Waiver of the Defense of Prescription Under the Statute of Limitations

June 29, 2012 REVENUE MEMORANDUM CIRCULAR NO. 029-12 SUBJECT : Waiver of the Defense of Prescription Under the Statute of Limitations TO : All Revenue Officials, Employees and Others Concerned This Circular is being issued to clarify the form to be used for Waiver of the Defense of Prescription under the Statute of Limitations prescribed in Sections 203, 222 and other related provisions of the National Internal Revenue Code of 1997, as amended. acSECT Background Revenue Memorandum Order (RMO) No. 20-90 dated April 4, 1990 was issued to provide guidelines in the proper execution of the Waiver of the Statute of Limitations under the National Internal Revenue Code (hereinafter referred to as "Waiver"). RMO No. 20-90 prescribed the use of a particular waiver form and required that there should be no deviation from such form. On August 2, 2001, Revenue Delegation Authority Order (RDAO) No. 05-01 was issued. Aside from authorizing subordinate officials to sign Waivers, RDAO No. 05-01 introduced a new Waiver form. Subsequently, Revenue Memorandum Circular (RMC) No. 06-05 dated February 2, 2005 was issued to circularize the salient features of the decision of the Supreme Court in the case of Philippine Journalists, Inc. v. Commissioner of Internal Revenue , G.R. No. 162852, promulgated on December 16, 2004, to wit: "1. A waiver of the statute of limitations under the Tax Code must conform strictly with the provisions of Revenue Memorandum Order No. 20-90 in order to be valid and binding. xxx xxx xxx" (emphasis supplied) The statement in RMC No. 06-05 citing the Supreme Court decision that "a waiver of the statute of limitations under the Tax Code must conform strictly with the provisions of Revenue Memorandum Order No. 20-90" led some to believe that the Waiver form prescribed under RMO No. 20-90 should be used instead of the waiver form mandated under RDAO No. 05-01. Clarification The aforecited Supreme Court decision pertains to a case involving a tax assessment for the year 1994 and a waiver executed in 1997. Thus, in resolving the case, the relevant BIR issuance is RMO No. 20-90 and not RDAO No. 05-01 which took effect only in 2001. The provisions of RMO No. 20-90 should be strictly complied with in order for a Waiver to be valid. However, the Waiver form prescribed in RMO No. 20-90 should no longer be used as the same has been revised per RDAO No. 05-01. A copy of the Waiver form prescribed under RDAO No. 05-01 is hereto attached as Annex "A" for reference. aHcACT All concerned revenue officials and employees are hereby enjoined to give this Circular as wide a publicity as possible. (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX A WAIVER OF THE DEFENSE OF PRESCRIPTION UNDER THE STATUTE OF LIMITATIONS OF THE NATIONAL INTERNAL REVENUE CODE I, ______________ of _______________________________ request for approval by the Commissioner of Internal Revenue for more time to submit the documents required in connection with the investigation/reinvestigation/re-evaluation/collection enforcement of my/its _____________________ tax liabilities for the year _______. I/We hereby waive the defense of prescription under the statute of limitations prescribed in Sections 203 and 222, and other related provisions of the National Internal Revenue Code, and consent to the assessment and/or collection of tax or taxes of said year which may be found due after investigation/reinvestigation/re-evaluation at any time before or after the lapse of the period of limitations fixed by said sections of the National Internal Revenue Code but not later than ________. The intent and purpose of this waiver is to afford the Commissioner of Internal Revenue ample time to carefully consider the legal and/or factual questions involved in the determination of the aforesaid tax liabilities. It is understood, however, that the undersigned taxpayer/taxpayer represented below, by the execution of this waiver, neither admits in advance the correctness of the assessment/assessments which may be made for the year above-mentioned nor waives the right to use any legal remedies accorded by law to secure a credit or refund of such tax that may have been paid for the same year pursuant to the provisions of Sections 204 and 229 of the National Internal Revenue Code. The period so stated herein may be extended by subsequent waiver in accordance with existing rules and regulations of the Bureau of Internal Revenue. Executed this _________ day of __________ in ________________ Philippines. _________________________________ ACCEPTED BY: TAXPAYER OR DULY AUTHORIZED Commissioner of Internal Revenue SIGNATORY ___________________ By: POSITION ___________________________ ______________________ REVENUE OFFICIAL/POSITION WITNESS _____________ __________ OFFICE DATE ACKNOWLEDGMENT Republic of the Philippines) S.S. ____________________) In the City of _______________, on this ______ day of _____________, personally appeared before me _____________, with (government issued identification) No. ____________ issued at ___________ on __________, in his/her capacity as _____________ of ____________, known to me and to me known to be the same person who executed the foregoing waiver for and in behalf of the said taxpayer, and he/she acknowledged to me that the same is the voluntary act and deed of ______________________, and that he/she is duly authorized to sign the same. WITNESS MY HAND AND SEAL at the place and on the date first above written. Notary Public Notary Public Doc. No. ______ Until ________ Page No. ______ PTR No. _____ Book No. ______ Issued at _____ Series No. ______ On __________