BIR Open Case: What is This and How Do You Settle It

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Having a BIR open case in your name sounds ominous. But what is it? According to expert tax services in Manila, an open case is a BIR letter that is usually sent to business owners to inform them that they have failed to file the required tax returns for their type of business or business structure.

If you have been in the business world for 2 to 3 years, then you may be familiar with this issue or may have even received a letter like this. Open cases are cases created by the system. It takes place when a taxpayer is not able to file a tax return for a particular period for tax filing. It could be either monthly, quarterly, or annually.

What are the causes of BIR open cases?

Failing to file your tax returns within the deadline is one of the reasons why BIR’s Integrated System will generate open cases automatically. It can also generate an open case if a system error occurs. For example, if an authorized representative already filed the tax returns but for some reason, it did not reach the data warehouse.

What are your obligations as a taxpayer?

As a business owner, part of your obligation is to ensure that your business is registered with the BIR. This is a crucial part since it is a way of formalizing and legalizing your business operations. If you run your business unregistered, you could get penalized by BIR. They can even file a case against you for practicing trade illegally because you violate section 258 of the NIRC or the National Internal Revenue Code which is also related to section 236.

Once you become a registered taxpayer, BIR will give you a copy of your COR or Certificate of Registration. The tax type, and how often you will file and pay your tax returns are all enumerated in your COR. You are expected to comply with all your tax obligations, including filing your tax return and paying them on time. Even if you don’t have any tax dues, you still need to make sure you file your tax return on time. Tax and audit services in the Philippines affirm that failing to file your tax return and paying your tax due on time will make you susceptible to an open case in BIR’s system. Compliance is the only way to avoid an open case. 

How do you settle a BIR open case?

The only way to settle a BIR open case is to file your tax returns and make sure to pay your tax dues and other online fees and charges. You may file the applicable tax returns online and pay tax dues as well. This also includes paying any penalties and surcharges imposed by the system, so there’s no excuse to be remiss.

If the open case was caused by an error in BIR’s system, you may send a reply through a letter to BIR expressing that you have already filed your tax return and also attached a photocopy of your document. If you have not incurred any open case, you can request for a certificate of no open case for a fee of 100 PHP and an additional 30 PHP for the Documentary Stamp.

How important is the Certificate of No Open Case?

Many accounting services in the Philippines like to dub this certificate as your last line of defense. If ever BIR will tag you for an open case, you can show your certificate of no open case as proof that you are a proper taxpayer.

This BIR certificate will also be very helpful in finding your duly acknowledged tax return for a taxable period of a long time ago. Additionally, having an authorized person to file and pay your BIR taxes, the certificate will serve as evidence that you file and pay your tax accordingly.

Don’t forget to file your taxes promptly!

Aside from filing your tax returns on time, you also need to pay other corresponding taxes if there are any. Once you miss the deadline for your tax return filing, BIR’s system will create an open case and if this happens, you should file the tax return and pay your taxes to close the case as soon as possible. Be tax compliant and make sure you fulfill your obligations and duties as a citizen. If you need assistance, don’t hesitate to reach out to our team. We offer accounting services in Pasig and beyond for both domestic and international clients.