I WAS SHOCKED TO LEARN BIR CHARGED ME FOR OPEN CASES EVEN IF I TOTALLY STOPPED DOING BUSINESS!

Open cases are BIR returns or tax forms a COR holder failed or forgot to file thru the online eBIR app. They could be monthly, quarterly, or annually depending on the taxes indicated on the COR (Certificate of Registration) issued by BIR during application for registration. In the system of BIR, unless a business closure has been filed, COR remains registered even if the business or practice of profession stopped.

To date, the penalty for tax forms that were not filed (open cases) is P1,000 per tax form. If you stopped doing business or practice of your profession and did not file an actual closure with BIR, you are pretty much incurring liability thru the years on penalties, interest, and charges.

Say, you're a professional rendering your services. At the start of the year, you registered with BIR and got your COR as a professional. Beginning on the 2nd year until the end of 3rd year, you paused offering your services indefinitely and did not file a closure nor file regular tax forms online even at zero transactions.

If your COR tells you to file a quarterly and annual tax returns, you can still file your BIR returns even at zero revenues and zero tax payments during your dormant years or file a closure. If not, let's compute how much you owe BIR for the unfiled tax forms: Year two - 4 taxes not filed, Year three - 4 taxes not filed. Total tax forms not filed equals 8 returns x P1,000 each.

You incurred P8,000 penalty for ignorance on tax filing or closing. In addition to open cases penalty, there are also interest and charges that are accumulating on any unpaid taxes. Let's forward our scenario to 10 years until you realized you got open cases! Your penalty? 4 tax forms X P1,000 each X 10 years equals P40,000 liability to BIR not including any interest and charges on unpaid taxes which could be bigger than that amount!

After sometime, you decided to start a new business or is selling your car, you go to BIR to file a business COR or pay tax on proceeds of car sale. SURPRISE! You can't proceed until you settle your open cases! Hurrah! What a beautiful life!

Let say your paused business had formerly employed workers and was renting an office space, that means more taxes should have been filed on a monthly basis on top of the quarterly and annual ones. Remember? P1,000 per tax form on each open case! Do the computation yourself, this time on the monthly, quarterly, and annually. Life is a good life isn't it!

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