Statement of Functions of the Revenue Region, Its Branches and the Revenue District Office, Including Their Respective Units

February 3, 1987 REVENUE ADMINISTRATIVE ORDER NO. 03-87 SUBJECT : Statement of Functions of the Revenue Region, Its Branches and the Revenue District Office, Including Their Respective Units TO : All Revenue Officials and Others Concerned I. Objectives : This Order aims to implement more effectively the Reorganization of the Bureau under Executive Order No. 608 by defining, delineating and expanding the functions of the Revenue Region, its Branches, the Revenue District, including their respective units, pertinent to the implementation and enforcement of internal revenue laws and regulations within the regions as promulgated by the Commissioner . cd II. Organization : The Revenue Regional Office shall be composed of branches and units and shall have jurisdiction over Revenue District Offices under its area of responsibility . aisa dc The Fiscal Operations Unit is hereby elevated into a branch for a more effective and efficient performance of regional budgeting and accounting functions. The Special Investigation Unit shall remain under the supervision of the Regional Director, for operational and administrative purposes. The Revenue District Office shall consist of several units under it to carry out enforcement activities in provinces and municipalities. Each unit of the Revenue Region and Revenue District Office shall be composed of an appropriate number of personnel based on the Bureau's Staffing Pattern. Thus, the following shall be the organizational set-up of the Revenue Region down to unit level: A. Office of the Regional and Assistant Regional Directors 1. Assessment Branch a. Review and Evaluation Unit b. Office Audit Unit c. Processing, Administrative and Miscellaneous Services Unit 2. Collection Branch a. Receivable Accounts and PO/CR Monitoring Unit b. Collection Enforcement Unit c. Administrative, Records and Miscellaneous Unit 3. Legal Branch a. Litigation Unit b. Law Unit 4. Administrative Branch a. Personnel & Miscellaneous Unit b. General Services Unit c. Records Unit d. Cashiering Unit 5. Fiscal Operations Branch a. Accounting Unit b. Budgeting Unit 6. Special Investigation Unit 7. Tax Assistance Unit B. Office of the Revenue District and Assistant Revenue District Officers 1. Tax Assistance Unit 2. Assessment Unit 3. Collection Unit 4. Administrative Unit 5. Withholding Tax Unit III. Functions : A. Office of the Regional and Assistant Regional Directors a. Implement laws, policies, plans, programs, rules and regulations of the Bureau within the revenue region; b. Administer and enforce internal revenue laws and regulations, including the assessment and collection of all internal revenue taxes, charges and fees within the revenue region; c. Provide economical, efficient and effective service to the people within the revenue region; d. Coordinate with local government units and regional offices of other government bureaus or agencies found within the revenue region; e. Exercise control and supervision over revenue regional officials and employees; f. Initiate the investigation of administrative complaints/charges filed against personnel within the region and designate the investigators for the same; and g. Perform such other related functions as may be provided by law and as may be delegated by the Commissioner. 1. Assessment Branch a. Implement the Tax Audit Program of the Bureau within the revenue region; b. Pre-audit refundable tax returns with purely compensation income filed within the region; c. Investigate returns filed within the region, classified for office audit including refundable tax return declaring mixed income or purely business income in accordance with prescribed procedures; d. Review field and office audit reports of investigation on tax cases (except specific tax cases) including capital gains tax cases per RMO 21-80, except when specifically provided otherwise by the Commissioner of Internal Revenue; e. Coordinate and evaluate the performance and accomplishment of revenue examiners; f. Process, number and classify all types of tax returns for computer processing; g. Prepare reports required by the National Office that are deemed pertinent or necessary for top management information; h. Monitor the issuance of assessment notices and letters of demand on the cases acted upon by their respective offices; and i. Perform such other related functions as may be assigned. 1-a Review and Evaluation Unit a) Evaluate and review all examiners' field and office audit reports on tax cases except fraud, specific tax cases and forward to the National Office for approval all the audit reports that are found to be within the jurisdiction of the National Office (per RMO Nos. 22-80 and 15-85); b) Review all protested cases (i.e, cases not involving legal issues) and report of investigation of tax cases with deficiency assessments and send pre-assessment notice to taxpayer; c) Prepare Transcript of Assessment of tax cases with deficiency assessment for the use as basis of demand letters or assessment notices; d) Compile all information on collection from enforcement and statistical data on gross assessments for submission to the National Office; and e) Perform such other related functions as may be assigned. 1-b Office Audit Unit a) Investigate returns classified for office audit, including refundable tax return declaring mixed income or purely business income in accordance with prescribed procedures; b) Pre-audit refundable tax returns with purely compensation income filed within the region in accordance with prescribed procedures; and cd i c) Perform such other related functions as may be assigned. 1-c Processing, Administrative & Miscellaneous Services Unit a) Process and number all tax returns received before computer processing; b) Receive, release documents and maintain an accurate record of all reports, dockets, correspondence and other documents for action; c) Attend to the administrative needs of the Assessment Branch such as office equipment, supplies, etc; d) Maintain a regional data bank which shall include an index and a master file of all taxpayers in order to monitor those who are delinquent in the payment of their taxes; e) Perform such other related functions as may be assigned. 2. Collection Branch a. Administer, coordinate and enforce the collection activities within the territorial jurisdiction of the revenue region; b. Maintain liaison with the provincial, city and Municipal Treasurers, Register of Deeds and Assessors in its collection efforts; c. Keep and maintain records on deficiency assessment notices, demand letters, etc., necessary for the collection of regional receivable accounts; d. Monitor status of tax assessments until same are collected and cases are closed and filed with the least possible delay; e. Prepare demand letter, assessment notices, Form 40.00 and ATCA (Authority To Cancel Assessment) for tax cases with deficiency assessments per RMO 27-85, as amended; f. Enforce collection by distraint and levy and/or garnishment; g. Maintain, control and keep a register of Payment Orders and confirmation receipts issued to authorized agent banks; h. Prepare, process and collate necessary reports on unvalidated payment orders; and i. Perform such other related functions as may be assigned. 2-a Receivable Accounts and PO/CR Monitoring Unit 2-a-1 Receivable Accounts Group a) Set up the control and accounting of all current receivable accounts above P5,000 but not exceeding P20,000; b) Prepare and send collection letters for delinquent accounts and non-payment orders for Regional accounts of P5,000 to P20,000 to taxpayers concerned; c) Transmit dockets of receivable accounts cases involving over P20,000 to the Collection Enforcement Section for collection through summary remedies; d) Prepare collection reports of the Branch on the BIR Form 12.53 (General Control Ledger) with its supporting papers; e) Prepare demand letters and assessment notices and compute the due interest of tax cases with deficiency assessments based on the Transcript of Assessment; f) Prepare Form 40.00 Report in accordance with existing requirements and furnish same to the Assessment Branch; g) Prepare ATCA (Authority To Cancel Assessment) when an assessment is cancelled or when a previously assessed deficiency tax is reduced as a result of reinvestigation or a reconsideration as requested by the taxpayer; h) Document and transmit protest letters with the corresponding docket to the appropriate office for its resolution; and i) Perform such other related functions as may be assigned. 2-a-2 PO/CR Monitoring Group a) Maintain and control a Register of Payment Orders; b) Maintain and control a Register of Confirmation Receipts issued to authorized agent banks sent by and/or coming from the Collection Office; c) Prepare, process and collate monthly reports of unvalidated Payment Orders; d) Monitor redemption of dishonored checks issued within the region in payment of Payment Orders (POs); and e) Perform such other related functions as may be assigned. 2-b Collection Enforcement Unit a) Prepare, issue, serve and execute Warrants of Distraint and Levy (WDL) and/or Garnishment on delinquent accounts/cases assigned to the region (Regional Accounts - above P5,000 but not exceeding P20,000) and maintain a Register Book for control purposes in collection enforcement; b) Supervise and coordinate the functions of revenue seizure agents and other collection personnel serving warrants (WDLs) and undertaking other processes on collection through summary remedies; c) Control and administer the seizure of forfeited properties and supervise public biddings of properties placed under distraint; d) Coordinate and maintain liaison with other Government Offices such as the Register of Deeds, City Assessors, etc. to insure effective hold on real properties placed under levy; and e) Perform such other related functions as may be assigned. 