Withholding Tax Case of the Bureau of Mines

September 8, 1958 BIR RULING NO. 515-58 The Regional Director BIR Regional Office No. 3 Manila S i r : This refers to the withholding tax case of the Bureau of Mines involving the sum of P40.00 as penalty for late filing of Form W-3 and the alphabetical list of employees. cdta The Director of Mines in his 5th Indorsement dated November 22, 1957 explained that the delay in filing the aforesaid form and alphabetical list of employees is not willful not deliberate but due mainly to the usual red tape in government offices. It appears that BIR Form W-3 and the supporting papers for the calendar year 1955 were submitted by the disbursing officer of the Bureau of Mines to the Records Section of the same office before January 25, 1956, for delivery and transmittal in the ordinary course of official business. The usual practice observed in releasing official correspondence which requires verification of whether or not the enclosures or annexes thereto are properly attached, resulted in the delay in filing the same with the Bureau of Internal Revenue. Moreover, the Chief of the Records Section of the Bureau of Mines in his memorandum dated September 27, 1957 stated that the release of Form W-3 and the alphabetical list was delayed because he had to wait for the receipts covering payments of the withholding tax which he believed should be attached to said form pursuant to the instructions received by the Bureau of Mines from the Bureau of Internal Revenue. The said instructions embodied the two memoranda of the Bureau of Internal Revenue to all employers, city and provincial treasurers, and deputies dated December 3, 1951 and December 4, 1952 which were alleged to have been misinterpreted by the officials of the Bureau of Mines reads as follows: "In connection with the filing of Form W-1 (Quarterly Return of Income Tax Withheld on Wages) for the LAST QUARTER of 1951, to which should be attached the original of the Withholding Tax Receipts supporting payments of the amount shown thereon, the following SHOULD ACCOMPANY also the Form W-1 as required by Section 19 of Revenue Regulations No. V-8. "1. Form W-2a which is the triplicate of Form W-2, arranged alphabetically. xxx xxx xxx "2. THE ORIGINAL OF FORM W-3 . This Form is furnished the employer in duplicate and the original should be returned to this Office properly accomplished. Line 1 shows the total number of copies of Form W-2a transmitted with the Quarterly Return (Form W-1). Line 2 shows the total taxes withheld on wages during the year and should tally with Line 3(B) as well as the total of taxes withheld as shown on the alphabetical list of employees (Paragraph 3 of this Memorandum). Line 3 shows the taxes withheld per quarter for four quarters and the total amount withheld during the year, Line 3(B). cdti "3. List of names of employees arranged alphabetically showing the information indicated below and signed by a responsible official. . . ." After reading the abovequoted instructions, the undersigned is of the opinion that the interpretation made by the Chief of the Records Section of the Bureau of Mines is quite right. While it is true that the official receipts evidencing payments of the withholding tax need not be attached to Form W-3, yet it is required by said memoranda that the receipts should be attached to Form W-1 which in turn should be accompanied by Forms W-2a, W-3 and the list of names of employees arranged alphabetically. The records of this case further show that the transmittal of Treasury Warrant No. 4206595 in the amount of P201.25 addressed to the City Treasurer was dated February 9, 1956. This treasury warrant covers the remittance corresponding to the fourth quarter of 1955. The required forms were filed on February 10, 1956. These facts clearly show that there was a sincere desire on the part of the Chief, Records Section of the Bureau of Mines to comply with the instructions issued by our Office. The pertinent provisions of Republic Act No. 590 reads as follows: Article 8(a), Title II: "Any person who . . ., willfully fails to render or furnish a statement as required in this Supplement shall upon conviction, for each such act or omission, be fined not less than one thousand pesos and imprisoned for not more than one year." Under the abovequoted provisions of law, only wilful or deliberate failure to render or furnish the required statement is penalized. Where there is a sincere desire to comply with the provisions of the law and the instructions issued by our Office to implement the same, and where the delay was due mainly to the usual red tape in government offices, this Office is of the opinion that such delay is not penalized under the abovequoted provisions of law. Accordingly, our assessment in the sum of P40.00 is without legal basis and should, therefore, be countermanded. aisadc Please be guided accordingly. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue