BIR Ruling No. 075-10

September 16, 2010 BIR RULING NO. 075-10 Finance Regulations No. 1; RMO No. 12-93; RAO No. 011-09 Mr. Danilo A. Lihaylihay 25 Kaunlaran Street, Batasan Hills Quezon City Sir : This refers to your letters dated July 19 and July 30, 2010, respectively, requesting our Office to transmit to the Accounting Division the tax dockets covering your claims for informer's reward. cEDIAa Letter dated July 19, 2010 particularly requests "to direct/order the Law Division to immediately transmit to the Accounting Division the entire tax dockets of the Bangko Sentral ng Pilipinas (BSP) covered by C.I. No. 14-98 and C.I. No. 110-2006 and Bank of America (BA) covered by C.I. No. 76-95, for the processing of my claims for reward pursuant to Section 2 (g), Rule II in conjunction with Section 2 (4) of Rule VI, of the implementing rules and regulations of Republic Act No. 9485 in relation to Section 3, Executive Order No. 338, series of 1996, and Special Provision No. 3 of BIR under RA 9172, etc., for want of specific Statutory authority and out of delicadeza." These cases stemmed from your claim for disbursement or payment of your alleged informer's rewards in the amount of PhP900,000,000.00 in relation to the internal revenue tax case of Bangko Sentral ng Pilipinas (BSP) for taxable years 2004, 2005, 2006 and 2007, as well as your request for the disbursement or payment of Php54,375,886.26 informer's reward on the compromise payments made by Bank of America (BA) on its internal revenue tax case for taxable year 1995 and prior years. In reply, we regret to inform you that your request cannot be granted for lack of factual and legal basis. Please be informed that the standard procedures for the processing of claims for informer's rewards shall be followed, more particularly, Revenue Memorandum Order (RMO) No. 12-93 dated February 1, 1993 which provides for the guidelines, rules and procedures in the filing of confidential information for violation of the NIRC. RMO No. 12-93 was promulgated pursuant to Finance Regulation No. 1 of the Department of Finance, which also adheres to the mandates of Section 282 of the NIRC. Part VII of RMO No. 12-93 provides that the claim for informer's reward shall be processed by the Law Division (then the Legislative, Ruling and Research Divisions). The Law Division's authority to process claims for rewards is strengthened by Revenue Administrative Order (RAO) No. 011-09. Under the said revenue issuance, the Law Division is tasked to process the informer's reward and to initiate the action for the payment thereof if the informer is entitled thereto. The Legal Service, under the direct supervision of the Deputy Commissioner for Legal Group, is authorized to review, recommend and/or approve the actions taken by the Law Division relative to the entitlement of an informer to reward. Upon the recommendation and/approval of the Deputy Commissioner, the Commissioner of Internal Revenue shall recommend the payment of reward to the informer, subject to approval by the Secretary of Finance. The processing of the Disbursement Voucher, covering the informer's reward shall only be made upon the recommendation by the Commissioner, subject to the approval by the Secretary of Finance, following review and recommendation by the Committee on Reward, Department of Finance. aSECAD Moreover, you claim under your letter dated July 30, 2010 that "the processing of payment/disbursement of informer's reward was further modified by Section 4 (c) in conjunction with Section 8 (b) in relation to Section 2 (g) Rule II, in conjunction with Section 2 (4), Rule VI, of the implementing rules and regulations of Republic Act No. 9485 [Anti-Red Tape Act of 2007], in the processing of rewards by the agency concerned shall be completed within the maximum period of only ten (10) working days from receipt of the request for payment by the informer." However, your reliance on the provisions of Republic Act (RA) No. 9485 and its Implementing Rules and Regulations as to the processing of claim of informer's reward is misplaced. Section 3 of RA No. 9485 (otherwise known as the "Anti-Red Tape Act of 2007") particularly excludes those government offices which perform judicial, quasi-judicial and legislative functions. Section 3 provides: SEC. 3. Coverage . This Act shall apply to all government offices and agencies including local government units and government-owned or -controlled corporations that provide frontline services as defined in this Act. Those performing judicial, quasi-judicial and legislative functions are excluded from the coverage of this Act . (emphasis supplied) In Midland Insurance Corporation vs. IAC (143 SCRA 458, 462 [1986] ), the Supreme Court has defined the function of a quasi-judicial body as "a term which applies to the action, discretion, etc., of public administrative officers or bodies, who are required to investigate facts, hold hearings, and draw conclusions from them, as a basis for their official actions and to exercise discretion of a judicial nature." It must be stressed that the Legal Service of the BIR and its divisions and sections are performing quasi-judicial functions, which removes them from the ambit of Section 2 (g) Rule II and Section 2 (4) Rule VI of the Implementing Rules and Regulations (IRR) of RA No. 9485, requiring the processing of requests within the period of ten (10) working days in the case of complex transactions from the time the request or application was received. In view of the foregoing, your request of forwarding the case dockets of both BSP and BA, without the prior approval of the appropriate Offices, is denied for lack of factual and legal basis. Please be guided accordingly. CAacTH Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue