Revision of Functions of the Tax Fraud Division

August 6, 1986 REVENUE ADMINISTRATIVE ORDER NO. 10-86 SUBJECT : Revision of Functions of the Tax Fraud Division TO : All Revenue Officials and Others Concerned I. Objectives : This Order is issued to revise certain functions of the Tax Fraud Division aimed to effectively broaden its activity relative to the program thrust and overall goal of the Bureau's reorganization. II. Organization : In view of the abolition of the Intelligence Division pursuant to RAO 3-86 dated April 29, 1986 and the consequent transfer of all its functions, personnel and equipment to the Tax Fraud Division, a new section called the Intelligence Operations is hereby created to take charge of the intelligence operation. Henceforth, the Tax Fraud Division which falls under the administrative jurisdiction of the CIR due to its extremely sensitive functions shall have the following sections : A. Retrieval, Analysis and Evaluation Section B. Investigation Section C. Intelligence Operations Section D. Administrative Section III. Functions : The Tax Fraud Division shall have the following functions: 1. Develop and recommend policies and work programs and set up standards, guidelines and procedures for the effective implementation of the tax fraud investigation and intelligence programs of the Bureau; 2. Adopt a system of information retrieval and analysis through access to records of government and private entities authorized under Section 7 of the NIRC and through access to records of the Bureau and the Rev. Information Systems Services, Inc. (RISSI); 3. Evaluate, review and take appropriate actions on all reports of tax cases from all investigation units, Regional and Central Offices of the Bureau, where there are findings of fraud involving criminal and/or civil liabilities of the taxpayers concerned. 4. Develop tax fraud cases for criminal prosecution, including those involving syndicated crimes, smuggling and fake BIR accountable forms after a thorough review of the evidence of the following cases: a. initiated and developed by the Division; b. Referred to the Division by the Commissioner and other officials of the Bureau; c. Referred to the Division by Investigating Units of the Regional and Central Offices of the Bureau; 5. Coordinate with Special Investigation Units (SIUs) of Revenue Regions and other units of the Bureau in the development of cases with tax fraud potentials for criminal prosecution or civil fraud cases where the evidence to be gathered is located outside the jurisdiction of the Regional Office, or where the Division is in a better position to gather the evidence by reason of the circumstances of the case; 6. Investigate tax fraud cases where two or more non-adjacent Regions are involved; 7. Determine and recommend to the Commissioner the unit that shall undertake tax fraud investigation where multiple tax probes are being conducted by two or more Regions or by the Tax Fraud Division and another region (without one unit knowing of the other's investigation); 8. Maintain a systematic record of tax fraud cases handled by Regional Offices so that investigations conducted by two or more investigation units of the same taxpayer can be easily detected; 9. Consolidate reports submitted by Revenue Regions on the status of tax fraud cases being handled by Special Investigation Units for submission to the Commissioner; 10. Prepare manuals on standard audit procedures, methods and techniques of investigating tax fraud cases and conduct periodic briefings for field personnel performing tax fraud investigation work; 11. Conduct substantive intelligence operations to detect, prevent and neutralize individuals and organizations involved in tax evasion, syndicate crimes on smuggling (in collaboration with other concerned agencies of government) and the use of fake BIR accountable forms; 12. Coordinate and integrate all intelligence activities of the Central, Regional and District Offices of the Bureau; 13. Perform the following functions auxiliary to coordinating and establishing working relationship with other units of the Bureau; a. Refer to the Internal Security Division, Inspection Service any prima facie administrative case disclosed in the course of intelligence work; b. Coordinate and monitor intelligence/information gathering and security activities of the Revenue Attache Unit; c. Monitor and coordinate operations in the region and districts on activities pertaining to smuggling (in collaboration with other concerned agencies of government) and the use of fake BIR accountable forms; 14. Perform such other related functions as may be assigned. The following shall be the functions of the Sections under the Tax Fraud Division: A. Retrieval, Analysis and Evaluation Section 1. Evaluation and review all reports of cases initiated by the Division or referred to the Division by other investigating units in the National or Regional Offices; 2. Gather, consolidate and interpret intelligence information relating to tax fraud matters from all available sources; 3. Maintain a system, either computerized or any equivalent recording system for ready reference, whereby information can be retrieved which will serve as a basis for investigation of tax fraud cases; 4. Develop and recommend a system of coordinating with Regional Offices and/or Divisions in the National Office and require the submission to the Tax Fraud Division leads and information on records necessary for tax fraud investigation activities; 5. Prepare the recommendation which shall designate the unit that shall undertake the fraud investigation where multiple tax probes are being conducted by two or more regions or by the Tax Fraud Division and another Region (without one unit knowing of the other investigation); 6. Supply the Investigation Section with all leads, information and records gathered; and 7. Perform such other related functions as may be assigned. B. Investigation Section 1. Monitor and supervise the investigation work of field personnel; cdt 2. Review and evaluate all reports submitted by field personnel; a. Analyze the evidence which will justify the conduct of an investigation or re-investigation of a taxpayer; b. Review all completed reports of investigation before transmittal of same to the Retrieval, Analysis and Evaluation Section; c. Take action on recommendations of field personnel on investigations of cases with fraud potentials; 3. Coordinate with the Retrieval, Analysis and Evaluation Section and prepare outline of procedures or audit guidelines for the conduct of field investigation; 4. Plan, organize and supervise surveillance work when necessary in order to establish a prima facie fraud case on the basis of a tax assessment, pursuant to Section 16 of the NIRC; 5. Recommend the investigation of cases with indications of fraud where two or more non-adjacent Regions are involved; 6. Prepare a summary report of monthly activities of fieldmen on the progress of cases being worked upon, including the number of cases received, disposed and pending; and 7. Perform such other related functions as may be assigned. C. Intelligence Operations Section 1. Recommend plans and programs to implement intelligence operations activities of the Bureau as well as for intelligence research and analysis activities; 2. Conduct researches and studies and acquire pertinent reference materials as required for intelligence missions; 3. Monitor, infiltrate/penetrate criminal and syndicated groups as well as identified and suspected personalities engaged in activities directed against the BIR; 4. Conduct liaison activities with other intelligence, police and investigative agencies for the conduct of arrest, raids and seizure; 5. Assist in the investigation and prosecution of persons arrested by law enforcement agencies and/or the BIR in connection with the violations of the NIRC; 6. Countercheck, the printing, storage, distribution, accounting and use of BIR accountable forms, such as strip stamps, regular and auxiliary labels, documentary stamps, official receipts and other similar forms; 7. Recommend the dissemination of intelligence/information or data on revenue matters to proper BIR officials, and to other branches of government, on intelligence or data gathered which pertain to the functions and jurisdiction of the latter; 8. Prepare oral or written briefings and periodic intelligence reports; and 9. Perform such other related functions as may be assigned. D. Administrative Section 1. Supervise the safekeeping of dockets while they are in the possession of the Division and control all data and communications received pertinent to cases handled; 2. Maintain a systematic record of tax fraud cases handled including information and denunciations received by Regional Offices so that investigations conducted by two or more investigating units on the same taxpayer can be easily detected; 3. Maintain journals, worksheets, situation maps as well as files of target personalities and organizations to be used for intelligence activities; 4. Consolidate reports submitted by Revenue Regions on the status of tax cases being handled by Special Investigation Units for submission to the Commissioner; 5. Control the requisition of accountable forms and supplies, including letters of authority (L/A) and oversee the receipt, safekeeping, preservation, economical utilization and continuing replenishment thereof; 6. Devise a system for the effective recording of all transactions and actions taken by the Division; 7. Attend to all general administrative matters of the Division such as daily routine clerical activities, preparation of periodic reports and efficiency ratings of all personnel, recording of attendance and others; and 8. Perform such other related functions as may be assigned. IV. Repealing Clause : This Order supersedes the provisions of Revenue Administrative Order Nos. 8-84 dated May 24, 1984 and 9-82 dated September 29, 1982, insofar as it pertains to the above-mentioned functions and all revenue issuances or portions thereof inconsistent with the provisions of this Order. V. Effectivity : This Order shall take effect immediately. (SGD.) BIENVENIDO A. TAN, JR. Commissioner