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

October 10, 1995 REVENUE ADMINISTRATIVE ORDER NO. 7-95 SUBJECT : Statement of Functions of the Legal Service Including the Divisions Under it Down to Section Level TO : All Internal Revenue Officers and Others Concerned I. OBJECTIVE : This Order aims to define the organization and detailed functions of the Legal Service in accordance with the goal and thrust underlying the streamlining of the Bureau pursuant to Executive Order No. 132 as implemented under RAO No. 4-93 dated December 1, 1993. II. ORGANIZATION : The LEGAL SERVICE shall be composed of four (4) Divisions. These Divisions with their respective Sections are: A. Law Division 1. Regulation and Ruling Section 2. Bills and Research Section B. Litigation and Prosecution Division 1. Litigation Section 2. Prosecution Section C. Appellate Division 1. Refund and Credit Section 2. Appeal and Protest Section D. Personnel Inquiry Division 1. Hearing Panel I 2. Hearing Panel II 3. Hearing Panel III III. FUNCTIONS : LEGAL SERVICE shall : 1. Perform staff, advisory and consultative functions with respect to the interpretation of revenue laws and implementing regulations/issuances and other legal matters; 2. Develop and recommend policies, work programs, standards, guidelines and procedures on activities pertaining to work including the interpretation of the provisions of the National Internal Revenue Code (NIRC), tax treaties and other laws pertinent and/or necessary for the operation of the Bureau; 3. Conduct studies and researches on matters relative to tax cases under the jurisdiction of the Legal Service; 4. Prepare for the Commissioner's approval, all rulings and opinions on Legal questions which are of first impression. No case involving questions which are of first impression shall originate from, and be issued by the Regional Offices; 5. Review all proposed revenue issuances; 6. Review decisions on administrative cases against erring revenue personnel; 7. Review all pleadings to be filed in the Prosecutor's Office and the Courts as well as enforce and supervise the prosecution of civil and original cases involving taxation and cases against revenue personnel; 8. Review administrative decisions on contested tax cases and claims for tax refund/credit involving questions of law(s) and/or questions of fact(s) and law(s); 9. Evaluate actions of other revenue offices referred to it pertaining to legal questions for adherence to law, facts, policies, procedures and standards; 10. Prepare tax legislations, regulations and other issuances implementing/amplifying revenue laws, tax treaties and other laws pertinent and/or necessary for the operation of the Bureau; 11. Formulate policies for the Commissioner's approval on protests against assessments involving questions of law(s) and/or question of fact(s) and law(s); evaluate requests for reconsideration of such assessments and recommend the reinvestigation of contested or disputed cases to the proper office if the evidences/arguments adduced by the parties so warrant; 12. Study and recommend appropriate action on offers of taxpayers to compromise and/or abate or cancel their tax liabilities on the ground of financial inability to pay and/or doubtful validity of the assessment or that the said tax liabilities or portion thereof are unjustly or excessively assessed; 13. Represent revenue officials and personnel in civil and criminal cases brought against them in connection with the lawful performance of their official functions; 14. Prepare for public dissemination digest on rulings and court decisions; 15. Monitor and coordinate the activities pertaining to legal matters with the Legal Divisions of the Regional Offices; and 16. Perform such other related functions as may be assigned. A. LAW DIVISION shall : 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), tax treaties and other laws related thereto and laws pertinent and/or necessary for the operations of the Bureau; 2. Prepare ruling, i. e., on legal issues of first impression involving interpretation of the NIRC, tax treaties and other laws related thereto and laws pertinent and/or necessary for the operations of the Bureau; 3. Prepare for public dissemination digest on rulings and opinions and/or codify the same; 4. Coordinate the uniform application of tax laws, regulations and court decisions; 5. Formulates policies and guidelines regarding processing or requests for tax exemption and claims for informers' reward; 6. Process all tax treaty relief applications; 7. Prepare rules and regulations and other issuances involving legal matters for the proper implementation of the provisions of the NIRC, tax treaties and other laws related thereto; 8. Review all proposed revenue issuances prior to the approval of the Commissioner; 9. Provide assistance to the Commissioner in the formulation of internal revenue tax legislation for submission to the President and/or legislative body thru the Department of Finance (DOF); and 10. Perform such other related functions as may be assigned. A-1. Regulation and Ruling Section shall : 1. Prepare and codify rulings, opinions or comments on questions relating to the application of tax laws, tax treaties and provisions of the NIRC; 2. Prepare rules and regulations, circulars and other issuances required to implement tax laws administered by the Bureau; 3. Formulate policies and guidelines regarding processing of requests for exemption and claims for informers' reward; 4. Process all tax treaty relief applications; and 5. Review all proposed revenue issuances; and 6. Perform such other related functions as may be assigned. A-2. Bill and Research Section shall : 1. Recommend tax legislations on the basis of its operations and experiences; 2. Prepare drafts of revenue tax legislations on amendments to the NIRC for submission to the President and/or the legislative body thru the DOF; 3. Conduct studies and researches and prepare comments and recommendations on any proposed legislative measure that will affect internal revenue collection and administration or which may have tax implications; and 4. Perform such other related functions as may be assigned. B. LITIGATION AND PROSECUTION DIVISION shall : 1. Develop and recommend policies, work programs, standards, guidelines and procedures relating to litigation work on civil liability and criminal prosecution as well as cases against revenue officials and