FSMC, TITLE 54.  TAXATION AND CUSTOMS

CHAPTER 8
Revenue Administration
[FOR REFEREENCE ONLY]

Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.

Section 1 of PL 17-83 states:

Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:

§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.

PL 17-83 was signed into law by Vice President Alik L. Alik on April 19, 2013.

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SUBCHAPTER III
Tax Decisions
[FOR REFEREENCE ONLY]

SECTIONS

§ 810. Self-assessments.
§ 811. Assessment of person who fails to file a tax return.
§ 812. Advanced tax assessments.
§ 813. Amendment of tax assessments.
§ 814. Validity of tax decisions.
§ 815. Correctness of tax decisions.
§ 816. Rectification of mistakes.

Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.

Section 1 of PL 17-83 states:

Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:

§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.

Section 10 of PL 17-50 added a subchapter III of chapter 8 entitled Tax Decisions.

§ 810. Self-assessments.

(1) For the purposes of this chapter:

(a) a self-assessment taxpayer who has filed a self-assessment return is treated as having made an assessment of the amount of tax payable for the tax period to which the return relates being that amount as set out in the return; and

(b) a self-assessment return furnished by a self-assessment taxpayer is treated as a notice of the assessment served by the CEO on the taxpayer on the date the return was filed.

(2) Reserved.

Source: PL 17-50 § 11.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 821 to 810 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 811. Assessment of person who fails to file a tax return.

(1) If a taxpayer liable for tax on an assessment basis under a revenue law fails to file a tax return for a tax period as required under the revenue law, the CEO may, at any time, make an assessment of the tax payable by the taxpayer.

(2) The CEO must serve a taxpayer assessed under subsection (1) of this section with notice of the assessment as soon as is practicable after making the assessment. The notice must state:

(a) the amount of tax payable;

(b) the amount of interest or penalty (if any) payable in respect of the tax payable;

(c) the tax period in respect of which the assessment relates;

(d) the date of issue of the notice; and

(e) the due date for payment of the tax payable under the notice.

Source: PL 17-50 § 12.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 822 to 811 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 812. Advanced tax assessments.

(1) The CEO may make an assessment of the tax payable for the tax period and the tax is payable on the date set out in the notice of assessment served on the taxpayer if, in any tax period:

(a) a taxpayer liable for tax on an assessment basis under a revenue law ceases to carry on a trade, business, profession, vocation, or employment; or

(b) the CEO has reasonable grounds to believe that a taxpayer liable for tax on an assessment basis under a revenue law may leave, or has left, the FSM without filing a return as required under the revenue law for the tax period.

(2) The CEO must serve a taxpayer assessed under subsection (1) of this section with notice, in writing, of the assessment as soon as is practicable after making the assessment, and such notice must set out the matters specified in section 811(2) of this title.

(3) An assessment made under subsection (1) of this section can be amended under section 813 of this title so that the taxpayer is assessed in respect of the whole of the tax period to which the assessment under subsection (1) of this section relates.

Source: PL 17-50 § 13.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 823 to 812 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 813. Amendment of tax assessments.

(1) Subject to this section, the CEO may amend a tax assessment by making such alterations or additions to the assessment as the CEO considers necessary to ensure that a taxpayer is liable for the correct amount of tax payable in respect of the tax period to which the assessment relates.

(2) A self-assessment taxpayer can apply to the CEO within the time specified in subsection (3)(b) of this section for the CEO to make an amendment in accordance with subsection (1) of this section to a self-assessment and the CEO shall serve the taxpayer with notice of the decision on the application as soon as is practicable after the making of the assessment.

(3) The amendment of a tax assessment under subsection (1) of this section may be made:

(a) in the case of fraud or willful neglect, within six years of the date the CEO served notice of the assessment on the taxpayer or within one year after the fraud or willful neglect is discovered, whichever is the later; or

(b) in any other case, within six years of the date the CEO served notice of the assessment on the taxpayer.

(4) As soon as practicable after making an amended assessment under this section, the CEO must serve the taxpayer with notice of the amended assessment.

(5) Subject to subsection (6) of this section, if a notice of assessment (referred to as the “original assessment”) has been amended under subsection (1) of this section, the CEO may further amend the original assessment within the later of:

(a) six years after the CEO served notice of the original assessment on the taxpayer; or

(b) one year after the CEO served notice of the amended assessment on the taxpayer.

(6) If subsection (5)(b) of this section applies, the CEO is limited to amending the alterations and additions made in the amended assessment to the original assessment.

(7) An amended assessment is treated in all respects as a tax assessment for the purposes of this chapter (other than subsection (1) or (2) of this section) and the revenue law under which the original assessment has been made.

(8) The making of an amended assessment does not preclude the liability for any interest and penalty in relation to the tax assessed under amended assessment arising from the date that tax was due under the original assessment.

Source: PL 17-50 § 14.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 824 to 813 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 814. Validity of tax decisions.

(1) The validity of a tax decision, a notice of a tax decision, or any other document purporting to be made or executed under a revenue law, if it is, in substance and effect, in conformity with the law under which it has been made, issued, or executed and the person assessed, or intended to be assessed or affected by the decision or document, is designated in it according to common understanding:

(a) cannot be quashed or deemed to be void or voidable for want of form; or

(b) is not affected by reason of any immaterial mistake, defect, or omission therein.

(2) Reserved.

Source: PL 17-50 § 15.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 825 to 814 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 815. Correctness of tax decisions.

(1) Except in proceedings under subchapter IV of this chapter:

(a) no tax decision can be disputed in any court or in any other proceedings on any ground whatsoever;

(b) the production of the original notice of a tax assessment or a document under the hand of the CEO purporting to be a copy of a notice of such assessment is conclusive evidence of the making of the assessment and that the amount and particulars of the assessment are correct; and

(c) in the case of a self-assessment taxpayer, the production of the original self-assessment return or a document under the hand of the CEO purporting to be a copy of such return is conclusive evidence of the contents of the return.

(2) A court must, in all proceedings, take judicial notice of the signature of the CEO in either the original or copy of a notice of a tax decision.

Source: PL 17-50 § 16.

Cross-reference: The statutory provisions on the FSM Supreme Court and the Judiciary are found in title 4 of this code.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 826 to 815 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 816. Rectification of mistakes.

If the CEO is satisfied that an order made or document issued by the CEO under a revenue law contains a mistake that is apparent on the face of the record or document and the mistake does not involve a dispute as to the interpretation of the law or facts of the case, the CEO may, for the purposes of rectifying the mistake, amend the order or document any time before the expiry of six years from the date of making or issuing the order or document.

Source: PL 17-50 § 17.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 827 to 816 to allow all of the sections in this chapter to have eight hundred section numbers.