2-c Administrative, Records and Miscellaneous Unit a) Record all correspondences received and released; b) Receive and distribute collection reports to the corresponding designated unit; c) Maintain a systematic record of correspondences, dockets and other documents and monitor the flow of such from Collection Branch to other branches in the region; d) Process and issue tax clearances except capital gains tax clearance, estate tax clearances and clearances for the renewal of franchises of motor vehicles; e) Attend to the administrative needs of the Collection Branch such as office equipment, supplies, etc.; and f) Perform such other related functions as may be assigned. 3. Legal Branch a. Make representations in court and serve as the legal counsel in cases involving assessment and collection of internal revenue taxes, fees, etc. within the region; b. Issue legal opinions based on applicable laws, decrees and precedents and elevate to the National Office cases for rulings or opinions which involve national policies or where there are no established precedents; aisa dc c. Evaluate the evidences of any case before judicial action, civil or criminal, is instituted and prepare corresponding pleadings and memoranda; d. Assist the Provincial or City Fiscals or Special Prosecutors of the Ministry of Justice in criminal prosecution of violators of the NIRC and related statutes including revenue officials and employees criminally charged in connection with the performance of their duties; e. Conduct the formal investigation, hearing and prosecution of administrative cases which were initiated/assigned by the Regional Director against any subordinate personnel in the Region in accordance with the prescribed rules; f. Process and refer claims for refunds, tax credits and informers' reward to the National Office; and g. Perform such other related functions as may be assigned. 3-a Litigation Unit a) Evaluate validity of assessment, weight and/or availability of necessary evidence, for cases referred to it for judicial action; b) Prepare pleadings in collection cases filed in Court; c) Coordinate/consult with the Solicitor General's Office for appropriate action in court cases; d) Attend to the trial of civil or criminal cases and recommend to the city fiscal and/or the provincial fiscal the prosecution of cases relative to violations of the Tax Code; e) Secure necessary evidence or assemble witnesses for hearings and recommend termination of cases not legally justifiable; and f) Perform such other related functions as may be assigned. 3-b Law Unit a) Answer queries of taxpayers involving tax problems on legal interpretation and recommend reconsideration of assessment, or their total withdrawal if warranted by the circumstances; b) Study the legality or propriety of resorting to the summary remedies in the collection of taxes; c) Process and refer claims for refunds, tax credits and informers' reward to the National Office; d) Recommend to the regional director the issuance of regional memorandum, circulars or orders in connection with the legal aspects on assessment and collection of taxes; and e) Perform such other related functions as may be assigned. 4. Administrative Branch a. Provide the administrative services of the revenue region which includes: a-1) Recruitment and promotion of personnel based on the delegation of authority to the Regional Director under RMO 23-80 as amended by RMO 34-83; a-2) Preparation of reports on attendance, personnel strength, performance evaluation, etc.; a-3) Supervision of general services in the region, such as security and janitorial services, mailing, printing and cleanliness of environment; a-4) Safekeeping and distribution of supplies, equipment and forms; a-5) Control of all records of the region, such as tax dockets, income, business, transfer tax records, demand letters and/or assessment notices, other documents and communications; a-6) Disbursement of funds/payment of obligations and preparation/distribution of salaries; and a-7) Requisition, distribution, safekeeping and control of all accountable forms of the Region; b. Issue certified copies of regional tax records as requested by taxpayers; and c. Perform such other related functions as may be assigned. 4-a Personnel and Miscellaneous Unit a) Attend to all administrative matters affecting personnel of the region such as preparation of reports on personnel strength, attendance, accomplishment, performance evaluation, certifications of employment, clearance, etc.; b) Undertake recruitment and promotion procedures; c) Prepare and update Fidelity Bonds of Accountable Officers; and d) Perform such other related functions as may be assigned. 4-b General Services Unit a) Supervise janitorial and security services of the regional office; b) Take charge of requisition, distribution, safekeeping, and control of all accountable forms of the Region; c) Supervise the requisition, allocation and safekeeping of supplies and forms including mimeographing/reproduction of issuances used and distributed within the Region; d) Prepare and maintain records of memorandum receipts for equipment issued and requisitions for expendable supplies; and e) Perform such other related functions as may be assigned. 4-c Records Unit a) Supervise and control the movement of regional communications, tax dockets and records; b) Supervise the mailing/delivery of official letters, papers and dockets to the National Office; c) Charge the dockets, letters, memoranda and other communications to offices within the Region; d) Maintain a record of details of demand letters and/or assessment notices indicating date of issue, amount involved, year covered, etc.; e) Keep custody of all original tax returns; cd i f) Sort and segregate active from closed cases giving priority to Rush tax cases especially those about to prescribe; g) Provide storage for non-current records and undertake records disposal; h) Issue certified true copies of tax returns and documents as requested by taxpayers and other offices; and i) Perform such other related functions as may assigned. 4-d Cashiering Unit a) Prepare and issue checks for all claims accruing to the region; b) Prepare and deliver to PNB advice for TCAA checks issued and released not subject to pre-audit; c) Collect refunds of overpayment made to creditors (suppliers, service contractors, etc.); d) Distribute pay envelopes and revert unclaimed salaries of employees to the Region's fund; cd i e) Collect refunds of overpayment of salaries of regional employees; f) Act as custodian of the region's petty cash fund and prepare reports for its liquidation, together with all other cash advances made by the region; and g) Perform such other related functions as may be assigned. 5. Fiscal Operations Branch a. Administer and maintain the fiscal operations of the revenue region; b. Undertake the budgeting and accounting operations of the revenue; c. Implement fiscal policies and plans in the revenue region; d. Determine whether all revenues due the government are duly collected and accounted for; e. Certify the correctness of the total amounts in the confirmation receipts as verified from the Abstract of Daily Collections in connection with the issuance of payment orders and payments of taxes through authorized agent banks situated within the region; f. Review and evaluate methods of acquiring property for the use in the revenue region; cd i g. Conduct spot-check on cash and property accountability of all accountable officers; and cd h. Perform such other related functions as may be assigned. 5-a Accounting Unit 5-a-1) Disbursement Accounting Group a) Receive, journalize, index and vouch for the validity and completeness of all supporting documents and mathematical accuracy of all general vouchers and payrolls for all classes of expenditures; b) Receive billings, time records, payrolls and prepare and journalize corresponding general vouchers and payroll; c) Prepare lists for the remittances of term insurance and medicare deductions withheld on wages of casual employees; d) Prepare lists for the remittances of franchise and expanded withholding taxes from lessors, contractors, government-owned and controlled corporations and issue statement of Tax Withheld at Source to private creditors; e) Settle tentative suspensions received from the Commission on Audit; f) Conduct spot-check on cash and property accountability of all accountable officers; g) Record all collection of refunds of overpayments made to creditors, unclaimed and overpayment of salaries of Regional employees as reported by the Special Collecting Officer; and h) Perform such other related functions as may be assigned. 5-a-2) Revenue Accounting Group a) Determine whether all revenue due the government are duly collected and accounted for; b) Determine the correctness of entries particularly the amounts collected by matching Confirmation Receipts against Abstract of Daily Collections (BIR Form No. 1256); acd c) Tape the amounts entered to ascertain the correctness of the total amount appearing in the Abstract of Daily Collections (BIR Form No. 1256); d) Check with the authorized bank on discrepancies noted; e) Certify the correctness of the total amounts in the Confirmation Receipts as verified from the Abstract of Daily Collections and transmit the same weekly to the Accounting Division; cdt f) Maintain and control a register of Confirmation Receipt and Payment Orders; and g) Maintain file copies of Confirmation Receipts and Payment Orders and compilation of transmittal letters from Collection Branch to the Accounting Division. 5-b Budgeting Unit a) Prepare and assist in defending the annual regional budget proposals and requests for additional allotments; b) Certify the availability of funds for all disbursements of the Region within obligational limits; c) File copies of approved budgets, request for obligations of allotments and other related documents and communications, and maintain Control Sheets and Subsidiary Ledgers; d) Prepare lists of unpaid obligations and requests for issuance/revalidation of Cash Disbursement Ceiling (CDC); e) Review and evaluate methods of acquiring property for use in the revenue region; f) Prepare budget reports for submission to the Financial & Management Service; g) Act on queries and follow-ups of payments of private creditors; and casia h) Perform such other related functions as may be assigned. 6. Special Investigation Unit a. Administer the tax fraud program of the Bureau within the region; b. Implement policies and plans for the effective conduct of tax fraud investigations within the region; c. Conduct investigation of the following cases in accordance with the prescribed policies, guidelines and procedures under existing issuances: c-1) Returns of taxpayers with businesses or transactions located in two or more revenue districts within the region; c-2) Transfer tax cases where the real and personal properties of the deceased or donors are located in two or more revenue districts of the region, or where the residence of the deceased or donor is situated in one district but the properties of the estate or subject of the donation are located in another district; c-3) Returns filed or transactions of exempt entities within the provisions of Section 27, NIRC of 1977, and other special laws, including previously tax-exempt entities whose exemptions were withdrawn by Presidential Decree No. 1955, but excluding taxpayers listed within the jurisdiction of the audit divisions in the National Office. cdt d. Receive and evaluate complaints, denunciations or information relative to fraud or violation of any provision of the National Internal Revenue Code (NIRC)or any law or regulation administered by the Bureau of Internal Revenue; e. Submit periodic reports and other data for use by top management in the formulation of policies, programs, techniques and procedures regarding tax fraud cases; f. Refer to the Tax Fraud Division for completion and/or further evaluation all tax fraud cases covered by Letters of Authority including cases recommended for criminal prosecution and civil fraud cases; g. Act on cases referred by units within the Revenue Region, other Revenue Regions, Tax Fraud Division, other investigating offices and those assigned by the Commissioner; h. Review fraud cases developed by the Revenue District Office within the Region and undertake further investigation thereof if so warranted; i. Investigate and evaluate administrative cases of Regional personnel as directed by the Regional Director in coordination with the Legal Branch; and j. Perform such other related functions as may be assigned. 7. Tax Assistance Unit a. Provide assistance to taxpayers in the regional level, such as the preparation of tax returns, answering of queries or referring such queries to the proper official or office; b. Receive complaints of taxpayers and refer the same to the appropriate offices for proper action; c. Distribute primers and circulars embodying provisions of new tax laws and other information materials; and d. Perform such other related functions as may be assigned. B. Office of the Revenue District and Assistant Revenue District Officers a. Plan and develop programs, methods and procedures necessary for the efficient, effective and economical assessment and collection of internal revenue taxes in the revenue district, in accordance with the standards and guidelines set by the Commissioner of Internal Revenue and the Revenue Regional Director; casia b. Supervise the field investigation and audit of tax cases within the revenue district; c. Administer, implement and enforce internal revenue laws and regulations within the revenue district and assist in the prevention, detection and punishment of frauds or delinquencies in connection therewith; d. Coordinate with other revenue district offices, agencies and local units within the district for the proper and effective performance of its functions; e. Coordinate with the Collection Enforcement Division relative to cases involving dishonored checks; f. Process and issue tax clearances on capital gains; g. Process and issue certificates of clearance on transfer properties on gross estates where the assessed value of real and personal properties do not exceed P100,000.00 for classes A-1 and A Revenue District Offices (as classified under RAO No. 7-83) and when value does not exceed P50,000.00 for classes B, C and D (per RMO 15-85); h. Approve issuance of authority to print invoices/receipts and register books of accounts, business names and invoices/receipts of enterprises falling within the jurisdiction of the revenue district; cd i i. Refer all tax fraud cases to the Special Investigation Unit for review, investigation and evaluation; and j. Maintain a district data bank which shall include an index and a master file of all taxpayers in order to monitor those who are delinquent in the payment of their taxes; and k. Perform such other related functions as may be assigned. 