Organization and Functions of the Legal Service Including the Divisions Under it Down to Section Level

February 9, 2009 REVENUE ADMINISTRATIVE ORDER NO. 011-09 SUBJECT : Organization and Functions of the Legal Service Including the Divisions Under it Down to Section Level TO : All Internal Revenue Officials and Employees I. OBJECTIVE: This Order defines the organization and functions of the Legal Service including its divisions and their sections pursuant to the Rationalization Plan of the Bureau. II. ORGANIZATION: The Legal Service shall be under the direct supervision of the Deputy Commissioner for Legal Group. It shall be headed by an Assistant Commissioner and shall be composed of the following divisions with their respective sections: A. Law Division 1. Direct Taxes Section 2. Indirect Taxes Section B. Appellate Division 1. Protest and Appeal Section 2. Tax Credit/ Refund Section C. International Tax Affairs Division 1. Tax Treaty Policy and Tax Advisory Section 2. Tax Treaty Implementation and Exchange of Information Section D. Legislative and Research Division III. FUNCTIONS: LEGAL SERVICE 1. Performs staff, advisory and consultative functions relative to the preparation and interpretation of revenue laws, implementing regulations/issuances, decisions on administrative protests involving questions of law and/or fact and claims for tax credit/refund of taxes erroneously paid, tax treaties, international tax policies and agreements and other legal matters; EDcIAC 2. Formulates policies and administers work programs, standards, guidelines and procedures including forms relative to the abovementioned functions; 3. Provides policy guidance and operational directions to all divisions under the Service relative to the abovementioned functions; 4. Reviews for the Commissioner's approval all decisions, rulings and opinions on legal questions, which are of first impression. No case involving legal questions which are of first impression shall originate from and be issued by the Regional Director; 5. Serves as repository of all original agreements or contracts entered into by the Bureau except administrative contracts; 6. Administers the Legal Information System; 7. Monitors and coordinates the activities of the Legal Divisions of the Regional Offices pertaining to law and appellate works; CHIEDS 8. Coordinates with proper offices in the implementation of the abovementioned functions; 9. Monitors, evaluates and improves programs and activities under the responsibility of the Service; 10. Reviews, recommends and/or approves all reports and other actions of the divisions under the Service; 11. Consolidates and/or prepares prescribed reports for submission to the offices concerned; and 12. Performs such other related functions as may be assigned. A. Law Division 1. Formulates policies, work programs, standards, guidelines and procedures including forms for the conduct of legal operations in the Bureau including the interpretation of the provisions of the National Internal Revenue Code (NIRC) of 1997 and other laws related thereto, and/or all laws necessary for the operations of the Bureau; 2. Submits to Legal Service all signed/approved official rulings and revenue issuances prepared by the Division for the regular updates of the Legal Information System; 3. Coordinates the uniform application of tax laws and regulations; 4. Coordinates with proper offices in the implementation of the abovementioned functions; 5. Prepares prescribed reports for submission to the offices concerned; cIaHDA 6. Prepares revenue issuances relative to the abovementioned functions; and 7. Performs such other related functions as may be assigned. 1. Direct Taxes Section 1.1. Prepares drafts of all rulings and opinions on legal issues of first impression involving the interpretation of the NIRC of 1997 and other laws related thereto; 1.2. Acts on requests for tax exemption under the Tax Code and other tax laws for cases falling under its jurisdiction; 1.3. Prepares digest of rulings and opinions and codifies the same for dissemination to the public; 1.4. Interviews and administers oath to informers on their filing of complaints against tax evaders and processes claims for informer's reward and initiates action for the payment thereof if the informer is entitled thereto; 1.5. Evaluates and reviews applications for accreditation as donee institution; HaIESC 1.6. Reviews contracts and prepares memorandum to clarify issues arising from contracts; and 1.7. Performs such other related functions as may be assigned. 