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For the nth time, I am not this year’s examiner in Taxation!

(Article published in TODAY, Business Section)  

People must think I am crazy.  Again and again, someone comes to me asking whether the rumor is true, that I am the examiner for Taxation in the second day of the 2004 bar examinations this coming Sunday.   No! No! No!  I am not the examiner for Taxation for the 2004 Bar Exams. 

I have not yet recovered from the ordeal of correcting the test booklets of the 2003 bar exams, coming as it did after only a year of respite from an earlier, but just as arduous,  stint as the examiner for the same subject in 2001.  I continue to wake up with a cold sweat every now and then from nightmares of those endless hours, of early dawn and late night, reading the same answers over and over again, day in and day out, in various forms of tortured English, put on paper by the most illegible hands.

To make everyone believe that I am not the taxation examiner, here are some tips I am giving, gratis et amore, to this year’s examinees as well as to the real examiner.  My tips for the examinees are not on what questions will be asked (that is for the current pre-week reviewers to guess, or more precisely, invent) but, instead, on how to answer the questions in Taxation, and, if it is not yet too late, in other subjects as well.  My tips for the examiner, if this is his or her first time, relate to what the examinees may or may not come up with, regardless of how easy or difficult the questions might be.

First, tips for the examinees.

Tip No. 1. Your answer must give what is asked for by the question.  If the question asks “why” or “explain”, do not, as some examinees did last year, begin your answer with “yes”, or “no”.  For example, the very first question last year was “why is the power to tax considered inherent in a sovereign state?”  Imagine the kind of, literally, first impression that was given by this answer: “Yes. Inherent to the powers vested upon a sovereign state is the power to tax.

Tip No. 2. Your answer must be consistent.  Question II last year was “May Congress, under the 1987 Constitution, abolish the power to tax of local governments?”.  An  examinee replied: “Yes, the enactment as well as abolishment of tax statutes is vested in the legislature or the Congress; but no, the Congress do not have the power to abolish the taxing power of local governments.”  In Question XII, I asked whether a certain local ordinance was valid, an answer was, “Two things.  It is valid and unconstitutional.  When in Question III, I asked who was legally liable for the fringe benefits tax, an examinee said: “The employee is the only (sic) liable.  Alternative: Employer is held liable.”  To Question V, of whether actual, moral, and costs awarded by the court to a plaintiff was taxable income, an answer was “No, all the awards cannot be considered as income on the part of X, hence, taxable”.  The question of whether stocks dividends are subject to the income tax (Question VII), seems to have a bewitching effect on examinees. An examinee said, “Yes.  The stock dividends received by X are not subject to income tax.  They are part of the gross income.  Another answered, “No. stock dividends are not subject to income tax itself.  What is subject to income tax is the dividend issued by the corporation to its stockholders.  Reading these responses at 4:00 a.m., I was tempted to wake the neighborhood with a curdling primal scream.

Tip No. 3. Hide your ignorance.  If you can, try instead to convince the examiner that you know the subject matter fairly well.  Dead give-away that you are not ready to be a lawyer are the following answers to the question of whether contributions to the political  campaign of a candidate is subject to tax: (a) “the amount of P150,000 given to Y is not subject to donor’s tax but rather be subject to a gift tax.”; (b) “if X ask me I tell him that it is not a donors tax, it is a gift tax because donor’s tax is something while gift tax is thing”. Also very revealing of the examinees knowledge is this response to the question of to whom a taxpayer may bring an appeal against a local tax ordinance (Queestion XIV): “He can appeal to the Secretary of Appeals.”  An examiner almost impressed me that he knew all the exceptions to the bank secrecy law, but blew it when, perhaps because he forgot the last one of several items, wrote “among others.”  And I was impressed more by the examinee’s imagination than his knowledge of taxation, when he wrote, distinguishing capital from ordinary assets as follows: “Capital assets are those that are solid properties, while ordinary assets are those that are liquidated assets.”

Tip No. 4.  Avoid big words or latin phrases if you do not know exactly what they mean.  For example, “the action sought by the taxpayer is one that may be sue generis, that is, a taxpayer’s suit.”  In the first place, the proper latin term is “sui generies”.  Secondly, it means “one of a kind” or more literally, “a class by itself”.  Certainly not, “taxpayer’s suit.”  Another example, “The power to tax is inimical to the existence of the state”.  What may have been meant is the basic principle that taxation is essential to the existence of the state. 

Tip No. 5.  Do not get carried away by the intensity of your convictions.  When I asked what the examinee thought of a tax imposed by the City Mayor on the use of elevators in the City Hall, said, “What does the Mayor think of the high-tech elevators in the City Hall? Rides in a fair? To drop a peso coin for its use?”.  Another was, however, most respectful, when he said, “In the case at bar, as the Father of the City, the Mayor of Makati City cannot demand from the individual concern as to the P1.00 elevator tax because it is prejudicial and against public policy and order.”  All I wanted, in Question 1, was an explanation of why the power to tax was inherent in a sovereign state and this was what I got: “As in a mother to her child, from the time of conception to the giving of birth; up to the formative years; and even up to the moment of death as what Mother Mary exemplified when She stood at Her Son’s grave, the closeness, the inseparability, the intimacy is intertwined that such power of taxation can not be without for a sovereign nation to exist and perpetuate.”

Now tips for the examiner, even if he or she is not a first timer.

Tip No 1.  You may wish to give due credit to practical knowledge.  I, for instance, conceded some points to this answer (entirely wrong actually) to the question on political contributions, that said, “under BIR rulings, donation to political parties are taxable only when reported.”

Tip No. 2. Be patient with the examinees’ manner of expression.  On the validity of the elevator tax, I was told, “No, the elevator tax is not a valid imposition for they (I suppose meaning the elevators) are not immobilized by destination.  On what a capital asset is, an examiner wrote, “capital asset is the heart and soul of a corporation”.  And on whether proceeds of life insurance are subject to income tax, “No, it is not an income…it is a benefit, because income fruit and a tree.”  The tree/fruit analogy is bound to crop up in unexpected places.  To distinguish capital from ordinary asset, an examinee said, “the distinction between a capital asset is that the root of the tree, on the other hand ordinary asset are fruits of the trees”.

And finally, Tip No.3. Be prepared for prayers. Some will be addressed to you, such as “Maam/sir: Please help me pass.  I beg you! I tried so hard already.  Others are addressed to God himself.  This one wrote, “Honestly, Lord, I haven’t read this rule. Please forgiven  and have mercy on me” and followed it with the Hail Mary.  One answered Question VIII, after leaving Question VII blank, as follows: “I implore you in my undertaking to be lawyer, Open my mind to remember all the knowledge I acquired thru my reading and in the lectures I had attend  to give me light to discover the issues raise  in this bar questions so that I may answer this  questions.  The serenity to accept whatever is the will and always to show me the correct path for your greater glory.  Thank you so much Lord God for all the guidance, wisdom, knowledge and protection.”

This one is sure to tug at your heart: “My handwriting is a result of an illness which I hope, in God’s time, I will get off.  Please be patient with my answers and my handwriting.  I just want to be a lawyer.  Thank you. God bless us all”.  He did not stop there he went on, saying, “I know I have not fared well in these exams but that will not be a bar to my keeping some hope in my heart.  Thank you, dear Examiner.” 

But no one, I think will beat this examinee who gave it all he’s got: “I am a disabled person; the underprivileged and less opportunity.  A lowly stationed in life.  I am a disabled person and a destitute journeyman.  I am begging/asking your earnest favor; please, please and kindly accommodate/assist myself to pass this prestigious/laudable Bar subject.  Thank you.”.  Then he concluded, “More power and God bless.  Principium sapientiate Domini.  Shalom”.

I trust all the foregoing will put to rest whatever may still be lingering doubts.  But, even if I were the examiner, did you guys think I will admit it?