Can a Court Stop the BIR From Collecting Tax? NIRC Section 218 and the CTA's Suspension-With-Bond Exception
Generally no: NIRC Section 218 provides that “no court shall have the authority to grant an injunction to restrain the collection of any national internal revenue tax, fee or charge.” The statutory exception is narrow. The Court of Tax Appeals (CTA) may suspend collection while an appeal is pending, but only on its own finding of jeopardy and only if the taxpayer deposits the amount claimed or files a surety bond.
Stay Ahead of Deficiency Notices — Start FREE →What does NIRC Section 218 prohibit? #
Section 218 is a single-sentence prohibition on court injunctions against collection. It reads:
“No court shall have the authority to grant an injunction to restrain the collection of any national internal revenue tax, fee or charge imposed by this Code.”
— Section 218, National Internal Revenue Code (Republic Act No. 8424), as posted by LawPhil.
Filing a court case therefore does not automatically halt distraint or levy. The usual route for disputing an assessment runs through the protest process, summarized in How to File a BIR Protest Letter and PAN vs FAN: The Assessment Due-Process Sequence.
What is the CTA’s exception? #
The law creating the CTA, Republic Act No. 1125, as amended by Republic Act No. 9282 (Section 9, amending Section 11), provides that an appeal to the CTA does not by itself suspend collection, and then gives the court a power to do so:
“No appeal taken to the CTA from the decision of the Commissioner of Internal Revenue … shall suspend the payment, levy, distraint, and/or sale of any property of the taxpayer for the satisfaction of his tax liability as provided by existing law: Provided, however, That when in the opinion of the Court the collection by the aforementioned government agencies may jeopardize the interest of the Government and/or the taxpayer the Court [at] any stage of the proceeding may suspend the said collection and require the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the Court.”
— Section 11, Republic Act No. 1125 as amended by Section 9 of Republic Act No. 9282. The bracketed “[at]” corrects a word missing in the posted text. Later amendments may exist; confirm the current text.
The same section requires an appeal to be filed with the CTA “within thirty (30) days after the receipt of such decision or ruling.”
Who decides, and on what condition? #
Under the quoted provision, the power to suspend collection belongs to the CTA, and it arises “in the opinion of the Court.” The taxpayer must either deposit the amount claimed or file a surety bond “for not more than double the amount.” A taxpayer cannot unilaterally suspend collection by filing a petition. For a decision on how the court has applied this power, read CIR v. American Wire & Cable: When the CTA Can Suspend BIR Tax Collection in our Day in Court series; the Day in Court hub lists the other cases.
Worked example: the bond ceiling #
A final decision on a disputed assessment orders Marlo’s Hardware to pay ₱2,000,000 in deficiency tax, with penalties and interest to be computed separately. Marlo files a timely petition with the CTA and asks for suspension of collection.
| Item | Amount (₱) |
|---|---|
| Amount claimed by the BIR | 2,000,000 |
| Deposit option | up to 2,000,000 |
| Surety bond ceiling (“not more than double the amount”) | up to 4,000,000 |
The CTA decides the actual amount, if it finds jeopardy. If it does not, Section 218 means the BIR may continue with distraint or levy; see BIR Warrant of Distraint and Levy.
What should a taxpayer do instead? #
- Calendar the 30-day deadline from receipt of the final decision; see BIR Final Decision on Disputed Assessment (FDDA).
- Consider a compromise where legal grounds exist; see Compromise Settlement Under Section 204.
- If seeking suspension, ask the CTA expressly, and be ready to deposit or post a bond.
Summary #
NIRC Section 218 bars court injunctions against collecting national internal revenue taxes, but Republic Act No. 1125 as amended by Republic Act No. 9282 lets the CTA suspend collection if it finds jeopardy, on condition that the taxpayer deposits the amount claimed or files a surety bond of not more than double that amount. Quotations are from LawPhil postings; verify the current text.
Frequently asked questions #
Can a regional trial court stop the BIR from collecting a tax assessment? #
No. NIRC Section 218 says no court has authority to grant an injunction to restrain the collection of any national internal revenue tax, fee or charge imposed by the Code.
Does appealing to the Court of Tax Appeals automatically stop collection? #
No. Under Section 11 of Republic Act No. 1125 as amended by Republic Act No. 9282, an appeal does not suspend payment, levy, distraint, or sale of the taxpayer’s property unless the court orders suspension.
When can the CTA suspend collection? #
When, in the opinion of the court, collection may jeopardize the interest of the Government or the taxpayer. The court may then suspend collection at any stage of the proceeding.
What must the taxpayer provide for suspension? #
Either a deposit of the amount claimed or a surety bond with the court for not more than double the amount, as required by Section 11 of Republic Act No. 1125 as amended.
How long do I have to appeal a BIR decision to the CTA? #
Thirty days from receipt of the decision or ruling, or from the expiration of the period fixed by law for action, according to Section 11 of Republic Act No. 1125 as amended by Republic Act No. 9282.