Procedure for Issuance of Subpoena Duces Tecum

July 26, 1982 REVENUE AUDIT MEMORANDUM ORDER NO. 3-82 SUBJECT : Procedure for Issuance of Subpoena Duces Tecum TO : All Internal Revenue Officers and Others Concerned 1. Background 1.1 The investigation of tax cases is sometimes unnecessarily delayed due to non-cooperation of taxpayers in making available their books of accounts and other accounting records for inspection, notwithstanding the following legal requirements: casia 1.11 Section 324 of the tax Code which provides that " . . . Examination and inspection . . . shall be done in the taxpayer's office or place of business or in the office of the BIR . . ."; 1.12 Section 20 of the Bookkeeping Regulations (Rev. Reg. No. V-1) which provides that ". . . All books, registers and other records, and vouchers and other supporting papers required by these regulations shall be kept at all times at the place of business of the taxpayer, subject to inspection of any internal revenue officer, and upon demand, the same must be immediately produced and submitted for inspection." 1.2 In order to deal more effectively with taxpayers who refuse to cooperate, the following audit procedures shall be followed. cd 2. Audit Procedure 2.1 The Revenue Examiner shall request the taxpayer, in writing , to make available for inspection, the pertinent books of accounts, accounting records and particular or specific documents indicating therein the time and date within which these records should be made available. 2.2 The duplicate copy of this written request, duly acknowledged/received by the taxpayer or his authorized representative shall form part of the docket of the case. 2.3 If on the appointed time and date the requested records and/or documents are not presented, an explanation for such delay shall be sought and the Examiner shall again request in writing as to when he wants the records definitely presented, a date which should be reasonable enough in order not to prejudice the government interest. 2.4 If the taxpayer fails further to present the required records at subsequent appointed date, the Examiner should request an explanation in writing to be signed by the taxpayer or his authorized representative as to why the desired records are not still available. aisa dc 2.5 Memorandum of Interview 2.51 During all the stages of the above proceedings a memorandum of interview (an informal note or instrument embodying something that a person desires to fix in memory by the aid of written word) must be promptly prepared, signed and dated by the Examiner, indicating therein the date , time , place and persons present as well as what transpired. 2.52 Since the memorandum of interview may be used in the event of a trial, the Examiner should confine the memoranda to the facts developed in the interview, and should avoid opinions, conclusions and other extraneous matters. 2.6 The Examiner in consultation with his supervisory officials shall then submit a written report, pinpointing the particular records not made available to him, the responsible officers liable, and the facts relating to the unnecessary and/or unreasonable delay in his investigation. cdt 3. Transfer of the Case to the Legal Office 3.1 The Division Chief or Revenue District Officer shall then forward the case to the Chief, Prosecution Division or Chief, Legal Branch, as the case may be, for issuance of the Subpoena Duces Tecum or filing the case in court if warranted under the circumstances. 3.2 If a Subpoena Duces Tecum is issued and the taxpayer complies to its terms, these records shall be referred back to the assessing unit for continuation of the delayed investigation. RUBEN B. ANCHETA Acting Commissioner