraint. The warrant of distraint shall be

sufficient authority to the person owning the debts or

having in his possession or under his control any credits

belonging to the taxpayer to pay to the Commissioner

the amount of such debts or credits.

Bank accounts shall be garnished by serving a warrant of

garnishment upon the taxpayer and upon the president,

manager, treasurer or other responsible officer of the

bank. Upon receipt of the warrant of garnishment, the

bank shall turn over to the Commissioner so much of the

bank accounts as may be sufficient to satisfy the claim of

the Government.

SEC. 209. Sale of Property Distrained and Disposition of

Proceeds. - The Revenue District Officer or his duly

authorized representative, other than the officer referred

to in Section 208 of this Code shall, according to rules and

regulations prescribed by the Secretary of Finance, upon

recommendation of the Commissioner, forthwith cause a

notification to be exhibited in not less than two (2) public

places in the municipality or city where the distraint is

made, specifying; the time and place of sale and the

articles distrained. The time of sale shall not be less than

twenty (20) days after notice to the owner or possessor of

the property as above specified and the publication or

posting of such notice. One place for the posting of such

notice shall be at the Office of the Mayor of the city or

municipality in which the property is distrained.

At the time and place fixed in such notice, the said

revenue officer shall sell the goods, chattels, or effects, or

other

personal

property,

including stocks and other

securities so distrained, at public auction, to the highest

bidder for cash, or with the approval of the Commissioner,

through duly licensed commodity or stock exchanges.

In the case of Stocks and other securities, the officer

making the sale shall execute a bill of sale which he shall

© Compiled by RGL

71 of 201