Statement of Functions of the Legal Office Including the Divisions Under it Down to Section Level

September 16, 1986 REVENUE ADMINISTRATIVE ORDER NO. 11-86 SUBJECT : Statement of Functions of the Legal Office Including the Divisions Under it Down to Section Level TO : All Internal Revenue Officers and Others Concerned I. Objectives This Order aims to implement more effectively the Reorganization of the Bureau under Executive Order No. 608 by defining, delineating and expanding the functions of the Legal Office and its divisions pertinent to legal activities. II. Organization To attain this objective, the Legal Office shall have the following divisions and respective sections: A. Law Division 1. Direct Taxes Section 2. Indirect Taxes Section B. Litigation Division 1. Direct Taxes Section 2. Indirect Taxes Section C. Prosecution Division 1. Direct Taxes Section 2. Indirect Taxes Section D. Appellate Division 1. Direct Taxes Section 2. Indirect Taxes Section III. Functions The Legal Office shall have the following functions: 1. Perform staff, advisory and consultative functions with respect to the interpretation of revenue laws and regulations and other legal matters; 2. Formulate and recommend policies, guidelines, standards and procedures on activities pertaining to legal work including the interpretation of the provisions of the National Internal Revenue Code (NIRC) and tax treaties; 3. Conduct studies and researches on tax cases and on various tax treaties; 4. Review rulings, opinions and pleadings to be filed in the Fiscal's Office and in the court; 5. Supervise the prosecution of civil and criminal cases involving taxation and erring revenue personnel; 6. Review administrative decisions on contested tax cases, claims for tax refund or credit except refund of withholding tax on wages and corporate quarterly income taxes; 7. Evaluate actions of field service offices referred to it pertaining to legal questions for adherence to law, facts, policies, procedures and standards; 8. Recommend tax legislations and regulations on the basis of its operations and experience which shall serve as input to the tax planning and research efforts of the Management and Policy Service; 9. Formulate policies for processing protests against assessments; evaluate requests for reconsideration of such assessment and recommend the reinvestigation of contested or disputed amounts to the proper department or office if the evidence/arguments adduced by the parties so warrant; 10. Act on offers of taxpayers to compromise their tax liabilities on the ground of financial inability to pay and/or doubtful legality; 11. Direct and review the activities and actions taken by the divisions under this Office; and 12. Perform such other related functions as may be assigned. A. The Law Division shall have the following functions: 1. Develop and recommend policies, work programs, standards, guidelines and procedures for the conduct of legal operations in the bureau, including the interpretation of the provisions of the National Internal Revenue Code (NIRC) and tax treaties; 2. Prepare and render decisions on issues of questions of laws raised, involving interpretation of the NIRC and protested tax cases; 3. Prepare digest on rulings and opinions for public dissemination on all legal questions arising from the enforcement of internal revenue laws, regulations and tax treaties; 4. Coordinate the uniform application of tax laws, regulations and court decisions; 5. Review rulings issued by the regional offices and rectify errors, if any; 6. Act on requests for tax exemption, informers' reward cases and other legal matters referred to it; 7. Recommend rules and regulations for the proper implementation of the provisions of the NIRC and of tax treaties; and 8. Perform such other related functions as may be assigned. A-1 Direct Taxes Section a. Prepare decisions on protested direct tax cases where issues raised are questions of law; b. Prepare rulings, opinions or comments and disseminate digests of these rulings; c. Prepare and recommend laws on direct taxes as well as their implementing orders, regulations, circulars and other issuances; casia d. Undertake a continuing study and research on direct taxes and on the various tax treaties which shall be necessary in the preparation of rulings, opinions and comments; e. Act on protested tax cases on issues arising from the application of tax treaties; f. Recommend amendments and implementing regulations on existing tax treaties to be forwarded to the Policy Division; g. Act on requests for tax exemption and informers' reward cases involving direct taxes; h. Review rulings on direct taxes issued by the Regional Offices; and i. Perform such other related functions as may be assigned. A-2 Indirect Taxes Section a. Prepare decisions on protested indirect tax cases where issues raised are questions of law; b. Prepare rulings, opinions or comments on matters involving indirect taxes and disseminate digests of these rulings; c. Prepare and recommend laws on indirect taxes as well as their implementing orders, regulations, circulars and other issuances; d. Undertake a continuing study and research on indirect taxes necessary for the preparation of rulings, opinions and comments; e. Act on requests for tax exemption and informers' reward cases involving indirect taxes; f. Review rulings on indirect taxes issued by the Regional Offices; and g. Perform such other related functions as may be assigned. B. The Litigation Division shall have the following functions: 1. Develop policies, plans, work programs, standards, guidelines and procedures relating to litigation work on civil liability under the National Internal Revenue Code (NIRC) and other related laws and regulations; 2. Implement said policies, plans, work programs and procedures relating to litigation work; 3. Represent the Commissioner of Internal Revenue in the Supreme Court, Court of Appeals, Regional Trial Courts and Court of Tax Appeals in the trial or hearing of internal revenue civil cases as well as cases filed by erring employees of the Bureau of Internal Revenue and tax informers in collaboration with the Solicitor General; 4. Prepare pleadings, briefs and memoranda to be filed with the said courts in connection with the cases pending before them; 5. Assist the Solicitor General in the preparation of pleadings in civil cases filed by the government against delinquent taxpayers; 6. Assist in the coordination and supervision of the activities of the legal branches in the regions with respect to litigation work; and 7. Perform such other related functions as may be assigned. The following shall be the functions of the sections under the Litigation Division: B-1 Direct Taxes Section a. Institute Civil actions to effect collection of delinquent income, estate and donor's taxes; b. Act as government counsel in the trial of all civil actions and file pleadings necessary for the prosecution of said direct tax cases; c. Interview witnesses, evaluate evidence and confer with the Solicitor General in connection with these cases; d. Act administratively on income, estate and donor's tax cases referred to the Section which are similar to or may be affected by cases pending in court preparatory to the institution of civil action for collection; and e. Perform such other related functions as may be assigned. B-2 Indirect Taxes Section a. Institute civil actions to effect collection of delinquent business, specific, documentary stamps, mining and miscellaneous taxes such as bank taxes, insurance premiums, amusement taxes and tobacco inspection fees; b. Act as government counsel in the trial of all civil actions and file pleadings necessary for the prosecution of said indirect tax cases; c. Interview witnesses, evaluate evidence and confer with the Solicitor General in connection with these cases; d. Act administratively on cases involving said indirect taxes which are similar to or may be affected by cases pending in court preparatory to the institution of civil action for collection; and e. Perform such other related functions as may be assigned. C. The Prosecution Division shall have the following functions: 1. Develop policies, work programs, standards, guidelines and procedures relating to criminal prosecution of violations of the NIRC and related statutes as well as cases of erring revenue officials and employees recommended for criminal prosecution; 2. Study and take proper action on cases referred to for criminal prosecution of persons violating internal revenue and other laws administered by the Bureau and on cases involving erring revenue employees recommended for criminal prosecution; 3. Represent the Commissioner and assist the fiscals and other prosecuting officials in the prosecution of criminal cases involving violations of internal revenue and other laws and regulations administered by the Bureau; 4. Recommend deportation of alien taxpayers and make necessary representation as government counsel before the Deportation Board; 5. File administrative complaints against erring professionals with the Professional Regulations Commission for disciplinary action insofar as violations of internal revenue and other tax laws are concerned; 6. Assist in the supervision and coordination of the activities of the different legal branches in the regions with respect to criminal prosecution work; and 7. Perform such other related functions as may be assigned. The following shall be the functions of the Sections under the Prosecution Division: C-1 Direct Taxes Section a. Study and act appropriately on direct tax cases referred to the Division for criminal prosecution of persons violating internal revenue laws and other laws administered by the Bureau of Internal Revenue; b. Represent the Commissioner of Internal Revenue and assist the fiscals and other prosecuting officers in the prosecution of criminal cases involving tax evasion and/or violation of internal revenue laws and regulations on direct taxes and of administrative cases against professionals before the PRC; cd i c. Coordinates with the other units of the Bureau and other government agencies for the successful prosecution of violators of internal revenue laws and regulations; and d. Perform such other related functions as may be assigned. C-2 Indirect Taxes Section a. Study and act appropriately on indirect tax cases referred for criminal prosecution of persons violating internal revenue laws and other laws administered by the Bureau of Internal Revenue; b. Represent the Commissioner of Internal Revenue and assist the fiscals and other prosecuting officers in the prosecution of criminal cases involving tax evasion and/or violation of internal revenue laws and regulations on indirect taxes and of administrative cases against professionals before the PRC; c. Coordinates with the other units of the Bureau and other government agencies for the successful prosecution of violators of internal revenue laws and regulations; and d. Perform such other related functions as may be assigned. D. The Appellate Division shall have the following functions: 1. Develop and implement policies, work programs, standards, guidelines and procedures relating to appellate work in the bureau; 2. Set up procedures for administrative appeals on protested tax cases, claims for tax refund and credit, except refund of withholding taxes on wages and corporate quarterly income taxes; 3. Process appeals of taxpayers on protested tax cases; 4. Review actions taken by other units on all claims for tax refund and credit except refund of withholding taxes on wages and corporate quarterly income taxes; 5. Refer to the appropriate audit division, claims for tax refund and credit which are immediately filed by the taxpayers with the Appellate Division prior to normal audit of the return; and 6. Perform such other related functions as may be assigned. The following shall be the functions of the Sections under the Appellate Division: D-1 Direct Taxes Section a. Act on appeals and protests of taxpayers regarding assessments on direct taxes and conduct hearings on the appealed cases to arrive at a correct assessment of tax liabilities; b. Process claims for tax refund or credit involving erroneous or illegal payments of direct taxes; c. Review action taken by other units on all claims for tax refund/credit of direct taxes, except refund of withholding taxes and corporate quarterly income taxes; and d. Perform such other related function as may be assigned. D-2 Indirect Taxes Section a. Act on appeals and protests of taxpayers regarding assessments on indirect taxes and conduct hearings on these appealed cases to arrive at a correct assessment of tax liabilities; b. Process claims for tax refund or credit involving erroneous or illegal payments of indirect taxes; c. Review action taken by other units on all claims for tax refund or credit on indirect taxes; and acd d. Perform such other related function as may be assigned. IV. Repealing Clause This Order supersedes the provisions of Revenue Administrative Orders 2-80 dated October 2, 1980 and 3-82 dated March 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