Statement of Functions of the Assessment Service Down to Section Level

February 16, 1988 REVENUE ADMINISTRATIVE ORDER NO. 07-88 SUBJECT : Statement of Functions of the Assessment Service Down to Section Level TO : All Internal Revenue Officers and Others Concerned I. Objective : This Order states the functions of the Assessment Service pursuant to the reorganization of the BIR set forth in Executive Order 127. One main feature of the reorganization is the centralization of the review, processing and issuance of tax credits/refunds on direct taxes of the Tax Credit/Refund Division, formerly Refund Audit Division. This Order further expands the function of the Assessment Performance Control Division to undertake performance audit of assessment personnel and systems of both the National and Regional Offices. aisa dc II. Organization : To attain this objective, the Assessment Service shall have the following Divisions and Sections: A. National Audit Review Division 1. Audit Review Section I 2. Audit Review Section II 3. Audit Review Section III B. Assessment Performance Control Division 1. Assessment Performance Review Section I 2. Assessment Performance Review Section II 3. Assessment Data Analysis Section C. Tax Credit/Refund Division 1. Tax Credit/Refund Section I 2. Tax Credit/Refund Section II 3. Processing Section III. Functions : The Assessment Service shall have the following functions: 1. Perform staff, advisory and consultative functions relative to tax assessments emanating from the Divisions under the Service and the Regional Offices aisa dc 2. Develop and recommend policies and work programs and set up standards, guidelines and procedures on all assessment activities; 3. Review and evaluate the performance of the field offices to determine adherence to standards, guidelines and procedures; 4. Conduct evaluation of assessment operations for the purpose of improving existing programs, procedures, techniques and standards; 5. Recommend necessary tax legislations and regulations based on its operations and experiences to serve as inputs to the tax planning and research efforts of the Planning and Research Service; 6. Develop and establish zonal valuation of real properties and update it from time to time; 7. Approve and issue estate and donor's tax clearances within the jurisdictional limits; casia 8. Develop and set up standards, guidelines and procedures relative to the processing, control and issuance of direct tax credits/refunds; 9. Approve and issue termination letters within jurisdictional limits; 10. Perform such other related functions as may be assigned to it. A. National Audit Review Division 1) Review for approval regional audit reports within its jurisdictional limits (except those on refundable income tax returns) to determine guidelines and procedures; 2) Develop, formulate and recommend policies and work programs and set up standards, guidelines and procedures on the review of audit reports from the regional offices; 3) Review, evaluate, verify and examine transactions involving transfer of property where the market value exceeds P3,000,000 and capital gains transactions where the fair market value exceeds P500,000; 4) Recommend procedures, policies and standards to be adopted in the Regional Offices on assessment matters; and 5) Perform such other related functions as may be assigned to it. A-1 Audit Review Section I, II, III The three Sections (I-III) shall have the same functions. Tax cases within the jurisdictional limits are grouped by region and are assigned to a particular section. a) Review audit reports emanating from Revenue Regions on tax cases not tainted with fraud where the tax due per return for income and business is more than P100,000.00 and the resulting deficiency tax is less than 40% thereof; cdt b) Review and evaluate reports involving transfers of property including capital gains tax cases where the gross estate (fair market value of real property plus value of personal properties of decedent/taxpayer) if transfer tax cases exceeds P3 M and over P500,000 in capital gains tax cases; c) Prepare and process estate and donors' tax clearance certificates; d) Recommend policies, guidelines, procedures and techniques on the investigation and review of audit reports; e) Prepare transcripts of assessment to serve as basis for the preparation of the demand letter or assessment notice; f) Prepare termination letters for closed and paid direct tax cases; g) Prepare follow ups/tracers on delayed submission of audit reports; aisa dc h) Monitor the assessment notices issued by the Collection Service based on the transcript of assessment transmitted thereat by the Assessment Service; and i) Perform such other related functions as may be assigned to it. B. Assessment Performance Control Division 1) Develop, formulate and recommend policies and work programs and set up standards, guidelines and procedures for the evaluation and appraisal of national, regional and district assessment performance including the accomplishments of individual revenue enforcement officers; 2) Evaluate national, regional and district assessment activities to determine adherence to audit standards, guidelines and procedures; acd 3) Collate assessment reports/data of all assessment units for the purpose of evaluating national, regional and district assessment performance; 4) Determine and analyze problems on national, regional and district assessments and recommend solutions thereto; 5) Provide technical assistance to national, regional and district offices in the implementation of standards, procedures or techniques to improve assessments; 6) Act as liaison between the national and field offices to facilitate submission of assessment reports/data needed by top management; 7) Monitor the reporting of capital gains taxes derived from real property transactions and ordinary gains of corporations and individuals whose subject property is an ordinary asset; 8) Act as Secretariat to the Technical Committee on Zonal Valuation; and 9) Perform such other related functions as may be assigned to it. B-1 Assessment Performance Review Section I a) Recommend policies, guidelines and procedures on the evaluation and appraisal of the performance on revenue assessment and collection through enforcement activities of revenue enforcement officers, district, regional and national offices; b) Review and monitor the activities of revenue enforcement officers, district, regional and national offices and evaluate actual performance against goals through on-site performance audits; aisa dc c) Monitor the movements of revenue enforcement officers and maintain an updated record of their assignments, transfers, promotions, designations, etc. for a more effective appraisal of their performance; d) Recommend for punitive action revenue personnel who are habitually delayed in the submission of required reports; e) Prepare reports based on the performance audits of the national, regional and district offices for submission to top management; f) Determine level of competence and/or training needs of assessment personnel; g) Identify revenue assessment personnel deserving of promotions or transfers/reassignments based on their performance; and h) Perform such other related functions as may be assigned to it. acd B-2 Assessment Performance Review Section II a) Recommend policies, guidelines, standards and procedures on the evaluation and appraisal of revenue assessment systems and procedures; b) Determine and analyze problems on assessment systems which may result to failure of the systems and recommend solutions thereto; c) Prepare specific audit guidelines for particular assessment system/procedure; d) Conduct periodic audit on assessment system of field offices to ensure strict compliance and application of revenue tax laws and regulations; cdt e) Conduct inventory of letters of authority issued and tax cases terminated by different assessment units; f) Reconcile list of letters of authority issued against reports submitted to the National and Regional Offices; g) Prepare and submit assessment system audit reports; and h) Perform such other related functions as may be assigned to it. B-3 Assessment Data Analysis Section a) Plan and develop methods and procedures on monitoring the performance on assessment and collection through enforcement activities of the national and regional offices; b) Collate, tabulate and analyze statistical data on revenue assessment and collection through enforcement activities; c) Set up and maintain data on real property transactions of corporations and individuals to serve as inputs in establishing zonal valuation of real properties and for other information needs of top management; d) Recommend necessary solutions to problems in case of failure to meet assessment and collection goals; e) Keep and maintain a complete record of all reports received from national and regional offices; cd i f) Prepare follow-up letters on delayed assessment reports in coordination with other assessment offices and the Revenue Computer Center (RCC); g) Recommend amendments on existing laws, circulars, memoranda to improve administration and enforcement of revenue laws, rules and regulations; and h) Perform such other related functions as may be assigned to it. C. Tax Credit/Refund Division 1) Develop, formulate and recommend policies and work programs on the review, processing and issuance of tax credits/refunds on direct taxes; 2) Set up standards, guidelines, procedures and techniques for the review, processing and issuance of tax credits/refunds on direct taxes; cd 3) Review audit reports on refundable income tax returns to determine adherence to standards, guidelines and procedures; 4) Control, process and issue all types of tax credits/refunds on direct taxes, including those involving erroneous or illegal payments of direct taxes whenever there are questions of fact; 5) Review tax credits/refunds on direct taxes that have undergone computer processing for correction; 6) Act on inquiries relative to status of tax refunds on compensation income including the authentication of claims for the replacement of expired tax refund notices; and 7) Perform such other related functions as may be assigned to it. casia C-1 Tax Credit/Refund Section I a) Review reports, process and prepare tax credits/refunds on compensation income of resident and non-resident citizens, including those involving erroneous or illegal payments on compensation income whether there are questions of fact; b) Authenticate claims for replacement of expired tax refund notices on compensation income; c) Assist taxpayers on inquiries relative to the status of tax refunds on compensation income; d) Recommend and prepare vouchers for direct payment of refunds in meritorious cases; e) Evaluate and recommend appropriate action on request for reinvestigation or issuance of tax credits/refunds on compensation income; f) Prepare Transcript of Assessment to serve as basis for the preparation of demand letters or assessment notices where refundable cases become collective upon review of reports; g) Conduct informal conferences with taxpayers or representatives to thresh out divergent views on tax credit/refund cases on compensation income; h) Assist BIR Trial Attorney in the disposition of contested and/or protested cases on tax credits/refunds on compensation income; and i) Perform such other related functions as may be assigned to it. C-2 Tax Credit/refund Section II a) Review reports, process and prepare tax credits/refunds on corporate income tax, expanded withholding tax and direct taxes under special laws, including those involving erroneous or illegal payments of said taxes whenever there are questions of fact; cd b) Monitor and control claims for refund by corporations; c) Evaluate and recommend appropriate action on request for reinvestigation or issuance of tax credits/refunds on corporate income tax, expanded withholding tax and direct taxes under special laws; d) Assist BIR Trial Attorneys in the disposition of contested and/or protested cases on tax credits/refunds on corporate income tax, expanded withholding tax and direct taxes under special laws brought before the Court of Tax Appeals; e) Conduct informal conferences with taxpayers or representative to thresh out divergent views on tax credit/refund cases on corporate income tax, expanded withholding tax and direct taxes under special laws; and f) Prepare Transcript of Assessment to serve as basis for the preparation of demand letters or assessment notices where refundable cases become collective upon review of reports; and g) Perform such other related functions as may be assigned to it. C-3 Processing Section a) Receive and process applications for direct tax credits/refunds; b) Control application for direct tax credits/refunds; c) Monitor the use of tax credit certificates for direct tax refunds; d) Refer to the Revenue District Office through the Revenue Regional Office, discrepancies disclosed in the application of direct tax credits/refunds; and e) Perform such other related functions as may be assigned to it. IV. Repealing Clause : This Order supersedes all revenue issuances or portion thereof inconsistent herewith. V. Effectivity : This Order shall take effect immediately. BIENVENIDO A. TAN, JR. Commissioner