You are a broker, and you are processing the transfer of a title from the seller to the buyer.
The seller, Anna, is a widow, who insists that the property is her paraphernal property. She allegedly acquired it as inheritance from her mother, Helen, but title was issued in her name during her marrrage to her husband, Leo. Leo died many years ago.
The BIR insists that the property is conjugal, and refuses to give the Certificate Authorizing Registration (CAR) unless you present proof that estate taxes have been paid.
What do you do?
TRACE THE HISTORY OF THE PROPERTY. To do this, you will need the following documents:
TRACER
This tracer should show who the owner of the property was, prior to its acquisition by Anna. Helen's name should appear in the tracer as Anna's predecessor. You can secure this tracer from both the Assessor's Office and the Register of Deeds.
TITLE OR TAX DEC OF PREVIOUS OWNER
You should have a copy of Helen's title or tax declaration, to prove that the property was previously owned by her. If the property is covered by a Torrens title, get this from the Register of Deeds. Otherwise, go to the Assessor's Office for a copy of the prevous Tax Declaration.
DEED OF TRANSFER
If Anna inherited the property from Helen, Helen's title or tax declaration would not be cancelled unless Anna and her co-heirs executed an Extra-Judicial Settlement of her estate. Or if Anna was an only child, she should have executed an Affidavit of Adjudication of Sole Heir.
This document should be in the files of either the Register of Deeds as supporting document for the cancellation of Helen's title and the issuance of the title in Anna's name, or the Assessor's Office for the cancellation of Helen's tax declaration and the issuance of Anna's. Get a certified true copy of this document and bring it to the BIR together with the other documents enumerated here.
DEATH CERTIFICATE AND MARRIAGE CERTIFICATE
Why do you need these? Remember the date August 3, 1988? If Anna and Leo were married prior to August 3, 1988, their marriage was governed by the regime of Conjugal Partnership of Gains (CPG). If their marriage happened on August 3, 1988 or later, their marriage is governed by the regime of Absolut Community Property (ACP).
When did Helen die? If she died AFTER Anna got married, the property is definitely PARAPHERNAL (meaning, NOT conjugal or community property). It does not matter if Anna married Leo before or August 3, 1988.
But if Helen died BEFORE Anna got married, it will matter WHEN Anna and Leo got married.
a. If Anna married Leo before August 3, 1988, the property is PARAPHERNAL. If Anna and Leo got married prior to August 3, 1988, their regime is Conjugal Partnership of Gains. Under this regime, any property acquired by the spouses prior to their marriage does not become conjugal.
b. But if Anna married Leo on August 3, 1988 or after, the property is community property. Anna and Leo's regime would then be Absolute Community Property, which includes all properties owned by the spouses prior to their marriage.
If your case falls under Item (a) above, you will need Helen's Death Certificate and Anna's Marriage Certificate to prove this point.
BRING ALL DOCUMENTS TO THE BIR and present it to them. Better yet, make a summary of your documents as a sort of cover letter to help the BIR understand.
If the BIR still does not agree with you, see a lawyer.