BIR Ruling [UN-007-94]

January 4, 1994 BIR RULING [UN-007-94] FLM Office Equipment Sales and Services 4628 Arellano cor. Laredo Streets Palanan, Makati, Metro Manila Attention: Mr . Felixberto S . Mendoza General Manager Gentlemen : This refers to your letter dated December 10, 1993, requesting that you be allowed to pay only the amount of P1,000.00 as compromise penalty for having violated Revenue Regulations No. 7-92. cd It appears that in December, 1992, you were contracted by Philippine Commercial International Bank (PCIB) to undertake the general overhauling, adjustment and replacement of worn-out parts of the latter's Hasler Documentary Stamp Metering Machine Model F-88 Serial No. 26959; that you were paid by PCIB the total amount of P4,493.00 for your services and costs of the parts replaced; that you failed to file a written request and secure the approval of the BIR Regional Director of Revenue Region No. 4-B2, Makati, before you undertook the repair of said documentary stamp metering machine, in violation of Section 5 of Revenue Regulations No. 7-92 which provides that whenever a metering machine is defective and repairs have to be undertaken, a written request for repairs shall be prepared by the taxpayer/user and submitted to the Collection Branch of the Revenue Region concerned; and that as a consequence of said violation, the documentary stamp metering machine in question is now being held in this Office and the amount of P200,000.00 is proposed to be imposed against you. You stated that your violation of Revenue Regulations No. 7-92 was unintentional and moreover, you cannot afford to pay the proposed compromise penalty of P200,000.00 because you are a very small company. In reply, please be informed that the criminal penalty imposable for violation of any provision of the National Internal Revenue Code or any regulation of the Department of Finance for which no specific penalty is provided by law, is a fine of not more than P1,000.00 or imprisonment of not more than six (6) months or both. (Section 274, Tax Code) On the other hand, the suggested compromise penalty in lieu of criminal prosecution is also P1,000.00, pursuant to Revenue Memorandum Order No. 1-90 dated January 4, 1990. It is noted that Revenue Regulations No. 7-92 do not prescribe any specific penalty for the violation of any of its provisions; hence, the proposed compromise penalty of P200,000.00 is utterly baseless. Accordingly, your offer to pay the amount of P1,000.00 as compromise penalty for having violated Revenue Regulations No. 7-92 is hereby accepted. Since you have already paid the said amount, your case is now closed and terminated. This will also serve as your authority to secure the release of PCIB's Hasler Documentary Stamp Metering Machine Model F-88 Serial No. 26959. Very truly yours, JAIME M. MAZA Assistant Commissioner (Legal Service)