Regulations Governing the Payment of Rewards to Informers

May 12, 1931 DOF REGULATIONS NO. 068-31 1 SUBJECT : Regulations Governing the Payment of Rewards to Informers TO : All Internal Revenue Officers and Others Concerned SECTION 1. Promulgation. In accordance with the provisions of sections 79 (B) and 2735 of the Administrative Code, as repealed and recreated by Act No. 3734 of the Philippine Legislature, the following regulations relative to the payment of rewards to informers who give information leading to the arrest and conviction of violators of the internal revenue laws or to the collection of delinquent internal revenue taxes are hereby promulgated, and shall be known as Regulations No. 68, or the "Regulations governing the payment of rewards to informers." SECTION 2. Persons Entitled to Reward. Any person, except an internal revenue agent or officer or other public official, who voluntarily gives definite information leading to the arrest and conviction of anyone violating any penal provision of the internal revenue laws or to the collection of delinquent internal revenue taxes shall be entitled to a reward. All officers and employees in the service of the Government, Insular, provincial, or municipal, are not entitled to any reward and are hereby strictly enjoined not to conspire or collude with another or others with a view to permitting the latter to collect a reward or to participate directly or indirectly in any reward granted by the Bureau of Internal Revenue. The officers and employees of the Bureau of Internal Revenue and all the deputies of the Collector of Internal Revenue in the collection of internal revenue taxes and the enforcement of the internal revenue laws shall not be entitled to any reward even if they become informers until after one year from their separation from the service. In this connection, the attention of all internal revenue officers is invited to the provisions of section 2714 of the Administrative Code. SECTION 3. Information Necessary for a Reward. To be entitled to a reward under the law, the informer voluntarily must give the information in writing to the Collector of Internal Revenue or to any other internal revenue officer. In order to come within the purview of the law, the information communicated must have led to the conviction of any violator of the internal revenue laws or to the collection of delinquent internal revenue taxes, so that no reward shall be granted where the information is received after the discovery by the Collector of Internal Revenue or by any other internal revenue officer or employee of the Bureau of Internal Revenue of the violation or delinquency indicated, even if the exact nature or extent of such violation or delinquency be unknown at the time. The information must also be definite, with a specification of the name and address of the taxpayer reported, the specific nature of the violation committed or delinquency incurred, the manner and form and other circumstances surrounding the violation, the approximate date or period when the violation was committed or delinquency was incurred, and the names and addresses of witnesses, if any, who may know or are familiar with the facts of the case. Moreover, the information should be accompanied by concrete evidence showing the existence of the violation or delinquency, or, if this cannot be done, by a statement of the source of such evidence. If possible, the informer should specify the particular entries or statements which are false or fraudulent, the books or records in which they are found, or if the books or records of the taxpayer containing the false entries are concealed, the place where such books or records may be found. Furthermore, the information given must have been secured by the informer personally or through any other person or persons who are not in any way connected with the revenue service. Information regarding mistakes committed in good faith by taxpayers in keeping their books of account, such as errors in addition or failure, through oversight or any other justifiable reason, to enter the receipts in the record book for a number of days, will not justify the payment of any reward. Neither will information about delinquencies when they are a matter of record in the Bureau of Internal Revenue or in the office of any internal revenue officer be considered for any reward. TaCDcE The Collector of Internal Revenue will determine in each case whether or not the information given justifies the payment of the rewards mentioned herein. All information, verbal or written, received from informers by the Collector of Internal Revenue or by any other internal revenue officer shall be treated as strictly confidential and used exclusively for internal revenue purposes. SECTION 4. Amount of Reward. Informers who comply with the conditions prescribed in the preceding section are entitled to a reward in a sum equivalent to 50 per centum of the fine imposed by the court and collected from the offender. However, in cases where the offender has chosen to compromise his violation of the law by paying a certain sum of money acceptable to the Collector of Internal Revenue, the informer shall be entitled to 50 per centum of such compromise, not including the taxes proper due the Government. Where the information given has led to the discovery of any delinquency or fraud in the payment of any internal revenue tax, for which the law imposes any surcharge, interest, or statutory penalty, the informer shall also be rewarded in an amount equal to 50 per centum of the total amount of such surcharge, interest, or statutory penalty as may have been actually collected from the delinquent taxpayer. Let it be supposed that, as a result of information given by an informer, the following taxes have been assessed: Merchants' sales tax due P200.00 Twenty-five per centum surcharge 50.00 Compromise for failure to file a tax return 20.00 Total 270.00 In the above example, if the total amount of P270 has been collected from the taxpayer, the informer shall receive 50 per centum of the total amount of the surcharge and compromise paid, excluding the regular taxes due, or P35. Where the amount paid by the delinquent taxpayer or collected by the Government, either through legal action or through distraint and levy proceedings, is not sufficient to cover all the taxes and statutory penalties due from the taxpayer, the informer shall receive 50 per centum of the amount so paid or collected, but in no event shall the informer receive more than 50 per centum of the total amount of surcharge, interest, or statutory penalty assessed against the delinquent. Thus, in the example given above, if out of the total amount of P270 representing the tax, surcharge, and compromise due, only the sum of P100 has been paid by the taxpayer or collected by the Government, the informer will not be entitled to one-half of P100 but to the sum of P35 only. If the amount collected in the given case is only P50, the informer will be entitled only to one-half of it, or P25, and not P35. SECTION 5. Procedure of Investigation and Payment of Reward. Whenever information regarding any violation of the internal revenue laws or any internal revenue tax delinquency is received by any internal revenue officer, he shall immediately acknowledge its receipt in writing, clearly note thereon in ink the date and hour of his receipt thereof, and forward the original to the Collector of Internal Revenue at the earliest opportunity. The internal revenue officer receiving the information shall forthwith conduct the necessary investigation and submit his findings together with his recommendation to the Collector of Internal Revenue. Where the information is received by a provincial treasurer or any of his deputies, a copy of the same shall at once be furnished the supervising agent concerned who shall immediately conduct or cause to be conducted the necessary verification of the information received. SacDIE After the final settlement of the case, the Collector of Internal Revenue will determine whether or not the informer is entitled to any reward, and, in the affirmative case, will order the corresponding warrant to be made in his favor. It is to be understood that in cases where the taxpayer effects payment of the taxes and surcharges or any other statutory penalties imposed by the internal revenue laws under protest, no reward shall be given the informer until after the protest shall have been withdrawn, the right to recover barred by statute, or the legality of the assessment or collection sustained by the courts. If there are two or more informers in a given case, the first to submit the required information will be entitled to the reward. SECTION 6. Violation of These Regulations. Any public official found to have violated any provision of these regulations shall be dealt with according to law. SECTION 7. Effective Date. These regulations shall take effect upon their promulgation in the Official Gazette. Manila, May 12, 1931. MIGUEL UNSON Secretary of Finance Footnotes 1. Promulgated June 20, 1931, XXIX Off. Gaz., 74, page 2138.