Filing of ITR With the Yearly Statement of Net Worth and Operations

October 17, 1958 BIR RULING NO. 615-58 The Municipal Treasurer Rosario, La Union S i r : In answer to your letter dated September 4, 1958, wherein you inquired as to whether or not a farmer, who realized an annual income of P2,000 from his sales of tobacco and palay produced in his farm in 1957, is required to file with his income tax return for said year a balance sheet, you are hereby informed that the farmer in question has to file with his income tax return the yearly statement of net worth and operations pursuant to Section 334 of the Tax Code, as amplified by Section 4 of Revenue Regulations No. V-13. LLpr Section 334 of the Tax Code provides that persons required by law to pay internal revenue taxes shall keep a journal and a ledger or their equivalents, provided that those whose gross quarterly sales, earnings, receipts, or output do not exceed P5,000 may keep and use only a simplified set of bookkeeping records approved by the Secretary of Finance. As his receipts in 1957 amounted only to P2,000, he ought to have kept and used at least the simplified set of bookkeeping records. The simplified set of bookkeeping records consists of the record of daily sales and cash receipts, the record of daily purchases, expenses, and cash disbursements, the record of summary transactions, and the yearly statement of net worth and operations. (Section 1, Revenue Regulations No. V-13). In connection with the yearly statement of net worth and operations, Section 4 of Revenue Regulations No. V-13 provides as follows: "The yearly statement of net worth and operations shall be prepared within sixty days after the end of the accounting year by using the totals for the year in the summary of transactions and the inventory sheet required by Section 13 of Revenue Regulations No. V-1. The said yearly statements shall be attached to the income tax return to be filed by the taxpayer." prll Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue