Tax Updates January 2026 (SyCipLaw Tax Issues And Practical Solutions (T.I.P.S.) Vol. 42)

1. May the Court of Tax Appeals suspend tax collection proceedings when the summary remedy of distraint and/or levy was commenced even before the assessment became final and executory?

Yes. In Commissioner of Internal Revenue and LT Collection Enforcement Agency v. Court of Tax Appeals (Second Division) and American Wire & Cable Co., Inc., G.R. No. 280165, August 4, 2025, the Supreme Court (“SC”) ruled that the Court of Tax Appeals (“CTA”) acted within its authority in suspending the collection of deficiency taxes where the assessment had not yet become final and executory ? explaining that the premature collection would prejudice the taxpayer?s right to judicial appeal.

On February 26, 2024, American Wire & Cable Co., Inc. (?American Wire?) received a Final Decision on Disputed Assessment (“FDDA”) for alleged deficiency value-added tax. Before the lapse of the 30-day period to appeal the assessment to the CTA, the Commissioner of Internal Revenue (“CIR”) issued a Warrant of