A. Mark, a compensation income earner, filed his income tax return for the taxable year 2018 on March 30, 2019. On May 20, 2022, Mark received an assessment notice and letter of demand covering the taxable year 2018 but the postmark on the envelope shows April 10, 2022. His return is not a false and fraudulent return. Can Mark raise the defense of prescription? Justify your answer. B. Differentiate tax exclusions from tax deductions. C. As a way to augment the income of the employees of DEF Inc., a private corporation, the management decided to grant a special stipend of P50,000.00 for the first vacation leave that any employee takes during a given calendar year. In addition, the senior engineers were also giving housing inside the factory compound for the purpose of ensuring that there are available engineers within the premises every time there is a breakdown in the factory machineries and equipment.

a. Is the special stipend part of the taxable income of the employees receiving the same? I f so, what tax is applicable and what tax rate? Explain.

b. Is the cash equivalent value of the housing facilities received by the senior engineers subject to fringe benefits tax? Explain.