Implementing Further DOF Department Order No. 23-01

October 22, 2001 REVENUE ADMINISTRATIVE ORDER NO. 03-01 SUBJECT : Implementing Further Department OrderNo.23-01 dated October 5, 2001 That Provides for the Rules on the First Paragraph of Section 4 of the TaxCodeof 1997 TO : All Internal Revenue Officers and Others Concerned I. OBJECTIVES To identify the responsibilities of revenue officers and to provide for the procedure for the proper implementation of the first paragraph of Section 4 of the Tax Code of 1997, as implemented by Department Order No. 23-01, that vests in the Secretary of Finance the power to review the interpretation of the Tax Code and other tax laws by the Commissioner of Internal Revenue. To provide for the certification fees to be paid to the Bureau of Internal Revenue by the taxpayers seeking review of rulings that interpret the provisions of the Tax Code and other tax laws. II. SCOPE This Revenue Administrative Order (RAO) covers rulings issued by the Commissioner of Internal Revenue (Commissioner) and by officers (delegatee/s) with duly delegated powers to issue rulings on behalf of the Commissioner under pertinent issuances such as, but not limited to the Commissioner's Memoranda dated June 21, 2000 and October 26, 2000; Revenue Memorandum Order (RMO) No. 75-99; Revenue Memorandum Circular (RMC) No. 10-2001, RMC Nos. 3-2001 and 2-2001, as supplemented by RMC No. 14-2001; and, RMC No. 39-2001. Particularly, these rulings refer to those issued by the Commissioner, or by his Deputy Commissioner for Legal and Inspection Group, Assistant Commissioner for Legal Service, or by the Regional Directors, as may be appropriate. This RAO does not cover, however, disputed assessments, refunds of internal revenue taxes, fees or other charges, and penalties imposed in relation thereto, or other matters arising under the Tax Code or other laws or portions thereof administered by the Bureau of Internal Revenue. In these instances, the Court of Tax Appeals has the exclusive appellate jurisdiction pursuant to the second paragraph of the same Section 4 of the Tax Code of 1997. Neither shall this RAO apply to rulings that are deemed void ab initio because they contradict duly issued Revenue Regulations, Revenue Memorandum Orders, Revenue Memorandum Rulings, and Revenue Memorandum Circulars. III. PROCEDURE 1. Within thirty (30) days from the date of receipt of the adverse ruling of the Commissioner, the affected taxpayer may seek the review of the ruling by the Department of Finance. In all cases, the adverse ruling that can be brought to the Department of Finance shall only be the final adverse decision of the Commissioner. In the case of rulings by the Commissioner's delegatees, the taxpayer shall exhaust administrative remedies within the Bureau of Internal Revenue by filing a letter of reconsideration addressed to the Commissioner, but filed with the Office of the Assistant Commissioner for Legal Service (ACIR-LS) in the case of adverse rulings decided by the Revenue Regional Directors or with the Office of the Deputy Commissioner of Internal Revenue for Legal and Inspection Group (DCIR-LIG) in the case of adverse rulings decided by the ACIR-LS within fifteen (15) days from receipt of an adverse ruling, before requesting for a review by the Secretary of Finance; 2. File with the Office of the Commissioner, for endorsement to the ACIR-LS, a copy of the request for review of the Ruling; 3. Request from the ACIR-LS for an authenticated and certified true copy of the complete docket or records on file. 4. Pay the certification fee to the authorized agent bank having jurisdiction over the taxpayer or the place of business of the taxpayer, using Payment Form 0605; 5. Present to the ACIR-LS the original copy of the official receipt that evidences payment of the certification fee, and submit a photocopy thereof to form part of the docket or records of the case; 6. Within five (5) days from the date of payment of the certification fee, the ACIR-LS shall instruct the Division Chief of the Law Division or the International Tax Affairs Division, as the case may be, for each and every page of the records of the case, sequentially numbered, to be photocopied, including a copy of the subject BIR Ruling, and for the complete set to be stamped and signed by the concerned Division Chief to be an authentic and true copy of the original and complete records on file. In the case of rulings made by the Revenue Regional Directors and finally decided by the Commissioner to be adverse to the taxpayer, the ACIR-LS shall certify and authenticate the duplicate copy of the records of the case; 7. The appropriate office shall also prepare the endorsement letter of the Commissioner of Internal Revenue (Annex "A"), which letter shall be signed by the Assistant Commissioner for Legal Service, who is hereby designated as the Commissioner's duly authorized representative. In this regard, the ACIR-LS shall submit to the Commissioner, copy furnished the ODCIR-LIG, a monthly report of cases appealed and certifications made; 8. The authenticated and certified true copy of the docket or records of the case, including the endorsement thereof to the Secretary of Finance, through the Revenue Operations Group, shall be released to the holder of the original copy of the official receipt evidencing payment of the certification fee. EIDTAa IV. TAXPAYER'S REQUEST FOR REVIEW BY THE SECRETARY OF FINANCE A taxpayer who receives an adverse ruling from the Commissioner of Internal Revenue may, within thirty (30) days from the date of receipt of such ruling, seek its review by the Secretary of Finance, either by himself/itself or through his/its duly accredited tax agent or representative. The request for review shall be in writing and under oath, and must: a) be addressed to the Secretary of Finance and filed with the Revenue Operations Group, Department of Finance, DOF Building, BSP Complex, Roxas Boulevard corner Pablo Ocampo Street, City of Manila; b) contain the heading "Request for Review of BIR Ruling No. ______": c) allege and show that the request was filed within the reglementary period; d) allege the material facts upon which the ruling was requested; e) state that exactly the same set of facts were presented to the BIR; f) define the issues to be resolved; g) contain the facts and the law relied upon to dispute the ruling of the Commissioner; h) be signed by or on behalf of the taxpayer filing the request for review, provided that, only those lawyers engaged by the taxpayer and/or tax agents accredited by the BIR may sign on behalf of the taxpayer; i) indicate the Taxpayer Identification Number (TIN) of the taxpayer, j) be accompanied by a copy of the Commissioner's challenged ruling; k) contain a statement of the Office of the Commissioner of Internal Revenue, indicating that a copy of the request for review of the ruling was received by the Commissioner's Office and; i) specifically state that the taxpayer does not have a pending assessment or case in any court of justice where the same issues are being considered. Furthermore, the taxpayer must, at the time of filing of the request for review, submit a duplicate copy of the records on file with the BIR pertaining to his request, which set of records must be authenticated and certified by the BIR. V. CERTIFICATION FEE For this purpose, the requesting taxpayer shall pay a certification fee in the amount of ten pesos (P10.00) for every page of the complete records on file that shall be reproduced and certified to be a true and authentic copy thereof. Any and all amounts paid as certification fee are non-refundable and shall be forfeited in case the taxpayer finally decides not to seek a review by the Secretary of Finance. VI. EFFECTIVITY CLAUSE This Order shall take effect immediately. (SGD.) RENE G. BAEZ Commissioner of Internal Revenue