Creation of the Withholding Tax Audit Division and the Statement of Its Functions Down to Section Level

June 8, 1990 REVENUE ADMINISTRATIVE ORDER NO. 04-90 SUBJECT : Creation of the Withholding Tax Audit Division and the Statement of Its Functions Down to Section Level TO : All Internal Revenue Officials and Others Concerned I. Objective : This Order is issued to implement more effectively the provisions of Sec. 235 (c) of the Tax Code, as amended, and as implemented by RAMO No. 5-86 dated May 21, 1986 relative to the enforcement of withholding taxes. cdt II. Policies : A. The Withholding Tax Audit Division shall be under the jurisdiction of the Special Operations Service; and B. The Withholding Tax Audit Division shall be exclusively responsible for the audit/investigation of all withholding agents relative to compliance to withholding tax laws and regulations. III. Organization and Functions : The Withholding Tax Audit Division shall have the following functions: cdt A. Develop, formulate and recommend policies, work programs, procedures and guidelines for the effective implementation of the Withholding Tax Audit System of the Bureau; B. Administer and supervise all activities on the audit/investigation of withholding agents; C. Undertake field audit and examination of tax returns; payroll, allowance, pension and income payment accounts; and other accounting records of said agents to determine compliance with withholding tax law and regulations; cdt D. Gather, collate and analyze statistical data on withholding agents for the purpose of developing an audit data bank; and E. Perform such other related functions as may be assigned. There shall be three (3) examination groups/sections under the Withholding Tax Audit Division, with the following functions: 1. Conduct field audit of withholding agents on the following categories of income payments: a. Compensation Income; b. Income payments covered by the expanded withholding tax system; acd c. Income payment subject to final taxes: c-1. non-resident c-2. passive income; and d. Money payments by the government to private persons or entities. 2. Investigate the various accounts (payroll, allowance, pension and income payment), subsidiary accounting records of said agents, including their monthly, quarterly and annual tax returns; 3. Gather and analyze statistical data for the purpose of establishing an audit data bank for selective audit; and cdt 4. Perform such other related functions as may be assigned. IV. Repealing Clause : This Order supersedes all revenue issuances and/or portions thereof inconsistent herewith. V. Effectivity : This Order shall take effect immediately. casia (SGD.) JOSE U. ONG Commissioner of Internal Revenue