1. Tax Assistance Unit a. Provide assistance to taxpayers in the district level, such as the preparation of tax returns, answering of queries or referring such queries to the proper official or office; b. Receive complaints of taxpayers and refer the same to the appropriate offices for action; c. Distribute primers, circulars embodying provisions of new tax laws and other informative materials; and d. Perform such other related functions as may be assigned. 2. Assessment Unit a. Implement the Tax Audit Program of the Bureau within the revenue district; casia b. Conduct field investigation of returns on income, business and transfer taxes including surveillance of taxpayers to prevent fraud and avoid delay of tax payment; c. Gather information on potential taxpayers from the various forms submitted to the BIR; and d. Perform such other related functions as may be assigned. 3. Collection Unit a. Enforce and monitor the collection of all internal revenue taxes within the revenue district; b. Receive income, withholding, business and other tax returns; c. Prepare corresponding Payment Orders for tax returns filed and/or issue revenue official receipts for taxpayments received; d. Determine unpaid PO's through reconciliation and send collection letters to taxpayers for non-payment of Payment Orders; e. Act on delinquent accounts/dockets assigned to the revenue district e-1) Set up and maintain a masterfile of delinquent taxpayers; e-2) Send call-up letters to delinquent taxpayers; e-3) Prepare and issue warrant(s) of distraint/levy (WDL); e-4) Prepare a monthly list of dishonored checks received for submission to the Collection Enforcement Division (CED) as well as a status report on dishonored checks cases referred by the CED to the revenue district; f. Prepare monthly/quarterly district collection reports required by top management; and g. Perform such other related functions as may be assigned. 4. Administrative Unit a. Take charge of requisition and distribution of accountable and non-accountable BIR Forms and other office supplies; b. Maintain and preserve all useful records and files of the district; c. Receive, record and refer all official communications to other units in the Revenue District Offices and disseminate all memorandum orders, circulars, regulations, etc.; d. Prepare and submit the Current Personnel Strength, Performance Rating Summary Report of Attendance of personnel of the District; e. Process application for registration of invoices and receipts, books of accounts, business names and sales register machines ; f. Issue tax-account numbers to the public and keep record thereof, to be directly forwarded to the Revenue Information Systems Service, Inc.; and g. Perform such other related functions as may be assigned. 5. Withholding Tax Unit a. Require all Withholding Agents within the revenue district of both the private and public sector to register or renew registration as employers; b. Process withholding tax returns and applications for Identification Numbers of withholding agents within the revenue district and transmit original thereof to the Withholding Tax Division; c. Set up index and maintain a masterfile of all registered withholding agents; casia d. Receive and process Withholding Tax Returns; e. Prepare communications to taxpayers to rectify imperfect returns filed; f. Pre-audit Employer's Withholding Exemption Certificate and Employer's Compensation Payment (BIR Form W-4) received and transmit original thereof to Withholding Tax Division not later than thirty (30) days from date of receipt; casia g. Transmit both original and triplicate copies of W-5 (Application for Employer's ID) and W-6 (Batch Control Transmittal Slip) to the Withholding Tax Division; h. Post on the corresponding Withholding Agents' index the remittances of withholding taxes; i. Compute deficiency taxes on erroneous and late Withholding Tax Returns filed; j. Attend to taxpayers inquiring for information regarding withholding taxes; k. Prepare reports required by the Withholding Tax Division; l. Determine potential taxpayers from information on various forms/returns received by the unit; and casia m. Perform such other related functions as may be assigned. IV. Repealing Clause : This Order supersedes all revenue issuances or portion thereof inconsistent herewith. V. Effectivity : This Order will take effect immediately. cd (SGD.) BIENVENIDO A. TAN, JR. Commissioner