2. Indirect Taxes Section 2.1. Prepares drafts of all rulings and opinions on legal issues of first impression involving the interpretation of the NIRC of 1997 and other laws related thereto; 2.2. Acts on requests for tax exemption under the Tax Code and other tax laws for cases falling under its jurisdiction; 2.3. Prepares digest of rulings and opinions and codifies the same for dissemination to the public; 2.4. Interviews and administers oath to informers on their filing of complaints against tax evaders and processes claims for informer's reward and initiates action for the payment thereof if the informer is entitled thereto; 2.5. Evaluates and reviews applications for accreditation as donee institution; HcDSaT 2.6. Reviews contracts and prepares memorandum to clarify issues arising from contracts; and 2.7. Performs such other related functions as may be assigned. B. Appellate Division 1. Formulates policies, work programs, standards, guidelines and procedures including forms relative to administrative appeals and protests of taxpayers involving questions of law and/or fact and claims for credit/refund of taxes erroneously or illegally collected; 2. Resolves protests and requests for reinvestigation/reconsideration whether or not the protest is in accordance with the provisions of Section 228 of the National Internal Revenue Code (NIRC), as amended, and its implementing regulations; or whether or not the protest involved a question of fact or of law or both on cases falling under its jurisdiction; 3. Issues notices of conference hearing and subpoena witnesses when necessary for the resolution of pending protested tax cases and claims for tax credit/refund falling under its jurisdiction; 4. Submits to Legal Service all administrative decisions of the Commissioner and approved revenue issuances prepared by the Division for the regular updates of the Legal Information System; 5. Prepares digest of administrative decisions of the Commissioner; 6. Conducts studies and researches relative to the abovementioned functions; 7. Coordinates with proper offices in the implementation of the abovementioned functions; 8. Prepares prescribed reports for submission to the offices concerned; 9. Prepares revenue issuances relative to the abovementioned functions; and 10. Performs such other related functions as may be assigned. 1. Protest and Appeal Section 1.1. Acts on protests and/or appeals of taxpayers relative to protested assessment involving questions of law and/or fact for cases falling under its jurisdiction; 1.2. Prepares administrative decisions on protested tax cases involving questions of law and/or fact, and digest of the said decisions; DHITcS 1.3. Decides protests and appeals of taxpayers submitted to CIR relative to assessment cases involving questions of law and/or fact decided upon in the Regional Office; 1.4. Evaluates requests for reconsideration of assessments and recommends to the proper office, the reinvestigation of contested or disputed assessments if the arguments adduced by the parties so warrant; 1.5. Prepares notices of conference hearing and subpoena witnesses when necessary for the resolution of protested tax cases falling under its jurisdiction; 1.6. Gathers official administrative decisions/actions on protested cases necessary in updating the legal database; and 1.7. Performs such other related functions as may be assigned. 2. Tax Credit/Refund Section 2.1. Prepares guidelines and procedures on claims for tax credit/refund of taxes and penalties erroneously or illegally collected; 2.2. Processes claims for tax credit/refund of taxes and penalties erroneously or illegally collected at the time of payment. Claims for tax credit/refund that necessitate tax audit shall be processed by the appropriate office in the region/National Office (NO); 2.3. Prepares notices of conference hearing and subpoena witnesses when necessary for the resolution of claims for tax credit/refund falling under its jurisdiction; 2.4. Refers to the appropriate office/s claims for tax credit/refund which are directly filed by the taxpayers with the Appellate Division prior to normal audit of the return; 2.5. Gathers official decisions on taxpayers' claims for tax credit/refund necessary to update the legal database; and 2.6. Performs such other related functions as may be assigned. C. International Tax Affairs Division 1. Formulates policies, work programs, standards, guidelines and procedures including forms for the proper and effective implementation of tax treaties and other international tax agreements; 2. Administers and implements the mutual agreement and exchange of information provisions of the tax treaty; 3. Coordinates the uniform application of international tax laws, revenue regulations and court decisions; 4. Monitors and evaluates the implementation of activities and works related to abovementioned functions; ScaCEH 5. Submits to the Legal Service all approved rulings and revenue issuances prepared by the Division relative to international matters for the regular updates of the Legal Information System; 6. Conducts studies and researches relative to the abovementioned functions; 7. Coordinates with proper offices in the implementation of the abovementioned functions; 8. Prepares prescribed reports for submission to the offices concerned; 9. Prepares revenue issuances relative to the abovementioned functions; 10. Performs such other related functions as may be assigned. 