Practice question
A2026 business expense is ordinary, necessary and fully substantiated, and all other current deduction requirements are met. The payor failed to withhold a tax otherwise due on the payment. An examiner relies solely on repealed old Section34(K) to deny the expense deduction. Which answer follows EOPT and RMC60-2024?
- The failure alone does not support that repealed-condition denial, while corresponding withholding liability remains
- Every failure automatically denies deduction under the repealed rule forever
- Repeal exempts the payor from all withholding liability
- Every expense becomes deductible without proof
- The payment must instead be treated as a tax credit of identical amount
Legal references
- RA11976 Ease of Paying Taxes Act: https://lawphil.net/statutes/repacts/ra2024/ra_11976_2024.html Section5.
- BIR RMC60-2024, repeal of old Section34(K): https://bir-cdn.bir.gov.ph/BIR/pdf/RMC%20No.%2060-2024.pdf Current-period deduction allowance and continuing withholding liability.
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