Under the McDonald's v CIR decision, what are the due process requirements when invoking the 10-year extension period?

• A. The BIR must show fraud is deliberate or willful.
• B. The taxpayer must be informed of facts and basis of allegations.
• C. The BIR should not act inconsistently and must communicate the bases for extending.
• D. All of the above.

Answer: (D)

The key idea here is due process in how the BIR can invoke the 10-year extension to assess taxes. The extension isn’t automatic; it rests on clear safeguards to protect the taxpayer’s rights. Under McDonald’s v CIR, the BIR must prove that any extension is tied to fraud that is deliberate or willful. It isn’t enough to allege something vague; the fraud claim needs to be shown as intentional evasion of taxes.

Alongside that, the taxpayer must be informed of the facts and the exact basis of the allegations against them. This gives the taxpayer notice of what is being claimed and the reasons behind the extension, allowing a meaningful opportunity to respond or present evidence.

Finally, the BIR must act consistently and spell out the bases for extending. There should be no contradictory positions or hidden grounds for extending the period; the approach must be fair and transparent.

Taken together, these elements ensure the extension is used properly and not as a tool to surprise or oppress the taxpayer. That’s why all three requirements are the proper standard.