1. Tax Treaty Policy and Tax Advisory Section 1.1. Develops, assesses and monitors Philippine international tax policies, tax treaties and other international agreements related to taxation; 1.2. Initiates studies on the actual contribution of tax treaties in attracting foreign investment vis--vis the extent of the taxing rights and amount of taxes forgone; 1.3. Recommends amendments to existing tax treaties and international tax agreements; aCcSDT 1.4. Prepares rulings, comments and opinions on questions involving the interpretation of the provisions of tax treaties and other international tax agreements and international organizations; 1.5. Processes VAT exemption requested by foreign embassies under the principle of reciprocity; 1.6. Issues Tax Exemption Certificates to qualified ADB personnel; 1.7. Conducts studies and researches to prepare the Bureau for the changing environment in the international tax arena; 1.8. Provides comments and recommendations on proposed revenue issuances and revenue procedures affecting international tax matters; 1.9. Plans, supervises and coordinates the negotiations, conclusion, signing and ratification of tax treaties as well as international tax meetings, seminars and conferences; 1.10. Coordinates the visit of foreign dignitaries, tax authorities and other visitors (foreign and local) desiring to be briefed on international tax matters; 1.11. Advises government entities, tax practitioners, taxpayers and other personnel of the BIR regarding international taxation and provides them with materials on such agreements and related revenue issuances; and 1.12. Performs such other related functions as may be assigned. 2. Tax Treaty Implementation and Exchange of Information Section 2.1. Evaluates and processes for approval, tax treaty relief applications and monitors trends in the availment of the relief; 2.2. Processes certificate of residency of residents earning income abroad; 2.3. Coordinates the exchange of information and mutual agreement procedures for all existing tax treaties; 2.4. Secures and provides pertinent information to and from tax treaty partners pursuant to the Exchange of Information provision of the tax treaty; 2.5. Implements rules and regulations for the effective enforcement of Philippine tax laws and tax treaties as they affect international taxpayers ( e.g. , international carriers and their agent corporations, multinationals and overseas contractors); 2.6. Conducts verification on: 2.6.1. specific requests for information from tax treaty partners 2.6.2 automatic or spontaneous information received from tax treaty partners 2.7. Recommends BIR position relative to the proposed tax provisions in international agreement; 2.8. Recommends reformulation of tax provision/s in international agreements under consideration; TIaCcD 2.9. Coordinates with/attends inter-agency meetings of other government agencies on international tax matters; 2.10. Studies, recommends and implements measures/issuances affecting the monitoring of international transactions ( e.g. , advance pricing agreements, etc.); 2.11. Prepares documents relative to funding requirements/provision for tax treaty negotiations; and 2.12. Performs such other related functions as may be assigned. D. Legislative and Research Division 1. Formulates policies, work programs, standards, guidelines and procedures including forms relative to the preparation of drafts of revenue regulations, circulars and other revenue issuances required to implement the Tax Code, including amendments thereto and other special tax laws administered by the Bureau for submission to the DOF; 2. Serves as clearing house for Revenue Regulations and other issuances involving legal matters or with tax implications prepared by other offices of the Bureau; 3. Coordinates with proper offices relative to the required inputs/data/information necessary in the preparation or review of the revenue regulations; ISHaTA 4. Attends meetings with taxpayers/organizations/professional associations relative to the preparation/exposure of proposed revenue regulations; 5. Coordinates with Strategic Management Service relative to economic research and possible revenue impact of a proposed bill or legislation; 6. Prepares comments and recommendations, after conducting studies and research, if necessary, on any proposed legislative measure that will affect internal revenue collection and administration or which may have tax implications; 7. Attends Congressional/Senate hearings relative to proposed legislative measures with internal revenue tax implications; 8. Coordinates with DOF relative to comments/recommendations on proposed legislative measures with internal revenue tax implications; DTcASE 9. Submits to Legal Service, all approved revenue issuances prepared by the Division for regular updates of the Legal Information System; 10. Coordinates with proper offices in the implementation of the abovementioned functions; 11. Prepares prescribed reports for submission to the offices concerned; and 12. Prepares revenue issuances relative to the abovementioned functions; 13. Performs such other related functions as may be assigned. IV. REPEALING CLAUSE: All issuances or portions thereof not consistent with the provisions of this Order are hereby repealed or amended accordingly. V. EFFECTIVITY: This Order shall take effect immediately. (SGD.) SIXTO S. ESQUIVIAS IV Commissioner of Internal Revenue Approved: (SGD.) MARGARITO B. TEVES Secretary of Finance