Modification of Revenue Memorandum Circular No. 28-82 Regarding Treatment of Fixed or Variable Transportation, Representation and Other Allowances

January 4, 1983 REVENUE MEMORANDUM CIRCULAR NO. 01-83 SUBJECT : Modification of Revenue Memorandum Circular No. 28-82 Regarding Treatment of Fixed or Variable Transportation, Representation and Other Allowances TO : All Internal Revenue Officers and Others Concerned A closer analysis of Section 2(c) of Revenue Regulations No. 6-82, which was quoted in Revenue Memorandum Circular No. 28-82 shows that transportation and representation allowances proven to be incurred for the benefit of the employer thru accounting/liquidation procedures, are not includible in the taxable income of the employees; and, such interpretation has been correctly reflected in BIR Ruling No. 164-82 dated May 6, 1982. The rationale or purpose of the ruling is to give Offices and employees the opportunity to prove that the ultimate beneficiary of said allowances is the Office or employer. Such a right to present proof should not be denied or impaired. BIR Ruling No. 164-82 is, therefore, maintained. cd i While this Office will allow the exercise of this right, it will, however, provide also the necessary guidelines in the liquidation/accounting of such allowances with the end in view or preventing such schemes as may be resorted to in order to reduce the income tax liabilities of employees. The guidelines will be issued shortly. casia This modifies, accordingly, Revenue Memorandum Circular No. 28-82 insofar as the treatment of allowances is concerned. (SGD.) RUBEN B. ANCHETA Acting Commissioner