Implementing the Provisions of Department Order No. 5-99

February 5, 1999 REVENUE ADMINISTRATIVE ORDER NO. 1-99 SUBJECT : Implementing the Provisions of Department Order No. 5-99 TO : All Internal Revenue Officers and Others Concerned STATEMENT OF POLICY: It is the recognized policy under this Order that the power to interpret the provisions of the National Internal Revenue Code of 1997 (NIRC) and other tax laws is under the exclusive and original jurisdiction of the Commissioner of Internal Revenue, subject to review by the Secretary of Finance, as provided for in Section 4 of the NIRC. The Bureau of Internal Revenue is under the supervision and control of the Department of Finance as provided for in Section 2 of the NIRC and Book IV, Title II, Chapter 4, Section 18 of the Administrative Code of 1987. There is a need for uniformity of rulings and issuances in the interpretation and application of the provisions of the National Internal Revenue Code and other tax laws. SECTION 1 . Scope . This Revenue Administrative Order shall, in general, apply to all revenue rulings and issuances of the Bureau of Internal Revenue that pertain to the implementation of the provisions of the National Internal Revenue Code of 1997 and other tax laws and includes the following: a) Rulings of first impression; b) Rulings reiterating established precedents as delegated by the Commissioner of Internal Revenue; c) Revenue Travel Assignment Order (RTAO); d) Revenue Special Order (RSO); e) Revenue Memorandum Circulars (RMC); f) Revenue Memorandum Orders (RMO); g) Revenue Audit Memorandum Orders (RAMO); h) Revenue Delegation of Authority Orders (RDAO); and i) Revenue Administrative Orders (RAO). SECTION 2 . Review Power of the Secretary of Finance . In accordance with Section 4 of the National Internal Revenue Code of 1997, the Secretary of Finance shall have the power to affirm, revise, modify or set aside rulings and issuances of the Bureau of Internal Revenue concerning implementation and application of the provisions of the National Internal Revenue Code and other tax laws. cdll SECTION 3 . Classification of BIR Rulings and Issuances . The following terms shall have the meaning described below: a) Rulings of first impression These refers to the rulings, opinion and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the NIRC and other tax laws without established precedents. Provided, however, that the term shall include reversal, modification or revocation of any existing ruling. b) Rulings with established precedents These shall refer to mere reiteration of previous rulings, opinion and interpretations of the Commissioner, as delegated to duly authorized internal revenue officers. c) Revenue Travel Assignment Orders (RTAO) These orders assign revenue personnel to specific functions in specific units. Travel assignment orders specifically mention the names of revenue personnel concerned. d) Revenue Special Orders (RSO) Instructions or directives for the accomplishment of special assignments or missions of significance which are temporary in nature or for a definite period of time. These issuances specifically mention the personnel or units of organization concerned. e) Revenue Memorandum Circulars (RMC) These issuances shall disseminate and embody pertinent and applicable portions as well as amplifications of the rules, precedents, laws, regulations, opinions and other orders and directives issued by or administered by the Commissioner of Internal Revenue as well as by other offices and agencies other than the Bureau of Internal Revenue, for the information, guidance or compliance of revenue personnel. f) Revenue Memorandum Orders (RMO) These are directives or instructions outlining procedures, techniques, methods, processes, operations, activities, work flow, and the like, which are necessary to carry out programs or to achieve policy goals and objectives. These issuances may be of general or of limited scope yet in any case require definite compliance by those concerned. They are not addressed to any particular group of employees or offices because they are for general information, but those directly concerned with the compliance of these provisions are either definitely stated, or unmistakably implied thereat. g) Revenue Audit Memorandum Orders (RAMO) The audit procedures to be observed by revenue officers in the conduct of audit of tax cases and in their submission of reports of investigation. llcd h) Revenue Delegation of Authority Orders (RDAO) The functions delegated by the Commissioner to revenue officers in accordance with law. i) Revenue Administrative Orders (RAO) Revenue Administrative Orders cover subject matters which deals strictly with more or less permanent administrative set-up of the Bureau. Delineations of organizational structures, statements of functions and/or responsibilities, definitions and delegations of authority, staffing and personnel requirements, standards of performance, establishment of Bureau-wide programs, installation of systems, and the like, are most likely subject matter of Revenue Administrative Orders. These issuances are for general guidance, compliance and/or information. SECTION 4 . Validity of Rulings and Issuances . a) All rulings under Sec. 3 (a) shall be submitted together with their dockets to the Secretary of Finance, and shall not be valid unless reviewed and approved by the Secretary of Finance; b) All rulings under Sec. 3(b) shall be valid unless revoked by the Secretary of Finance. Copies of these rulings and issuances, with attached copies of its precedents shall be submitted to the Secretary of Finance within five (5) days from the date of such ruling; c) All other issuances shall be submitted to the Secretary of Finance as may be required. SECTION 5 . Effectivity . This Revenue Administrative Order shall take effect immediately. (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue APPROVED: (SGD.) EDGARDO B. ESPIRITU Secretary of Finance DEPARTMENT OF FINANCE 1st Indorsement February 8, 1999 Respectfully referred to Commissioner Beethoven L. Rualo, Bureau of Internal Revenue, Quezon City, for numbering and other appropriate action the Revenue Administrative Order on the subject, "Implementing the Provisions of Department Order No. 5-99". Please advise this Office of the action(s) taken by your Bureau on the matter. (SGD.) JUAN JOSE RODOM T. FETIZA Assistant Secretary