Submission of Revised Form of General Control Ledger and Updates of Delinquent Accounts

April 15, 2013 OPERATIONS MEMORANDUM NO. 003-13 TO : ACIR, Large Taxpayers Service ACIR, Enforcement Service ACIR, Legal Service ACIR, Collection Service Chief, Large Taxpayers Collection Enforcement Division Chiefs, Large Taxpayers Audit Division 1 to 3 Chiefs, Excise Large Taxpayers Audit Division 1 and 2 Chiefs, Large Taxpayers Division Makati and Cebu All Chiefs, Offices under the Enforcement Service Chief, Law and Legislative Division Chief, Appellate Division Chief, Prosecution Division Chief, Litigation Division Chief, Accounts Receivable Monitoring Division All Regional Directors All Revenue District Officers All Chiefs, Regional Collection Divisions All Chiefs, Regional Assessment Divisions All Chiefs, Regional Legal Divisions All Chiefs, Special Investigation Divisions All Other Concerned Revenue Officials and Employees SUBJECT : Submission of Revised Form of General Control Ledger and Updates of Delinquent Accounts The handling of Accounts Receivable/Delinquent Accounts (AR/DAs) of the Bureau is a very crucial function and this is the primary reason for the development of the Accounts Receivable Management System (ARMS). The ARMS was intended to provide assistance to offices and officials handling AR/DAs to accurately account their respective AR/DA inventory, monitor the actions taken on the AR/DA cases from the time these were created until the same are closed, track their movement from one office to another, and automatically generate the required reports thereon on a timely manner. Considering that the aforesaid system is still in the pilot stage and not yet deployed to all concerned offices nationwide, the manual accounting and tracking of the cases, as well as the preparation of the requisite reports related to AR/DAs could not be dispensed with. Under the present procedure of accounting and tracking AR/DAs, all concerned Offices handling AR/DAs are required to submit General Control Ledger (GCL) monthly, including updates on the AR/DAs. These reports are the source of information stored in the database of AR/DAs being maintained in excel file by the Accounts Receivable Monitoring Division (ARMD), formerly called Collection Enforcement Division (CED). Hence, the submission of inaccurate reports and/or non-submission/late submission of the prescribed reports by the concerned offices will result to distortions of the data in the AR/DA database being maintained by the said Office. In view thereof, this Operations Memorandum is issued to: 1. Remind all Offices required to submit on time the GCL report and the Updates on Delinquent Accounts. Otherwise, administrative sanctions shall be imposed either for the habitual delays in the submission thereof or the non-submission of the aforesaid reports. 2. Reiterate the need for the submission of the GCL reports by Offices which are not directly involved in the collection of tax arrears, but have in their possession AR/DA case for whatever appropriate action such as resolution of factual or legal issues raised during the enforcement of collection proceedings, in order to provide an accurate and timely information to internal and external stakeholders on AR/DAs handled by the Bureau as of any given time. EcIDaA 3. Require every Office handling AR/DA cases to submit the GCL report, including updates of delinquent accounts, in hard and soft copies every 15th day following the close of the month, using the revised GCL format (Annex "A") and Updates on Delinquent Accounts (Annex "B"). In the event that during the given month, there is no movement in the AR/DA cases, the GCL report shall still be submitted, reflecting therein the same information as of the beginning and ending of the given month, with notation "No updates during the month". The use of the revised formats shall start with the GCL report ending April, 2013, but for those Offices that have not yet submitted their reports for the month of March 2013 and prior months, the use of the revised formats is already required. Strict compliance herewith is hereby enjoined. (SGD.) KIM S. JACINTO-HENARES Commissioner Bureau of Internal Revenue ANNEX A-1 Guidelines in Accomplishing the General Control Ledger Report 1. The beginning inventory shall be the ending inventory of the immediately preceding month. 2. In order to determine the number of Accounts Receivable/Delinquent Accounts (ARs/DAs) to be reflected in each of the sub-classification as to source of ARs/DAs, namely: 1) AR/DA arising from the issuance of Final Assessment Notice; 2) AR/DA arising from unpaid second installment; 3) AR/DA arising from unpaid dishonored check; and 4) AR/DA arising from unpaid tax due per return filed, it is necessary that prior evaluation be conducted in each of the AR/DA inventory on hand at the time of the preparation of the report. With regards to the age of the account, the guide for each type of AR according to source is as follows: HCaDIS 2.1 For AR emanating from the issuance of Final Assessment Notice the counting of age shall start after the lapse of thirty (30) days from the date of receipt of the FAN by the taxpayer, or in the absence of date of receipt, the date of mailing of FAN, or in the absence of the two dates, the date of FAN. 2.2 For AR arising from unpaid second installment the counting of the age of account shall be from the due date for the payment of the second installment of income tax. 2.3 For AR arising from unpaid dishonored check the counting of the age of the account shall start from the date when the check was returned by the bank to the concerned Revenue District Office. 2.4 For AR arising from unpaid tax due per return the counting of the age of the account shall start from the time of filing the return where such tax due was reflected. 3. Of the total ending inventory on hand as of the end of any given month, determine how many in each category and in each age group can be considered "suspense AR" and "AR for write-off". Detailed list of ARs considered "suspense" and "for write-off" must also be prepared with corresponding reasons for classifying them as either "suspense" or "for write-off". However, if the AR cases recommended for write-off have already been approved and subsequently issued Authority to Cancel Assessment (ATCA), the same shall be reflected under the credit column of the GCL. The criteria for determining AR as "suspense" or "for write-off" are provided in a separate revenue issuance; thus, in the meantime that such revenue issuance is not yet approved, there shall be no figure to be reflected under the "suspense" or "for write-off" column of the GCL report. ANNEX A General Control Ledger Monthly List of New Accounts Added Monthly List of Transfer - In Accounts Monthly List of Transfer - Out Accounts Monthly List of Accounts Cancelled by ATCA Monthly List of Accounts Paid ANNEX B Updates of Delinquent Accounts/Unpaid Second Installments and Unredeemed Dishonored Checks Being Handled