Transitory Procedures During Pilot Roll-Out of the Accounts Receivable Monitoring System (ARMS)

October 15, 2012 BIR OPERATIONS MEMORANDUM NO. 002-12 TO : ACIR, Large Taxpayers Service Chief, LT Collection Enforcement Division Chiefs, LT Regular Audit Divisions 1 to 3 Chiefs, LT Excise Audit Divisions 1 and 2 Chiefs, Large Taxpayers District Offices (Makati) ACIR, Legal Service Chief, Litigation Division Chief, Prosecution Division Chief, Appellate Division Chief, Law Division ACIR, Enforcement Service Chief, National Investigation Division ACIR, Collection Service Chief, Collection Enforcement Division Chief Regional Director, Revenue Region No. 8-Makati City All Revenue District Officers Under RR No. 8 All Concerned Divisions Under RR No. 8 SUBJECT : Transitory Procedures During Pilot Roll-Out of the Accounts Receivable Monitoring System (ARMS) The enhanced version of the Accounts Receivable Conversion System (now called the ARMS) is scheduled to be rolled-out to the following offices of the Bureau on the dates specified hereunder: Office/s Roll Out Date Collection Enforcement Division (CED) October 15, 2012 Large Taxpayers Collection Enforcement Division October 15, 2012 (LTCED) Large Taxpayers District Office (LTDO)-Makati October 22, 2012 All Revenue District Offices (RDOs) and concerned October 22, 2012 Divisions under Revenue Region No. 8-Makati City Concerned Offices in the National Office October 29, 2012 In order to test the functionalities of the enhanced version of the aforesaid system, there is a need to migrate the existing data encoded in the ARCS 1. The migration of the data stored in the ARCS 1 database shall be the responsibility of the Systems Maintenance and Support Division (SMSD). However, to ensure that the data in the existing ARCS database are fully migrated, the SMSD shall provide the CED with the list of all cases in soft copy, sorted as to the name of encoder and further classified as to the RDO or Office which has jurisdiction over the case. The list shall be used as basis of the CED in checking the completeness and accuracy of the migrated data, considering that CED can view all accounts receivable (AR) cases that were created under ARCS 1. cEaTHD After the migration process has been completed, the following are expected to be viewed through the MODIFY/INQUIRE DOCKET: a. All the migrated cases are tagged as OLD; b. Docket Number (Format: RDO + YYYY + 00001); c. Docket Case Status are all tagged as OPEN; d. Correspondences (PCL, FNBS) have pre-populated information if the same are available in the migrated data; e. The Warrant of Distraint and/or Levy (WDL) button shall be enabled for encoding of WDL information; and f. The name of the person who encoded the case and their corresponding Office and Division based from ARCS 1 Application. Prior to the pilot roll out, there is a need to identify specific user/s that will access the enhanced system and validate the migrated data as to the accuracy of the information indicated therein, depending on the ACTUAL information of the docket. Only identified user/s shall be granted access to the system. Once the system has been rolled-out to pilot sites, the following procedures shall be adopted: I. Handling of Migrated Data : 1. When the physical docket is still in the concerned office: a. Verify existence of the information in the docket on hand by accessing ARMS-ARDA-Inquire Docket and follow the illustrated process flow in Annex "A" hereof; DCcTHa b. Update or modify the information reflected, following the job aids provided for updating or modifying the case, to ensure the following: i. Registration information of taxpayers that were encoded on enhanced ARCS are matched with the information in the REG database ( e.g. , TIN, registered address, RDO, etc.). ii. The TIN and Branch Code information are matched with the corresponding docket in the application. iii. The ARCS docket contains information regarding the Tax Type, Assessment Number, Return Period, Date of Receipt by the Taxpayer of the Final Assessment Notice (FAN); the amount due per tax type; and Date Created on the old system. iv. The ARCS docket case contains the classification codes and the transaction type and other list of values to map the correct codes to the enhanced ARCS. If the TIN of the taxpayer is found to be "ceased" or "deceased", meaning not "active", the concerned Revenue Officer shall take note of this case and put appropriate remarks on the space provided. c. Indicate the automatically created Docket Number to the physical docket at the upper right corner of the docket using a permanent marker; and on the attached "Conversion Input Form" (CIF) (Annex "B"). All the documents that form part of the docket are required to be fastened in a folder. DHCcST d. Update/add information regarding settlement, payment or cancellation of accounts following the illustrated process flow in Annex "C" hereof. 2. When the case's physical docket is no longer with the concerned office, check records on file to verify the status of the case: a. Status is "OPEN" i. If the case is still open and the case was already transferred to another office, transfer-out the case to the particular office. (see Annex "D" for the process flow image). ii. If the particular office is one of the pilot sites, it shall acknowledge receipt of the cases. (Please refer to Annex "E" for the process flow image for acknowledging docket) After acknowledging, the office to where the case was transferred shall follow procedures under 1.1 hereof for updating the case's status. iii. If the Office to which the case was transferred is not among the aforesaid pilot sites, the case shall be transferred-out using ARDA-Modify Docket (Docket Activity Tab Annex "D) given the following details: To Accountable Office : NO To Accountable Division : Non-Pilot Division To Accountable Profile : Non-Pilot User To Accountable Officer : (Created user for this Division) These cases shall later on be transferred by the concerned office under the Information Systems Group based on the recommendation of the CED. HICATc iv. The mass transfer using migration script shall be made prior to the nationwide roll-out of the ARMS. The Offices where these cases shall