Powers of the Internal Revenue Agents or Examiners and Provincial Treasurers and Their Deputies

May 5, 1958 BIR RULING NO. 251-58 The Philippines Free Press Free Press Building 708 Rizal Avenue Manila Attention : Information Department Gentlemen: Hereunder are the answers to the queries of Messrs. Dionisio Virtudes, M. de Rosas, and Presidio Y. Ausa which you have requested this Office to furnish you in your letter dated April 8, 1958. prll Re: Query of Mr. Dionisio Virtudes (1) Section 20 of Revenue Regulations No. V-1, known as the Bookkeeping Regulations, empowers authorized internal revenue officers to take books of accounts and other related records or papers of the taxpayer for purposes of inspection and/or examination. Pursuant to Section 580 of the Revised Administrative Code of the Philippines, internal revenue agents, agents assistants and examiners may require the production of documents under a subpoena duces tecum or otherwise. Accordingly, the aforesaid officers, when duly authorized to examine or investigate a taxpayer, can validly order the taxpayer to submit his books and other related records or papers to the office of said officers. (2) Internal revenue agents or examiners may examine books of accounts of taxpayers within or outside the business establishment of the latter. However, whenever internal revenue officers take the books of accounts or other related records of or papers of the taxpayer for examination outside his place of business, the said officers must issue a receipt therefor on the required internal revenue form. (3) A taxpayer is entitled to an explanation on any tax assessments against him if he so requests. cdta Re: Query of Mr. M. de Rosas. Section 16 of the Tax Code, as amended, provides, among others, that provincial treasurers and their deputies shall have the power to administer oaths in any official matter within the jurisdiction of the Bureau of Internal Revenue. Pursuant to Sections 2088 and 2208 (e) of the Revised Administrative Code of the Philippines, only the assistant provincial treasurer and the municipal treasurers are considered as deputies of the provincial treasurer. Accordingly, the so-called "Administrative Deputy", in the Office of the Provincial Treasurer referred to in his letter, not being considered by law as a deputy of the provincial treasurer, is not authorized to administer oath on the income tax return filed by taxpayers, unless he has been duly commissioned as a notary public. Re: Query of Mr. Presidio Y. Ausa A taxpayer who fails to attach to his income tax return the yearly statement of net worth and operations required under Section 6 of Revenue Regulations No. V-1, as amended by Revenue Regulations No. V-13, is punishable with a fine of not more than P300 or by an imprisonment of not more than six (6) months, or both, pursuant to Section 352 of the Tax Code. The law and the regulations do not require that the failure to accompany the income tax return with the yearly statement of net worth and operations must be intentional on the part of the taxpayer in order that the penalty for such failure shall attach. The mere failure to file the said statement, whether intentional or not, constitutes a violation of the Regulations. The acceptance of a return tendered for filing is pure routine. Such acceptance connotes nothing more than that the return has been filed. As regards proof of filing of the statement of net worth and operations, the taxpayer is, in all cases, entitled to an acknowledgment of the filing of said statement. In fact, the writer has manifested that, upon demand by the taxpayer, the receiving officer stamps and signs the said statement filed by the taxpayer. The taxpayer, therefore, can easily protect himself, in case the said statement is lost after it has been filed, by the simple expedient of asking the receiving officer, at the time of filing thereof, to acknowledge receipt of said statement. As requested, the basic inquiries are herewith returned. cdti Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue