FACTS:

This case involves two separate cases, both concerning the assessment and collection of taxes on the estate of deceased individuals.

In the first case, petitioner Ferdinand R. Marcos II contests the acts of the Commissioner of Internal Revenue in assessing and collecting estate and income tax delinquencies on the estate and properties of his late father, Ferdinand E. Marcos. Petitioner argues that the ongoing probate proceedings of the late president's will preclude the summary tax remedies and that he has the right to question the unlawful manner of tax collection. The Court of Appeals ruled in favor of the Commissioner, stating that the deficiency assessments have become final and unappealable.

In the second case, the Bureau of Internal Revenue assessed estate taxes against the estate of Francisco Sadornas. The BIR sought to collect the taxes through the summary remedy of levying upon and selling the real properties owned by the decedent. The BIR argues that the state's authority to collect internal revenue taxes is paramount and not precluded by the pendency of probate proceedings. They contend that estate and income taxes due and assessed after the decedent's death need not be presented as a claim against the estate but should be paid immediately.

The Supreme Court is tasked with determining the validity of the summary tax remedies in both cases and the authority of the BIR to collect the taxes.

ISSUES:

1. Whether the Bureau of Internal Revenue (BIR) has the authority to collect estate tax deficiencies through summary remedies without the cognition and authority of the court sitting in probate.

2. Whether the probate court has jurisdiction over the determination and collection of estate and income taxes due and assessed after the death of the decedent.

3. The issue in this case is whether or not the Bureau of Internal Revenue (BIR) can proceed with the collection of estate taxes without seeking approval from the probate court.

4. Whether the petitioner's failure to appeal the assessment made by the BIR is fatal to his cause.

5. Whether the pendency of cases involving the late President's ownership or interests in several properties affects the collection of the estate tax.

6. Whether the total assessment made by the BIR is inconsistent with the findings of the Department of Justice's Panel of Prosecutors.

7. Whether or not the notices of levy issued to satisfy delinquent estate tax and income tax delinquency should have been served upon the petitioner as a mandatory heir.

RULING:

1. The BIR has the authority to collect estate tax deficiencies through summary remedies without the cognition and authority of the court sitting in probate.

2. The probate court does not have jurisdiction over the determination and collection of estate and income taxes due and assessed after the death of the decedent.

3. The Supreme Court ruled that seeking approval from the probate court is not a mandatory requirement in the collection of estate taxes. The Tax Bureau did not err in proceeding with the levying and sale of the properties allegedly owned by the late President without seeking the probate court's sanction. There is no provision in the Tax Code or in the pertinent remedial laws that implies the necessity of the probate or estate settlement court's approval. It is actually the probate or settlement court that should not authorize the delivery of any distributive share to any party interested in the estate unless a Certification by the Commissioner of Internal Revenue stating that the estate taxes have been paid is presented. The Supreme Court further emphasized that if there is any issue as to the validity of the BIR's decision to assess the estate taxes, it should have been pursued through proper administrative and judicial avenues provided by law.

4. The petitioner's failure to appeal the assessment made by the BIR is fatal to his cause. Under the law, in case of failure to file a return, the tax may be assessed at any time within ten years after the omission, and any tax so assessed may be collected by levying upon real property within three years following the assessment of the tax. Since the estate tax assessment had become final and unappealable by the petitioner's default as regards protesting the validity of the said assessment, there is no reason why the BIR cannot continue with the collection of the said tax.

5. The pendency of cases involving the late President's ownership or interests in several properties does not affect the enforcement of tax assessments over the properties included in his estate. The mere fact that the decedent has pending cases involving ill-gotten wealth does not affect the enforcement of tax assessments over the properties indubitably included in his estate.

6. The Department of Justice is not the government agency tasked to determine the amount of taxes due upon the subject estate. It is the Bureau of Internal Revenue whose determinations and assessments are presumed correct and made in good faith. The taxpayer has the duty of proving otherwise. In the absence of proof of any irregularities in the performance of official duties, an assessment will not be disturbed. Even an assessment based on estimates is prima facie valid and lawful where it does not appear to have been arrived at arbitrarily or capriciously. The burden of proof is upon the complaining party to show clearly that the assessment is erroneous. Failure to present proof of error in the assessment will justify the judicial affirmance of said assessment.

7. The Supreme Court held that the notices of levy upon properties to satisfy tax delinquencies are not required to be served upon the petitioner as a mandatory heir. The Court emphasized that in the case of notices of levy issued to satisfy delinquent estate tax, the delinquent taxpayer is the Estate of the decedent, and not necessarily the petitioner as the heir. Similarly, in the matter of income tax delinquency of the late president and his spouse, the petitioner is not the taxpayer liable. Thus, the service of notices of levy upon the petitioner is not required by law.

PRINCIPLES:

• The authority of the BIR to collect internal revenue taxes is paramount.

• Claims for payment of estate and income taxes due and assessed after the death of the decedent need not be presented in the form of a claim against the estate and can and should be paid immediately.

• The probate court is not the government agency to decide whether an estate is liable for payment of estate or income taxes.

• The probate court has limited jurisdiction and its authority should not be ignored by the parties invoking it.

• The collection of estate taxes is executive in character and tasked to the BIR.

• Claims for taxes assessed against the estate of a deceased person after administration is opened need not be submitted to the committee on claims in the ordinary course of administration and can be paid upon motion showing that the taxes have been assessed against the estate.

• Taxes assessed against the estate of a deceased person, whether before or after death, can be collected from the heirs even after the distribution of the properties of the decedent and are exempted from the statute of non-claims.

• The government has two ways of collecting taxes from the estate: from all the heirs proportionate to their share in the inheritance, or by subjecting the property of the estate in the hands of an heir or transferee to the payment of the tax due.

• The probate or settlement court's approval is not a mandatory requirement for the collection of estate taxes.

• The probate or settlement court should not authorize the distribution of any share in the estate unless a Certification by the Commissioner of Internal Revenue stating that the estate taxes have been paid is presented.

• Any issue as to the validity of the BIR's assessment should be pursued through proper administrative and judicial avenues provided by law.

• Failure to appeal a tax assessment renders the assessment final and unappealable.

• The pendency of cases involving ill-gotten wealth does not affect the enforcement of tax assessments on properties included in the decedent's estate.

• The taxpayer has the burden of proving the error in a tax assessment.

• An assessment will not be disturbed if there is no proof of irregularities in the performance of official duties.

• Certiorari cannot be used as a substitute for a lost appeal or remedy.

• Sufficient notice of tax assessments may be deemed if they are sent to a place where they would surely be called to the taxpayer's attention and received by responsible persons of sufficient age and discretion.

• Notices of levy upon properties to satisfy tax delinquencies are not required to be served upon a mandatory heir.

• When there is an opportunity to raise objections to government action and such opportunity is disregarded without justifiable reason, the party claiming oppression becomes the oppressor of the orderly functions of government.

• He who comes to court must come with clean hands.