be transferred shall be responsible for updating the cases' status upon the nationwide roll-out of the ARMS. b. Status is "CLOSED" i. If the case's status is "closed" due to payment, encode the details of payment thru the "PAYMENT/CLOSURE DETAILS" (see Annex "F"). However, before encoding the payment, validate the same from the Collection and Bank Reconciliation (CBR) system of the Integrated Tax System (ITS) to ensure accuracy thereof. ii. If the case's status is "closed" due to an approved Authority to Cancel Assessment (ATCA), encode the reference number and other details being required from the approved ATCA form. The following are instances when ATCA is required: 1. The case was closed due to the approval of the application for abatement or compromise by the Commissioner, National Evaluation Board, or the Regional Evaluation Board, as the case may be; 2. The case was closed due to a final and executory decision by the competent Court or by the Legal Group declaring the delinquent account (DA) as uncollectible due to prescription. However, the corresponding ATCAs for prescribed cases shall only be issued by the ACIR, Legal Service pursuant to Revenue Delegation Authority (RDAO) No. 6-2001; ASDTEa 3. The issued FAN was determined to be "null and void" after satisfying the conditions provided in Revenue Regulations No. 12-99. 4. The taxpayer availed of the Tax Amnesty and the same was found to be valid. iii. If the case's status is "closed" per existing record due to circumstances stated under 2 (b) (ii) hereof, but there is no record that an ATCA has been prepared, the ATCA must be prepared and the same must be approved by the authorized BIR official in accordance with the existing rules and regulations. The particular case can only be closed after the approval of the ATCA and after encoding the required ATCA details in AR database. However, it is incumbent to the recommending officer to validate if the case is qualified for the issuance of ATCA. c. If the case's status or whereabouts of the docket can no longer be determined from the existing records: Prepare a list of these cases and submit the same to their respective Regional Collection Division (CD), in the case of RDOs; Large Taxpayers Collection Enforcement Division (LTCED), in the case of LT Regular Audit Divisions (LTRAD) 1 to 3 and LT Excise Audit Divisions (LTEAD) 1 and 2; Office of the ACIR-LTS in the case of Large Taxpayers Division Office (LTDO-Makati); CED in the case of all other concerned Offices in the National Office, other than LTRAD and LTEAD, for verification with their existing records. Thereafter, CD/LTCED/Office of ACIR-LTS/CED shall verify from their existing records the status of the case. If they are in possession of the docket, follow the procedures under Item 1.1 hereof. If the docket is not in their possession, but the case is still open and the docket's whereabouts can be determined based on existing records, follow the procedures under Item 2 (a) hereof. EADSIa i. In all cases that needs updating, the concerned Office must update the information in the ARMS, provided that the same is supported with necessary documents. ii. Validation of old ARDA cases (migrated data from ARCS) must end not later than December 31, 2012. iii. All concerned Offices must continue to submit the required manually-prepared General Control Ledger (GCL) report and the supporting schedules thereof during the pilot roll-out. iv. It shall be the responsibility of the Office of the ACIR-Collection Service. ACIR-Large Taxpayers Service, ACIR-Legal Service, ACIR-Enforcement Service, Regional Director, Regional Collection Division, and Collection Enforcement Division to ensure that cases under their respective jurisdiction are fully validated. II. Handling of Validated Old ARDA Cases/Old ARDA Cases But Not Yet in the ARMS Database/New ARDA Cases : 1. All validated old cases still pending with the concerned Office must be acted upon following the existing procedures prescribed for the enforcement of collection remedies, if applicable. Otherwise, the needed action ( e.g. , resolution of legal issues, evaluation of application for compromise settlement or abatement, etc.) for the particular case must be made. It is important to note that any actions taken on the case must be encoded by the concerned Revenue Officer in ARMS. 2. For old cases which are not listed as pending in their respective jurisdiction, but are in reality still pending with them, encode the necessary information being required by the system through the "add" facility of the ARCS after accomplishing the revised CIF (Annex "B"). EAHDac 3. Newly created accounts receivable cases received by the concerned Office during the pilot rollout of the ARCS must be added in the accounts receivable database using the "add" facility. III. Handling of ARMS Issue Escalation and Resolution : 1. All problems and inconsistencies of the system's behaviour from the expected output must be immediately recorded and reported to the BIR HelpDesk. 2. The Helpdesk must elevate the issues to the Systems Maintenance Support Division (SMSD), which shall subsequently refer the issues and problems to the project contractor for resolution within the prescribed time as indicated in the Service Level Agreement (SLA). IV. Pilot Implementation Project Reporting : To ensure the smooth implementation of the ARMS, a weekly meeting shall be held at the Office of the Assistant Commissioner, Collection Service. During the said meeting, issues and problems elevated must be resolved and the status of validation of migrated ARDA cases must be reported. The Notice of Meeting shall be prepared by the Chief, Collection Enforcement Division. It should be noted that the foregoing transitory procedures shall be followed by the concerned pilot sites until such time that an amendatory OM has been issued. Strict compliance herewith is hereby enjoined. (SGD.) KIM S. JACINTO-HENARES Commissioner Bureau of Internal Revenue ANNEX A Procedure on Inquire Docket ANNEX B Accounts Receivable Conversion Input Form (CIF) APPENDIX A APPENDIX B ANNEX C Procedure on Encoding Settlement ANNEX D Procedure on Transfer the Docket ANNEX E Procedure on Acknowledgement of Docket Transfer