Unwritten Rule #8

If you overpay the government, good luck getting a refund.

It's a known fact for RE practitioners–or anyone dealing with the government–that if you overpay the government, the process of getting a refund will take forever (i.e., years). In fact, most would advise to simply forget about the overpayment.

Some agencies allow the repurposing of the overpayment to credits for future tax liabilities. But that, too, would take a long time and isn't 100% sure.

For example, I've witnessed a broker make a mistake with his calculation for documentary stamp tax (DST). They were in a hurry to pay the DST before the deadline for a transaction (5th of the following month), so they couldn't wait for the official computation from the BIR.

What she didn't realize is that she had previously changed formulas in her Excel spreadsheet with hard inputs during negotiations. So when parties finally decided on a lower selling price, the tax payable was overstated by a few hundred thousand.

When the parties realized this, who do you think reimbursed the buyer for the overpayment?