employees for the violations of the NIRC and other related laws and regulations; 2. Implement said policies, plans, work programs and procedures relating to litigation and prosecution work; 3. Represent the Commissioner of Internal Revenue in all Courts and quasi-judicial and administrative offices in the investigation, trial or hearing of internal revenue civil and criminal cases as well as cases filed against officials and employees of the Bureau of Internal Revenue and tax informers in collaboration General and the Department of Justice; 4. Prepare pleadings, briefs and memoranda to be filed with the said courts and offices in connection with the cases pending before them; 5. Prepare for public dissemination digests on court decisions; 6. Monitor and/or coordinate the activities of the Legal Divisions in the Regional Offices with respect to litigation and prosecution work; and 7. Perform such other related functions as may be assigned. B-1. Litigation Section shall : 1. Institute civil actions to effect collection of delinquent taxes; 2. Act as government counsel in the investigation, hearing and trial of all civil actions and file pleadings necessary for the prosecution of said tax cases as well as cases filed against erring employees of the Bureau; 3. Interview witnesses, evaluate evidence and confer with the solicitors of the Office of the Solicitor General in connection with these cases; 4. Act on cases involving said taxes which are similar to or may be affected by cases pending in the prosecutor's office or court preparatory to the institution of civil action for collection: 5. Represent revenue officials and personnel in civil cases brought against them in connection with the lawful performance of their official functions; and 6. Perform such other related functions as may be assigned. B-2. Prosecution Section shall : 1. Study and act on tax cases referred to the Division for criminal prosecution of persons violating internal revenue laws and other laws administrated by the Bureau of Internal Revenue and on cases involving erring revenue personnel recommended for criminal prosecution; 2. Represent the Commissioner of Internal Revenue and assist fiscals and other prosecuting officers in the prosecution of criminal cases involving tax evasion and/or violations of internal revenue laws and regulations and of criminal cases against erring revenue personnel; 3. Represent revenue officials and personnel in criminal cases brought against them in connection with the lawful performance of their official functions; 4. Recommend deportation of alien taxpayers and make necessary representation as government counsel before the Deportation Board; C. APPELLATE DIVISION shall : 1. Develop and recommend 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 and claims for tax refund/credit; 3. Act on appeals of taxpayers on protested tax cases involving questions of law(s) and/or fact(s); 4. Process claims for tax refund and credit involving erroneous or illegal collection of taxes whenever there are question of law(s) and/or fact(s); 5. Receive and evaluate evidence in support of taxpayers' defense on disputed tax assessments and claims for tax refund/credit; 6. Refer to the appropriate offices claims for tax refund and credit which are directly filed by the taxpayers with the Appellate Division prior to normal audit of the return; 7. Coordinate with other offices for the verification and investigation of facts and documents of claims for tax credit and refund of internal revenue taxes; 8. Issue notice of conference hearing, subpoena witnesses and subpoena duces tecum when necessary for the resolution of pending tax cases; and 9. Perform such other related functions as may be assigned. C-1. Refund and Credit Section shall : 1. Prepare guidelines and procedures on claims for tax refund/credit involving questions of law(s) and fact(s); 2. Process claims for tax refund or credit involving erroneous or illegal collection of taxes only when there are questions of law(s) and/or fact(s) raised; 3. Review action taken by other units on all claims for tax refund/credit of taxes involving questions of law(s) and/or fact(s); 4. Coordinate with other offices claims for tax credit and refund of taxes for verification of facts and compliance with documentation requirements; 5. Issue notices of conference hearing, subpoena witnesses and subpoena duces tecum when necessary for the resolution of claims for tax refund/credit; and 6. Perform such other related functions as may be assigned. C-2. Appeal and Protest Section shall : 1. Act on appeals and protest of taxpayers regarding assessments of taxes and conduct hearings on these appealed cases and on appeals/protests which have been earlier denied by the Regional Office; 2. Prepare decisions on protested tax cases where issues raised are questions of law(s) and/or fact(s); 3. Issue notices of conference hearing, subpoena witnesses and subpoena duces tecum when necessary for the resolution of protested tax cases; and 4. Perform such other related functions as may be assigned. D. PERSONNEL INQUIRY DIVISION shall : 1. Develop and recommend policies, work programs, standards, guidelines and procedures pertaining to the hearing of administrative cases of revenue personnel; 2. Conduct hearing of administrative charges, formally by the Internal Security Division (ISD), involving illegal enrichment cases against revenue personnel and violations of Anti-Graft and Corrupt Practices Act, offenses punishable under the Administrative code of 1987 (EO No. 292), Civil Service laws and existing revenue laws, rules, regulations, memoranda and circulars; 3. Evaluate testimonies taken as well as evidence presented and submitted by the parties; 4. Conduct researches on questions of law presented during formal investigation/hearing; 5. Prepare and recommend appropriate actions/decisions on administrative cases heard; 6. Maintain a systematic compilation of court and administrative decisions and doctrines for reference; and 7. Perform such other related functions as may be assigned. The Sections (Hearing Panels I-III) of the Personnel Inquiry Division shall perform identical functions enumerated above. IV. REPEALING CLAUSE : This Order supersedes the provisions of all revenue issuances inconsistent with this Order. V. EFFECTIVELY : This Order shall take effect immediately. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue