Case a Report (Write-Up)

7/26/2019 Case a Report (Write-Up)

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Agustin, Judi S, 3:00-6:00De Jesus, Fe April 2,2016

Jimena, Pam IV-BSBA

Commissioner of Internal Revenue vs. Court of Appeal andCastaneda

!rite-"p #$r %ep$rt $n &ase A

I' Fa(ts

)#ren &astaneda retired #r$m g$*ernment ser*i(e as %e*enueAtta(+ in t+e P+ilippine )mass., /$nd$n, )ngland' "p$nretirement, +e re(ei*ed enets su(+ as t+e terminal lea*e pa.' +e&$mmissi$ner $# Internal %e*enue it++eld P12, 4 allegedl.representing t+at it as ta5 in($me' &astaneda led #$r a re#und,($ntending t+at t+e (as+ eui*alent $# +is terminal lea*e is e5empt

#r$m in($me ta5'

II' Issue

+e issue is +et+er $r n$t terminal lea*e pa. re(ei*ed . ag$*ernment $7(ial $r empl$.ee $n t+e $((asi$n $# +is ($mpuls$r.retirement #r$m t+e g$*ernment ser*i(e is su8e(t t$ it++$lding9in($me ta5'

III' ;eld

+e S$li(it$r ati$nal Internal %e*enue &$de:". . It (terminal leave pay) cannot be viewed as salary for purposeswhich would reduce it. . . . there can thus be no commutation ofsalary when a government retiree applies for terminal leave-because he is not receiving it as salary. What he applies for is acommutation of leave credits. It is an accumulation of creditsintended for old age or separation from service...."

+e &$urt $# a5 Appeals ruled in #a*$r $# &astaneda and$rdered t+e re#und +ile t+e &$urt $# Appeals a7rmed de(isi$n $#&A'

+e &$urt +as alread. ruled t+at t+e terminal lea*e pa. re(ei*ed .a g$*ernment $7(ial $r empl$.ee is n$t su8e(t t$ it++$lding9in($me ta5'


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". . . commutation of leave credits more commonly !nown asterminal leave is applied for by an ocer or employee who retiresresigns or is separated from the service through no fault of his own.(#anual on $eave %dministration &ourse for 'ectiveness publishedby the &ivil ervice &ommission pages *+-*,). In the eercise ofsound personnel policy the overnment encourages unused leaves

to be accumulated. /he overnment recogni0es that for mostpublic servants retirement pay is always less than generous if notmeager and scrimpy. % modest nest egg which the senior citi0enmay loo! forward to is thus avoided. /erminal leave payments aregiven not only at the same time but also for the same policyconsiderations governing retirement bene1ts."

A&&?%DI>


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But it reuires t$ ($nditi$ns e#$re separati$n enets aregranted ta5 e5empti$n, namel.:

1' +e $7(ial $r empl$.ee is separated #r$m ser*i(e $# t+eempl$.er due t$ deat+, si(ness $r $t+er p+.si(al disailit., $r#$r an. (ause e.$nd t+e ($ntr$l $# t+e said $7(ial $r

empl$.ee and

2' +e $7(ial $r empl$.ee $r +is +eirs re(ei*e an. am$unt #r$mt+e empl$.er $n a(($unt $# su(+ separati$n'

?n se*eral $((asi$ns, t+e Bureau $# Internal %e*enue9BI% +eld t+at an. and all am$unts re(ei*ed . empl$.ees as a($nseuen(e $# separati$n #r$m empl$.ment #$r an. (ausese.$nd t+e ($ntr$l $# t+e said empl$.ee are e5empt #r$min($me ta5 and, ($nseuentl., #r$m it++$lding ta5 $n($mpensati$n' +is e5empti$n in(ludes t+e ($mmutati$n $#unused lea*e (redits due t$ in*$luntar. separati$n #r$m

empl$.ment, m$re p$pularl. n$n as Eterminal lea*e pa.,Eregardless $# t+e numer $# da.s'

In BI% %uling >$' 1CC-2011, dated last Jul. 2C, t+e ureauruled t+at ($mmutati$n and pa.ment $# m$netied unused*a(ati$n lea*e (redits as a result $# in*$luntar. separati$n $#empl$.ees #r$m ser*i(e is n$t su8e(t t$ in($me ta5, and($nseuentl. t$ it++$lding ta5 $n ($mpensati$n, ut $nl. #$rup t$ da.s $# *a(ati$n lea*e' ;en(e, (as+ eui*alent $# *a(ati$nlea*e (redits in e5(ess $# 10 da.s is su8e(t t$ ta5'


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S$ur(es:+ttp:GGt+epin$.(i*ilser*ant'($mG201HG0CG12Gterminal-lea*e-enetG+ttp:GG'(+anr$les'($mGlegal6nati$nalinternalre*enue($de$#1CC4'+tml'Vs4F2@-(

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Case a Report (Write-Up)