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BrightWave Manufacturing, Inc., a domestic corporation, received a Notice of Assessment from the BIR for deficiency value-added tax (VAT) and civil penalties arising from underreporting domestic sales in the prior year. The Notice shows a base VAT deficiency of PHP 4,000,000 and civil penalties totaling PHP 1,000,000. The BIR Commissioner approves a compromise: pay PHP 2,500,000 in full within 12 days, and all civil penalties are waived; the case is closed. A year later, it is discovered that the approval was issued by an official who was not expressly authorized by the Commissioner to approve compromises. The BIR now questions the validity of the compromise and whether criminal liability could still be pursued. (a) Identify the controlling doctrine on compromise penalties under the NIRC and related BIR rules. (b) Distinguish compromise of civil penalties from other remedies and state the limits of the government’s authority to grant or deny such compromises. (c) Apply to the facts: Is the compromise valid and binding? Could the government still pursue criminal liability or other remedies? Explain.