What is the effect if the BIR fails to comply with its formal requirements for a waiver of prescription and what are the jurisprudential exceptions?

• A. A waiver is invalid and produces no effect if the BIR fails to comply.
• B. A waiver is valid even if BIR doesn't comply, under any circumstance.
• C. The waiver is invalid unless exceptions apply: estoppel or in pari delicto.
• D. The waiver is invalid and there are no exceptions.

Answer: (C)

A waiver of prescription must meet the prescribed formal requirements to take effect. When the BIR fails to follow those formalities, the waiver is generally void and has no effect. However, courts recognize two jurisprudential exceptions that can save or modify this result: estoppel and in pari delicto. Estoppel applies when the BIR’s conduct or representations induce the taxpayer to act in reliance on the waiver, so the government cannot later enforce the prescription lapse. In pari delicto recognizes that, where both parties are at fault, equity may prevent enforcement of the strict formalities to avoid an unjust outcome. Because of these recognized exceptions, the rule is that the waiver is invalid unless these exceptions apply.