The abatement or cancellation of internal revenue tax liability is one of the remedies available to taxpayers. This is pursuant to the broad powers of the Commissioner of Internal Revenue (CIR) to cancel and abate tax liabilities under our National Internal Revenue Code (Tax Code). Section 204(B) of the Tax Code expressly provides that the CIR may abate or cancel tax liabilities when the tax or any portion thereof appears to be unjustly or excessively assessed, or the administration and collection costs involved do not justify the collection of the amount due.
Because of the use of the word “may” in Section 204(B) of the Tax Code, it is discretionary on the CIR to decide whether or not to abate or cancel a tax liability. Thus, unless there is an abuse of discretion, the courts will not interfere with the CIR’s exercise or refusal to exercise his power to abate taxes (Lepanto Consolidated Mining v. Commissioner of Internal Revenue, CTA EB 1720, May 3, 2019).