Open cases (BIR)

Open cases — BIR’s flags for returns a taxpayer should have filed but didn’t; each missed VAT, percentage-tax, withholding, or income-tax return accumulates with a 25% surcharge, 12% annual interest, and compromise penalties. A small business that “didn’t really file during COVID” can carry six figures of accrued liability invisible to any balance sheet. Diligence demands the seller’s own RDO verification of open cases plus three years of stamped returns — and his refusal is itself the finding. Tax liabilities follow the taxpayer entity: buy the shares, buy the cases.

First used in: 4.3 · PH due diligence: acquisition II