Action Plan on the Review & Evaluation of Potential Tax Fraud Cases

May 17, 1989 REVENUE ADMINISTRATIVE ORDER NO. 05-89 SUBJECT : Action Plan on the Review & Evaluation of Potential Tax Fraud Cases TO : DCIR Eufracio D. Santos, the Tax Fraud Evaluation Committee Created under RSO No. 40-89 dated March 30, 1989, and All Revenue Officials Concerned I. Objectives This Order aims to define the set of procedures to be adhered to by the Tax Fraud Evaluation Committee in the performance of its functions with a view to an orderly and expeditious disposition of tax fraud cases referred to it for review. II. Systems and Procedures A. Secretariat 1. Receives dockets of referral cases and stamps thereon the data and time of receipt; 2. Records the same in the receiving book indicating the date of receipt, the name of taxpayer, his address, the kind of tax and taxable year(s) involved, the amount involved and the office of origin; 3. Transcribes the same information in an index card for speedy reference purposes; 4. Submits the docket to the Chairman for assignment to a reviewer; 5. Charges the docket to the reviewer who shall acknowledge receipt in a charge book kept for the purpose; 6. Receives and records evaluation reports, together with the dockets reviewed; 7. Prepares agenda of cases for deliberation by the Committee, informing the members of the date and time of its meeting; and 8. Performs allied functions and/or as directed by the chairman. B. The Chairman 1. Presides over the meetings of the Committee; 2. Assigns cases for review and prescribes actions to be undertaken for the proper evaluation of cases; 3. Signs as recommending officer reports for submission to the Commissioner; cdt 4. Signs for the Commissioner relevant communication addressed to the heads of offices from which potential fraud cases under review originated; 5. Signs ATIRS in cases where the taxpayer offers payment and which offer was previously approved by the Commissioner, upon the recommendation of Committee; and 6. Generally, to oversee the overall functioning of the Committee. C. The Members 1. Evaluate and submit to the Chairman evaluation reports on cases referred to them for review; 2. Supervise the work of reviewers assigned to assist them; 3. Sit with the Chairman on the deliberation and disposition of fraud cases referred to the Committee; and 4. Generally, to assist the Chairman in the proper discharge of the Committee's functions. D. Reviewers 1. Conduct researches, evaluate and submit cases referred to them for review; 2. Submit to the member concerned drafts of the evaluation reports; and 3. Perform such duties as may be directed by the Chairman or by their members to whom they are attached. III. Disposition of Referral Cases A. Depending on the results of the evaluation and subject to the approval of the Commissioner, cases reviewed shall be disposed of as follows: 1. Refer the case to the Legal Office or to the Legal Branch concerned for the criminal prosecution of the taxpayer if the evidence of guilt is strong, and there is a good probability of conviction; cd 2. Refer the case for assessment to the appropriate review division or office for the imposition of the 50% fraud penalty, if the evidence of fraud is clear and convincing but the proof adduced does not meet the quantum of proof for a successful criminal prosecution; 3. Where the case is deficient in documentation, the Committee may return the case to its origin with appropriate instruction, or at its own initiative, the Committee itself may refer the case to any investigation unit to complete the documentation and investigation of the case; or 4. Refer the case to the appropriate review division or office for the issuance of deficiency tax assessment notices or letters of demand, without the imposition of the 50% surcharge, if the proof adduced does not meet the requirements for fraud. IV. Coordinative Actions Whenever in the performance of its functions, the Committee shall require the coordinative assistance of any review officer or employee, the Committee shall communicate with the superior official where such employee is assigned, for the detail of the employee concerned, the duration of which shall not be more than thirty (30) days from date of request. All Revenue Officers shall give access to documents and official record when required by the Committee, all requests therefor to be under the signature of the Chairman of the Committee. casia This Revenue Administrative Order shall take effect immediately. (SGD.) JOSE U. ONG Commissioner of Internal Revenue