Tax Liability of Taxpayer Who Availed of Voluntary Assessment Program Can Still Be Investigated

August 20, 1999 BIR RULING NO. 130-99 RMC 63-97-000-00-130-99 H.R. Lopez Co., Inc. Unit 1504 Tower I Tektite Towers Rd. Ortigas Center Pasig City Attention: Mr . Horacio A . Gonzales President Gentlemen : This refers to your letter dated July 14, 1999 requesting in effect for a ruling as to whether the tax liability of a taxpayer who availed of the Voluntary Assessment Program (VAP) can still be investigated. LLphil It appears from the records that a Letter of Authority (LA) No. 149308 dated September 9, 1997 issued by the Assistant Commissioner, Intelligence and Investigation Services of this Office, for the investigation of your books of accounts for the taxable year 1996 was duly served to your company; that pursuant to Revenue Memorandum Order Nos. 59-97, 60-97, and 63-97, you could avail of the benefit of the VAP; and that you are not among those taxpayers listed under Item II I(3) of RMO No. 63-97 who cannot avail of the benefits of the VAP because LA No. 149308 was issued not as a result of a verified information filed by an informer under Section 281 of the Tax Code, as amended, and duly recorded in the Official Registry Book of the Bureau before the date of availment under the VAP. In reply, please be informed that under Item II I(2) of RMO No. 63-97, any person liable to pay any internal revenue tax for the taxable year 1996 prior years, who due to inadvertence or otherwise, has under-declared his internal revenue tax liabilities or has not filed the required tax return may avail of the benefits under the VAP. Said Item II I(2) also provides that a taxpayer under audit pursuant to a duly issued LA or Revenue Verification Order (RVO) to whom a final notice of assessment has not been issued may also avail of the VAP. Upon availment of the VAP, pending LAs or RVOs are automatically revoked. Such being the case, the LA issued to your company has been automatically revoked pursuant to the aforecited provision of RMO No. 63-97. Accordingly, the Subpoena Duces Tecum issued by virtue of LA No. 149308 has no force and effect. However, relative to your question as to whether the tax liability of a taxpayer who availed of the VAP under RMO No. 59-97, as amended, can still be investigated, Item V(3) of RMO No. 59-97 provides as follows: "V. Benefits of the VAP "xxx xxx xxx "3. There shall be no investigation of taxpayers who have availed under VAP authorized under this Order and who have correctly declared their true tax liabilities, except upon approval and authorization of the Commissioner of the Internal Revenue, when there is evidence or finding of misdeclaration of any information on the return filed under the VAP." In other words, if there is an evidence or finding of misdeclaration of any information on the return filed by the taxpayer under the VAP, the said tax liability of the taxpayer shall still be investigated upon approval and authorization of the Commissioner. dctai This ruling is issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different then this ruling shall be considered null and void. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue