Prescribing the Relation of the National Office to Lower Operating Levels and Outlining the Duties and Functions Thereof

November 2, 1964 REVENUE ADMINISTRATIVE ORDER NO. 14-64 SUBJECT : Prescribing the Relation of the National Office to Lower Operating Levels and Outlining the Duties and Functions Thereof TO : All Internal Revenue Officers, Employees & Others Concerned For the guidance of all internal revenue officers and employees, this Revenue Administrative Order is promulgated to prescribe the relation of the National Office to lower operating levels and to define the duties and functions of staff and line offices of the Bureau of Internal Revenue. I. THE ORGANIZATION OF THE BUREAU OF INTERNAL REVENUE SHOWING THE RELATION OF THE NATIONAL OFFICE TO LOWER OPERATING LEVELS AND OUTLINING THE FUNCTIONS OF EACH LEVEL. A: Functions of the Bureau of Internal Revenue in General . Subject to the continuing control, direction and supervision by the Secretary of Finance, the National Office of the Bureau of Internal Revenue is located in Manila. Its functions are confined to executive direction, nation-wide policy formulation and statistical controls. The set up of the Bureau of Internal Revenue is decentralized except for some limited operations. Its functions are characterized by the separation of staff and line responsibilities so that ordinarily a taxpayer has no direct contact with the Commissioner and members of his executive staff. The mission of the National Office is to develop broad nationwide policies and programs for the administration of internal revenue laws, and to direct, guide and coordinate the endeavors of the Bureau of Internal Revenue. It likewise collates, compile and maintains statistical controls. Because of the multiplicity of its functions, the vast area covered by its operations, and the large number of its officers and employees outside Manila, the Bureau of Internal Revenue is divided into geographical areas and concurrently by functions with lines of authority which culminate in the National Office at Manila. Geographically, the Philippines is divided into twenty (20) Regional Offices, each of which is administered by a Regional Director who shall hold office in the city of municipality within the region designated to be the station town of the Regional Office. B: Organization Plan At the head of the Bureau is the Commissioner assisted by two Deputy Commissioners. The organization plan of the Bureau detailed below embraces all operating levels and is effective beginning November 2, 1964. Functionally, administration is divided into assessment, administrative services, legal, collection , management and planning, inspection, specific tax and special services. LexLib The following are the divisions, units or branches under each department or region including the office of the Commissioner and Deputy Commissioner. (O m i t t e d) II. FUNCTIONS OF THE DIFFERENT UNITS IN THE BUREAU OF INTERNAL REVENUE : A. National Office 1. COMMISSIONER The Commissioner is in charge of the operations of the Bureau of Internal Revenue and is responsible to the Secretary of Finance for the strict enforcement and proper execution of the tax laws and regulations administered by the Bureau of Internal Revenue. To carry out this function, the Commissioner shall, subject to the approval of the Secretary of Finance, promulgate all needful rules, orders, circulars, or regulations for the general direction and supervision relative to the assessment and collection of all internal revenue taxes, fees and charges, and shall submit recommendations intended to meet the budgetary requirements of the Bureau of Internal Revenue, including personnel, their appointments and promotions. The Commissioner may likewise issue orders or circulars of information or instructions for the guidance and compliance of the officers and employees in the internal administration of the Bureau of Internal Revenue. (a) Tobacco Board Allocates funds from the Tobacco Inspection Fund for the promotion of the Tobacco Industry: (1) The promotion of the trade of the Philippine tobacco abroad specially in the United States; (2) The improvement of the processes in the local production of leaf tobacco and tobacco manufacturers; and (3) To help the Philippine manufacturers in the exportation of standard quality cigars in the United States. (b) Accountable Forms Committee Receives, stores, and acts as custodian of documentary and strip stamps and other accountable forms; fills in requisitions of such accountable items; conducts periodic inventory thereof; and prepares and submits to the proper authorities monthly, semi-annual and annual reports of stamps received, requisitioned and balances of the same. 2. DEPUTY COMMISSIONERS They assist the Commissioner in the operations of the Bureau and the administration of the tax and regulatory law as well as the exercise of executive leadership of the highest level and act as Commissioner in the absence, illness or disability of the Commissioner or when designated to do so. 3. ASSESSMENT DEPARTMENT Performs staff, advisory and supervisory functions, implements policies formulated by the Commissioner on a nation-wide scope as regards the assessment of all income, estate and inheritance and gift, miscellaneous taxes administered by the Bureau of Internal Revenue; administers and directs the assessment functions insofar as the above-mentioned taxes are concerned and recommends the adoption of instructions, rules and regulations, manuals, forms, etc. in furtherance thereof; sets up standard audit and examination techniques and procedures relating to all businesses and occupations; processes, evaluates and reviews audit and examination reports; exercises supervision and guidance over regional and revenue district offices, if delegated by the Commissioner, on operational matters relating to assessment of the taxes mentioned in the preceding sentence; plans and recommends the allocation, transfer and promotion of all the personnel performing assessment functions except those under the Specific Tax Department; and keeps records of and prepares statistical charts on the performance of personnel doing assessment functions. (a) Income Tax Division Evaluates, reviews and recommends for approval office and field audit reports of fieldmen relating to income, residence, franchise, insurance and bank taxes involving deficiency assessments of over P20,000.00 or where the deficiency assessment even if less than P20,000.00 but if added to the original tax will exceed P40,000.00 and in the case of estate, a inheritance and gift taxes involving deficiency assessments in excess of P10,000.00 or where the deficiency assessments even if less than P10,000.00 but if added to the original tax per return filed will exceed P20,000.00; conducts post review of selected cases closed in regional offices relating to the taxes above-mentioned to assure uniformity of action and maintenance of high standards of tax enforcements; passes upon protested cases prior to action by the Appellate Division; formulates programs of intensification of tax collection; prepares and revises returns, forms and reports of examination, prescribing the necessary data to be contained therein; recommends standard techniques and procedures on examination and field and office audit work regarding assessments; prescribes uniform method of classifying; numbering, indexing and processing income tax, estate and inheritance and gift tax, bank tax, premium tax, and franchise tax returns, gathering data for statistical purposes and of processing of office and field audit reports in regional offices; keeps and maintains records and statistics germane to division activities; and performs such other duties as may be directed by the Commissioner, Deputy Commissioner or the Revenue Operations Head (Assessment). LibLex (b) Business Tax Division Evaluates, reviews and recommends for approval field audit reports of fieldmen relating to sales and percentage, compensating, privilege tax on business and occupations, amusement, mining, firearms, and documentary stamp taxes, and forest charges on cases involving deficiency assessments of over P10,000.00 or where the deficiency assessments even if less than P10,000 but if added to the original tax due will exceed P20,000.00; conducts post review of selected cases closed in regional offices relating to the taxes above-mentioned to insure uniformity of action and maintenance of high standards of tax enforcement; passes upon protested cases prior to action by the Appellate Division; formulates programs of intensification of tax collection; prepares and revises returns, forms and reports of examination, prescribing the necessary data to be contained therein; recommends standard techniques and procedures on examination, field and office audit work regarding assessments, prescribes uniform method of classifying; numbering, indexing and processing of percentage tax returns, amusement tax returns and other forms or returns submitted in connection with the administration of the above-mentioned taxes, gathering date for statistical purposes and of processing office and field audit reports in regional offices; keeps and maintains records and statistics germane to division activities; and performs such other duties as may be directed by the Commissioner, Deputy Commissioner or the Revenue Operations Head (Assessment). (c) Withholding Tax Division Evaluates, reviews and approves audit reports of fieldmen relating to withholding tax on wages; withholding tax at source and withholding taxes withheld by government offices under Republic Act No 1051; passes upon protested cases relative to withholding tax prior to action by the Appellate Division; formulates programs on intensification of tax collection on withholding; prepares and revises returns, forms and reports, prescribing the necessary data to be contained therein; recommends standard techniques and procedures on examination of withholding taxes; processes all withholding tax returns on wages including the processing of withholding tax; investigates withholding tax cases in Regional Offices Nos. 4, 5 and 6; processes all withholding tax returns at source and collates data therefrom to determine the income from fixed and determinable sources of all taxpayers resident or otherwise; processes and collates all withholding taxes withheld by government offices from private entities under Republic Act 1051; maintains complete records of all withholding tax employers, enterprises and all government agencies for the purpose of determining the income allocable to each individual taxpayer; keeps and maintains records and statistics germane to division activities; and performs such other duties as may be directed by the Commissioner, Deputy Commissioner or the Revenue Operations Head (Assessment). (d) Narcotics Drugs Division Develops, evaluates and coordinates policies and programs relating to control and supervision of importation, manufacture, exportation, distribution and traffic of narcotic drugs; prepares and submits statistical reports on narcotics to the Permanent Central Opium Board of Geneva, Switzerland, enforces provisions of Narcotic Drugs law and revenue regulations; keeps and maintains records and statistics germane to division activities; and performs such other duties as may be directed by the Commissioner, Deputy Commissioner or the Revenue Operations Head (Assessment). 4. ADMINISTRATIVE DEPARTMENT Performs staff and advisory functions in implementing the administrative services policies and programs; directs the performance of housekeeping activities; develops policies for the placement, development and training of employees; and acts on general vouchers for miscellaneous expenses except those for travel and claims for per diems. (a) General Services Division Provides general services support including the up-keep of office buildings; procures and distributes office space to the different units of the bureau; handles correspondence and develops and executes the records management program; provides information needed in the maintenance of office space, communications, security, repairs and alterations; handles records in the national office and microfilming of documents of cases elevated to the National Office; provides mailing services and intra-office messenger services when required; acts as official repository of all records and archives in general; and issues certifications, true copies of such records whenever required by existing laws and regulations; and keeps custody and control of all bonds filed with the Bureau. (b) Training Division Determines training needs in the Bureau; conducts training on both in-service and pre-service basis; develops appropriate employee self-development programs; and handles orientation courses for new employees. (c) Cash and Disbursement Division Directs and supervises the issuance of documentary stamps, residence certificates and other accountable forms to all collection agents and clerks; sells and accounts for all strip stamps for cigars, cigarettes, smoking and chewing tobacco and official and auxiliary labels for distilled spirits and wines; handles cash, collections and disbursements for the bureau; processes salary and policy loans; acts on correspondence relative to stamps and accountable forms, salaries and wages; and takes custody of all stamps, accounting forms, government bonds and certificate of indebtedness. (d) Personnel Division Executes the personal administration program relative to recruitment, selection and placement of personnel; processes appointments, promotions; and other matters relative to personnel; keeps custody of personnel records; and performs such duties or prepares such reports as may be directed by the Commissioner, Deputy Commissioner or the Revenue Operations Head (Administrative Services). (3) Property Division Takes charge of procurement and distribution of office supplies, forms, equipments and motor vehicles and other transportation services, maintains inventory of all stock disposition, publications and BIR forms; attends to the printing, binding and reproduction of annual reports, pamphlets and other regular publications; and keeps custody of all office, property equipment and confiscated articles. 5. LEGAL DEPARTMENT Performs staff, advisory and supervisory functions in implementing the revenue laws and other laws administered and enforced by the Bureau; acts as chief legal adviser and consultant in the interpretation and/or execution of internal revenue laws and regulations and other laws affecting its personnel; supervises the prosecution of tax cases in courts; prepares the implementing regulations and circulars relative to the internal revenue laws and other laws administered by the bureau; handles appealed cases prior to court action; and plans and recommends the allocation, transfer and promotion; of all the personnel performing legal functions. (a) Law Division Supervises legal work involving questions of interpretation of the tax laws administered by the bureau and regulations promulgated in pursuance thereof; prepares drafts of proposed tax legislation; prepares rulings, opinions, regulations and circulars implementing tax laws; conducts continuous research for the purpose of determining the flaws of existing tax laws and prepares recommendations for the improvements thereof; prepares the monthly bulletin embodying important rulings or decisions of the Commissioner of Internal Revenue, the Court of Tax Appeals and the Supreme Court on internal revenue cases, regulations and other related matters. LLphil (b) Appellate Division Acts on appeals and protests of taxpayers in disputed tax cases; reviews actions taken by other units on all claims for refund or tax credits irrespective of amount except refund of withholding taxes; and makes recommendations covering all points of law and facts covering any case before the same is appealed to the Court of Tax Appeals. (c) Litigation Division Represents the Commissioner in trial of internal revenue cases in collaboration with the Solicitor General and Provincial and City Fiscals; prepares pleadings, briefs and memoranda filed with the Supreme Court of Court of Tax Appeals in connection with internal revenue cases pending before them; assists the Solicitor General, Provincial and City Fiscals on the preparation and briefing on civil cases filed by the government against delinquent taxpayers; recommends prosecution of violators of the penal provisions of the National Internal Revenue Code and the regulations promulgated thereunder; and prepares evidences for the successful prosecution of each case. (d) Prosecution Division 1. To study and take proper action on cases referred to it for criminal prosecution of persons violating internal revenue laws and other laws administered by the Bureau of Internal Revenue; 2. To appear before the fiscals or other prosecutors as representative of the Commissioner in the prosecution of criminal complaints for violation of internal revenue laws and regulations; 3. To actively assist the fiscals and other prosecuting officials in the successful prosecution of criminal cases involving tax evasion and/or violations or the internal revenue laws and regulations and other laws administered by the Bureau of Internal Revenue; 4. To coordinate its work with those of other divisions and units of the Bureau of Internal Revenue and other government agencies with a view to prosecuting all violators of revenue laws and regulations and other laws administered by the Bureau of Internal Revenue; 5. To study and act on cases involving revenue officials and employees recommending criminal prosecution and to assist the fiscal and other prosecutors in the prosecution of such officials and employees; 6. To do and perform such other duties and functions as may be required in the successful prosecution of tax evaders and violators of revenue laws and regulations and other laws administered by the Bureau of Internal Revenue. (Rev. Memo. Order No. 5-66, dated April 29, 1966) 6. Collection Department Performs staff, advisory and supervisory functions in the collection of all taxes, fees, charges and imposts prescribed in the National Internal Revenue Code and other tax laws and regulations; formulates programs and supervises established procedures and techniques in the collection of delinquent accounts; and plans and recommends the allocation, transfer and promotion of all personnel performing collection functions. (a) Delinquent Accounts Division Develops and coordinates procedures relating to the collection of delinquent accounts; supervises and controls functions of all Collection Branches and keeps records of their activities and accomplishments for statistical purposes; acts on appeals of collection cases; issues warrants of distraint and levy and garnishment for cases demanded or assessed where the amount involved exceeds P10,000.00; enforces rules and regulations relative to submission of reports of collections; acts on applications for payment of taxes and backpay certificates; and processes applications for tax clearance and issues corresponding certificates thereon for taxpayers under the jurisdiction of Regional Offices Nos. 6, 7, and 8. (b) Collection Agents Division Develops policies and procedures relating to accounting and reporting of all internal revenue taxes received from all regions and directs supervision and control of cash clerks. 7. MANAGEMENT & PLANNING DEPARTMENT Performs staff and advisory functions in developing, evaluating integrated management planning program; develops policies and procedures governing management program in budget administration and examination, organization of personnel and their proposed utilization; makes studies to improve the organization procedures, and method of program implementation; determines desirable changes in existing tax laws or the need to enact new tax measures; and conducts continuing analysis and appraisal or results of operating programs. (a) Budget Division Directs budget and financial planning activities of the Bureau; plans and processes the annual budget estimates; and recommends programs and procedures covering financial activities carried out in the Bureau. (b) Organization and Methods Staff Develops systematic plans of effecting continuing program of improving activities in all agencies in the Bureau; undertakes studies on the formulates patterns for organizational structure, work simplification and other areas of management for more efficient, economical and effective operations; and gives technical advice and assistance to line and staff units on management matters. (c) Accounting Division Keeps and prepares general ledgers and special journals, trial balance, financial statements and reports, journal vouchers and transactions not recorded in special journals; reconciles treasury account and credit refund checks; processes all vouchers and warrants drawn against the appropriations of the Bureau; and handles subsidiary ledgers for general accounts. (d) Statistical Division Prepares and keeps estimates of income and statistical data on actual collections and income estimates; compiles other statistical information on business and economic conditions which may provide information for tax legislation; and prepares charts, drafts and statements of internal revenue collections. 8. INTERNAL AUDIT DEPARTMENT 1. Performs staff, advisory and supervisory functions; 2. Plans and develops an internal audit program for the Bureau of Internal Revenue; 3. Conducts an independent continuing review and appraisal of all internal revenue operations and activities as a basis for protective and constructive service to management; 4. Plans and carries out a program of assisting management in insuring and maintaining the highest standards of honesty, integrity and competence of internal revenue personnel; 5. Recommends policies and programs for the improvement of internal revenue operations and activities; 6. Submits to the Commissioner of Internal revenue periodic and special reports and recommendations based on the review, investigation or evaluation of activities, operations of personnel performance; and 7. Performs such other related functions as may be assigned to it from time to time by the Commissioner or Deputy Commissioner of Internal Revenue. (a) Operations Audit Division 1. Plans and develops a management audit program for the Bureau of Internal Revenue; 2. Determines whether all activities of the Bureau are conducted efficiently, effectively and economically and whether they are being conducted in accordance with law and established rules and regulations; 3. Determines whether the reports required of staff and operating units are accurate, useful and promptly submitted; 4. Conducts an independent continuing review and appraisal of all procedural and other operational activities of the Bureau; 5. Assists management in achieving efficiency and effective internal revenue administration and operation; 6. Undertakes such special projects, studies and/or investigation as may be assigned to it from time to time by the Commissioner or Deputy Commissioner of Internal Revenue or the Revenue Operations Head (Internal Audit). (b) Personnel Audit Division 1. Develops, coordinates and controls internal security policies and programs of the Bureau of Internal Revenue; 2. Undertakes character and background investigations of prospective employees; 3. Investigates all complaints against BIR employees and advises the Personnel Division of such investigations; 4. Plans and conducts programs for the prevention of accidents involving personnel on duty and investigates the causes of such accidents if and when they occur; 5. Performs such other functions as may be assigned to it from time to time by the Commissioner Deputy Commissioner of Internal Revenue or the Revenue Operations Head (Internal Audit). (c) Fiscal Audit Division 1. Plans and develops a fiscal audit program for the Bureau of Internal Revenue; 2. Conducts an independent continuing review and appraisal of all financial operations of the bureau; 3. Determines whether all revenues due the government under all revenue laws administered by the Bureau are duly collected and properly accounted for; 4. Reviews and appraises methods of acquiring property, supplies and equipment to determine compliance with approved specifications and standards; 5. Determines whether such property, supplies and equipment are properly utilized and maintained and recommends, when necessary, measure to prevent or minimize wastage; 6. Conducts spot check on cash and property accountability of collection agents and/or cash clerks; 7. Performs such other functions as may be assigned to it from time to time by the Commissioner or Deputy Commissioner of Internal Revenue or the Revenue Operations Head (Internal Audit). 9. SPECIFIC TAX DEPARTMENT Performs staff, advisory and supervisory functions in implementing the assessment program on specific taxes; implements policies formulated by the Commissioner on a nation-wide scope as regards the assessment of specific taxes; administers and directs the assessment functions insofar as specific taxes are concerned and recommends the adoption of instructions, rules and regulations, manuals, forms, etc., in furtherance thereof; exercises supervision and guidance over regional and inspection district offices as delegated by the Commissioner on operational matters relating to assessment of specific taxes; plans or recommends the allocation, transfer and promotion of all the personnel performing assessment functions relative to specific tax; and keeps records of and prepares statistical charts on the performance of personnel under its jurisdiction. LLjur (a) Tobacco & Miscellaneous Tax Division Evaluates and reviews filed audit reports on specific taxes on cigars, cigarettes and other manufactured products of tobacco, matches, firecrackers, manufactured oil and other fuels, coal, bunker fuel oil, diesel fuel oil, cinematographic films, playing cards and saccharine on cases involving assessments in excess of P10,000.00 and prepares appropriate action thereon; formulates programs and proposes regulations relative to the administration of specific taxes on the above-mentioned articles; formulates and recommends policies, methods and procedures for the effective control and supervision of all establishments manufacturing or dealing in articles as enumerated in the early part of this sub-paragraph; passes upon protested cases involving specific taxes on all articles subject to specific tax except distilled spirits prior to action by the Appellate Division; processes all requests for operation of establishments manufacturing or dealing in articles subject to specific tax except distilled spirits; processes all requests for release of imported articles from the Bureau of Customs either as finished products or as raw materials to be used in the manufacture of cigars, cigarettes, matches, firecrackers, manufactured oil and other fuels, coal, bunker fuel oil, diesel fuel oil, cinematographic films, playing cards and saccharine; processes all requests for tax clearance of cinematographic films before censorship by the Philippine Board of Review for Moving Pictures; processes and recommends for approval bonds filed by taxpayers relating to specific taxes administered by the division; keeps and maintains records and statistics germane to division activities; and develops programs and methods to promote the efficiency of the personnel in the division and in the alcohol & Tobacco Tax Branch in Regional Office. (b) Alcohol Tax Division Evaluates and reviews field audit reports on specific taxes on alcoholic products involving assessments in excess of P10,000.00 and prepares appropriate action thereon; formulates programs and proposes regulations relative to the administration of specific taxes on alcoholic products; formulates policies, methods and procedures for the effective control and supervision of all establishments dealing in alcoholic products; passes upon protested cases involving specific taxes on alcoholic products prior to action by the Appellate Division; processes all requests for operation of establishments manufacturing or dealing in alcoholic products; processes all requests for release of imported articles from the Bureau of Customs either as finished products or as raw materials to be used in the manufacture of alcoholic products; processes and recommends for approval all bonds filed by taxpayers relating to specific taxes on alcoholic products; and develops programs and methods to promote the efficiency of the personnel in the Division and the Alcohol & Tobacco Tax Branch in Regional Offices. (c) Tobacco Inspection Service Implements and enforces the provisions of Sections 182(A)(3)(m) and 302 of the National Internal Revenue Code in relation to Act No. 2613, as amended, and Regulations Nos. 17 and 47, Revenue Regulations Nos. V-50, V-52 and V-59 all of the Department of Finance; establishes general and local rules on classification, grading, marking and packing of leaf tobacco for domestic sales, factory use of for export; establishes adequate rules defining the standard and type of leaf and manufactured tobacco which may be exported; inspect cigars, cigarettes, leaf tobacco, partially manufactured products of tobacco for export; and supervises the operation of and issuance of L-3 and B-14(a) permits to wholesale and retail leaf tobacco dealers. (d) Specific Tax Enforcement Division Counter-checks the permissive and enforcement functions of regional offices through spot-checking, inspection and stock-taking of such persons, firms, or establishments manufacturing, producing, processing, dealing or handling articles subject to specific taxes; conducts appropriate surveillance in the field for the apprehension of fake, counterfeit, spurious and re-used stamps or labels and the illicit printing for importation of such fake, counterfeit, spurious and re-used stamps or labels or of dyes, tags, apparatus or mechanical contrivances for the printing or manufacturing thereof or of untaxpaid articles and the affixture of incorrect value of strip stamps or labels to articles subject thereto or other unlawful processes relative to the payment of specific taxes; conducts periodic examination and/or investigation of the books of accounts and other records of all cigars and cigarette factories, compounders and denaturers of alcohol or other persons or establishments handling or engaged in the manufacture or sale of articles subject to specific taxes, as well as other articles or raw materials used in the production of articles subject to specific taxes; initiates or directs the investigation or reinvestigation of such persons, firms or establishments engaged in the manufacture, production, or sale of articles subject to specific taxes (including those possessing or handling such articles and of the raw materials or things used in the manufacture thereof) upon receipt or discovery of sufficient evidence indicating tax fraud or whenever such act is called for or warranted; gathers or seizes, through legal processes, any evidence which may support deficiency specific taxes or those which may support court action for civil and/or criminal liability for tax evasion against such persons, firms or establishments without prejudice to the prosecution of all infractors of the law on the matter; and upon direction of the Commissioner, or reviews tax cases involving persons, firms or establishments which have been elevated to the National Office by Regional Offices involving assessments of specific taxes in excess of P10,000.00. 11. SPECIAL SERVICES DEPARTMENT Performs staff, advisory and supervisory functions relative to the various special services of the Bureau; recommends policies formulated by the Commissioner of Internal Revenue on a nation-wide scope as regards the dissemination of tax information, implementation of the tax census law, gathering, processing and analysis of statistics, and the application of scientific methods in the analysis of stamps and labels; recommends the adoption of instructions, rules, regulations, manuals, forms, etc. in furtherance of the dissemination of tax information, implementation of the tax census law, gathering and processing of statistics and the determination of the genuineness of stamps and labels, set up standard techniques and procedures relating to the tax census law and the gathering and processing of data and plans and recommends the allocation, transfer and promotion of all personnel in the department. a. Tax Census Division Supervises the taking and consolidating into a national tax census all the information contained in the statement of assets, income and liabilities of persons, individuals and corporations; and develops and coordinates tax census data as basis for tax reforms and tax policies. b. Tax Information Division Plans and arranges means of disseminating information on the application and enforcement of tax laws to every media; gathers, prepares and distributes information materials such as pamphlets, primers, charts, posters, etc.; conducts tax clinics, seminars, conferences, panel discussions and other methods to facilitate mass information; and performs such other functions relating to tax information. c. Data Processing Center prepares and maintains a list of all taxpayers in the country containing all the information about the transactions of the taxpayer with the Bureau of Internal Revenue and such other data on the taxpayer as may have been made available to the Bureau; prepares and maintains an overall list of delinquent taxpayers; prepares and maintains an overall list of filers of all kinds of returns required by the Bureau; processes and collates all data and statistics relating to internal revenue; prepares payrolls, checks, refunds checks and treasury warrants otherwise issued by the Bureau; and performs such other functions relating to the processing of data. LLpr d. Laboratory Center Formulates, develops and carries out programs for the application of scientific method to the solution of problems of tax enforcement; furnishes technical advise and assistance to officials of the Bureau of Internal Revenue in the field of chemistry and physics; examines and analyses samples, formulas and processes of permittees to determine taxable status; and examines samples which may be referred to it from other units of the Bureau. 12. OFFICE OF INTERNATIONAL OPERATIONS Performs staff, advisory and supervisory functions; implements policies formulated by the Commissioner of Internal Revenue on a nationwide scope as regards internal revenue law as it bears relation to the business of taxpayers the substantial portion of which involves foreign tax laws, foreign exchange and/or foreign element and import and export taxation; provides technical research support to tax conventions and internal revenue extension services abroad; plans, formulates, develops and recommends techniques, procedures, regulations, legislation, treaties, policies or other related matters as shall improved the assessment and collection of taxes from non-residents or as it bears upon the foreign transactions or resident or domestic taxpayers; and performs such other related functions as may be assigned to it from time to time by the Commissioner of Internal Revenue. A. Revenue Attache Service Unit Gathers, Collates and analyzes data from and coordinates the activities of revenue attaches abroad; formulates, develops and recommends policies bearing on revenue extension services in foreign countries of posts, obtains and/or provides data to support thru the Department of Foreign Affairs, Commerce, Labor, and other government agencies, needed or furnished by revenue attaches; and performs liaison work between the Bureau of Internal Revenue and the Department of Foreign Affairs. b. Technical and Policy Research Unit Serves as administrative and technical research support to the Commission in the matter of tax conversions and/or treaties, both existing and proposed; conducts researches on all tax laws and tax policies of foreign countries; attends to request from foreign countries for information about Philippine tax laws; furnishes technical information to Philippine foreign services establishments abroad; and plans, develops, formulates and recommends the adoption of particular policies, legislative proposals and treaties as shall improve the treatment of Philippine taxpayers (individual and corporate) in foreign countries as well as the corresponding or appropriate treatment of non-resident of foreign taxpayers with income from sources within or doing business in, or having taxable transactions in the Philippines. c. Audit and Intelligence Unit Gathers, collates and analyzes data on Philippine export and imports and as it bears relation to Philippine taxes; coordinates for the Commissioner all foreign tax investigations; audits and verifies tax liabilities of domestic or resident taxpayers, as well as non-resident Filipino citizens, receiving income from sources without the Philippines, when the same constitutes as substantial portion of the total income, unless verification thereof is assigned by the Commissioner of Internal Revenue to the Regional Office, audits and verifies the taxable transactions and tax liabilities of non-resident taxpayers, including those receiving from domestic taxpayers by way of royalties, dividends, rents, rentals, management fees, technical services fees, and other similar forms of payments, unless the verification thereof is assigned by the Commissioner of Internal Revenue to the Regional Office; and audits and verifies in appropriate cases the tax liabilities of a domestic taxpayer as shall be assigned by the Commissioner of Internal Revenue, especially where the substantial portion of the business or transactions of the domestic taxpayer involve foreign exchange or dealings abroad or overseas operations and/or any other foreign element. B. REGIONAL OFFICES 1. Regional Director General superintendence over the collection of all internal revenue taxes, charges, fees and imposts and administration and enforcement of internal revenue laws and regulations; performs supervisory functions over the activities or the Alcohol & Tobacco Tax, Income & Business Tax, Investigation, Collection, Accounting Machines, Legal and Litigation, Administrative, Tax Census and Accounting Branches of the Regional Office, Inspection District Offices and Collection Agent's Offices; implements policies, programs and standard procedures prescribed by the National Office; plans and recommends allocation, intra-regional transfers and promotions of regional personnel; exercises ordinance power necessary in the proper administration of the region not inconsistent with existing laws, rules and regulations, policies formulated by the Commissioner; and maintains liaison and contacts with other regional offices of other national offices in connection with the administration of the tax laws within the region. The Regional Director is likewise given the authority and jurisdiction to close tax cases in accordance with the following: (a) Income, Bank, Franchise & Premium Taxes Cases where the deficiency tax, if any, including penalties, per report of investigation which may involve one or more years does not exceed P20,000 . Where the deficiency tax, if any, does not exceed P20,000.00 but if added to the original tax due per return will result in a total tax in excess of P40,000.00 , the report should not be closed in the Regional Office that should be forwarded to the National Office for approval. If there is no deficiency tax per report but the original tax due per return exceeds P40,000.00, the report should likewise be forwarded to the National Office for approval. (b) Estate and Inheritance and Gift Taxes Cases where the deficiency tax, if any, including penalties, does not exceed P10,000 . 00 . Where the deficiency tax does not exceed 10,000.00 but if added to the original tax due per return will result in a total tax in excess of P20,000 . 00 , the report should not be closed in the Regional Office but should be forwarded to the National Office for approval. If there is no deficiency tax per report but if the original tax due per original return or amended return exceeds P20,000.00, the report should likewise be forwarded to the National Office for approval. (c) Percentage Taxes Cases where deficiency tax, if any, including surcharge, does not exceed P10,000 . 00 . Where deficiency tax does not exceed P10,000.00 but if added to the original tax due per return filed covering a period of not less than six months or per statement if no returns have been prescribed , will result in total tax in excess of P20,000 . 00 , the report should not be closed in the Regional Office but should be forwarded to the National Office for approval. If there is no deficiency tax per report but if the original tax due per return filed for a six month period or per statement if no returns have been prescribed exceeds P20,000 . 00 , the report should likewise be forwarded to the National Office for approval. (d) Specific Taxes Cases involving deficiency assessment not exceeding 10,000.00. (e) After approval of the report cited in sub-paragraphs (a), (b) and (c), they should be returned to the Regional Office for preparation and release of the letter of demand. prll (f) All tax cases involving fraud are to be forwarded to the National Office for approval irrespectively of the amount of deficiency tax, including those reported by fieldmen of the Investigation Branch without any deficiency assessments. The Regional Director shall be under the direct supervision and control of the Commissioner of Internal Revenue and Deputy Commissioner of Internal Revenue. In general, the powers and functions heretofore exercised by the Commissioner of Internal Revenue over the administration and enforcement of internal revenue laws and regulations are delegated to and vested in the Regional Director . Such power and functions shall extend to those which by necessary implications are deemed to be included in or to flow out from the powers delegated, subject to the limitations provided in this Revenue Administrative Order and all other circulars or orders issued by the National Office. Each Regional Director is assisted by an Assistant Regional Director and nine chiefs of the following branches; (1) Alcohol & Tobacco Tax (2) Income & Business Tax (3) Investigation (4) Collection (5) Accounting Machines (6) Legal & Litigation (7) Administrative (8) Tax Census and (9) Accounting. 2. Assistant Regional Director Assists the Regional Director in the administration and enforcement of internal revenue laws and regulations within the region. 3. Alcohol & Tobacco Tax Branch Evaluates, reviews and recommends all reports on deficiency assessments of specific taxes not tainted with fraud; elevates, thru the Regional Director, to the National Office, all specific tax cases involving deficiency assessments in excess of P10,000.00; prepares letters of demand based on tax determination reports, jurisdiction of which is within the Regional Office; keeps records and compiles statistics; maintains statistical charts on the performance of personnel under its jurisdiction and prepares and submit statistical and informative reports required by the National Office. 4. Income & Business Tax Branch Evaluates, reviews and recommends office and field audit report of fieldmen relating to taxes, charges and fees except specific taxes, not tainted with fraud; elevates, thru the Regional Director, to the National Office all non-fraud cases involving deficiency assessments in accordance with the above-mentioned limitations on the nature and amounts of cases to be elevated to the National Office; prepares demands and assessment notices based on tax determination reports, jurisdiction of which is within the regional office, receives, classifies, numbers and indexes or otherwise processes income, estates, inheritance, gift, percentage, bank, premiums, amusement tax returns and other returns required by the bureau and prepares the necessary assessment notices and/or letters of demand for release to taxpayers; classifies, sorts, and forwards to inspection district offices, the duplicate of the returns filed in the region for examination upon instructions of the Regional Director; keeps records and compiles statistics; maintains statistical charts on the performance of personnel doing assessment functions; and prepares and submit statistical and informative reports required by the National Office. 5. Investigation Branch Conducts investigation of tax fraud cases within the jurisdiction of the Regional Office; recommends to the Commissioner of Internal Revenue, thru the Regional Director, the approval of all field audit reports submitted by fieldmen of the branch irrespective of the amount of deficiency tax; and submits periodical reports to the National Office for the purpose of compiling statistics and formulating policies regarding tax fraud cases. 6. Collection Branch Supervises the collection activities of the region; maintains records of the collection of delinquent accounts and other related statistical matters; supervises the collection work of Chief Revenue Officers and Collection Agents of the region prepares follow up letters to taxpayers for the collection of delinquent taxes in the region; enforces collection by distraint and levy whenever necessary; and maintains, recommends and prepares charts and graphs germane to branch activities. 7. Accounting Machines Branch Lists and indexes tax data of returns, assessments, collections, tax refunds and other statistical data. 8. Legal & Litigation Branch Serve as chief legal adviser to the Regional Director and his staff; supervises the performance and review as occasion may require of all legal matters performed within his region; passes upon the sufficiency and due execution of all bonds filed by taxpayers within the region; and acts on all requests for refund or tax credits before forwarding the case to the National Office. 9. Administrative Branch Does the housekeeping work for the regional office; attends to personnel matters, general services, procurement of equipment, supplies and office space; maintains, records and compile vital statistics in the form of graphs and charts; carries out such responsibilities by keeping and maintaining in an orderly manner the records of the regional office and issues certified copies of records required by existing laws and regulations; keeps records of performance ratings and attends to employee relations and other matters involving personnel management; and acts as property custodian of the Regional Office. 10. Tax Census Branch Supervises the taking of the national tax census in the region; maintains tax registers; and processes tax census statements. 11. Accounting Branch Controls allotments of the region; processes and reviews reports of disbursements, vouchers, and other disbursement documents; keeps accounts of special disbursing officers, journals and analysis of obligation; and prepares monthly subsidiary statements. C. INSPECTION DISTRICT OFFICE 1. Chief Revenue Officer Under each Regional Director are Chief Revenue Officers. He is highest revenue official in the inspection district. Each revenue district is composed of fieldmen performing assessment work and collection agents and cash clerks performing collection work. They have direct contact in dealing with taxpayers. Performs purely line responsibility and yeoman functions; directs contact in dealing with taxpayers through his fieldmen; exercises powers and duties incident to collection activities through the collection agents and cash clerks; supervises the examination and audit of all tax returns and such other functions as are related to the assessment and collection of internal revenue taxes; forwards reports of examination in such other reports as are required to be submitted directly to the Regional Director; handles the processing and screening of applications for tax clearance of persons going abroad or those seeking Philippine citizenship and such other applications as are required by other government offices and agencies; signs and issues tax clearance certificates within the inspection district and maintains records, samples statistics and keeps performance charts and graphs. 2. Examiner Handles the investigation of all tax cases not tainted with fraud within the inspection district; gathers data and other statistics for compilation; assists in the collection of delinquent accounts; and performs such other duties as may be assigned by the Chief Revenue Officer. 3. Collection Agent Receive tax returns and/or payments of internal revenue taxes and transmits all collections to the National Treasury; conducts the campaign within the municipality or city relative to the collection of delinquent accounts; canvasses the municipality or city to determine potential taxpayers; reports to the Regional Director or to the Chief Revenue Officer discoveries of violation of internal revenue laws for appropriate investigation; executes warrants of garnishments and warrants of distraint and levy; handles the advertising and sale of seized properties and also the administration of property forfeited to the government; and approves the registration of books of accounts and invoices submitted by taxpayers within the municipality or city. Other than the station town of the inspection district office. III. REPEALING CLAUSE The provisions of this Revenue Administrative Order revokes Memorandum Order No. V-634, amendments thereto, and all other orders, circulars or portions thereof which are inconsistent herewith. IV. EFFECTIVITY The provisions of this Revenue Administrative Order shall become effective as of November 2, 1964. (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue APPROVED: (SGD.) RUFINO HECHANOVA Secretary of Finance