Publishing the Amendment Effected by Presidential Decree No. 1457 to Section 324 of the National Internal Revenue Code of 1977

October 30, 1978 REVENUE MEMORANDUM CIRCULAR NO. 089-78 SUBJECT : Publishing the Amendment Effected by Presidential Decree No. 1 457 to Section 324 of the National Internal Revenue Co de of 1977 TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published below Section 324 of the National Internal Revenue Code of 1977, as amended by Presidential Decree No. 1457. "SEC. 31. Section 324 of the National Internal Revenue Code is hereby amended by adding a second paragraph to read as follows: 'Any provision of existing general or special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organizations or entities shall be subject to examination by the Bureau of Internal Revenue for the purpose of ascertaining whether such organizations or entities are complying with the conditions under which they have been granted tax exemptions and their tax liability, if any.'" FEATURES OF THE AMENDMENT Heretofore, tax-exempt organizations or entities, particularly foundations registered with N.S.D.B., are not investigated by the Bureau of Internal Revenue. For this reason, the Bureau is not aware as to whether compliance to the conditions imposed for its tax exemptions are made, i.e., entities enjoying tax exemption are required to keep books of accounts, file income tax return, etc. To insure that all tax-exempt organizations or entities comply with all the conditions under which they have been granted tax exemption privilege and their tax liability, the amendatory provisions empowers the Bureau of Internal Revenue to examine books of accounts of all tax exempt entities, notwithstanding the provisions of existing laws to the contrary. aisa dc EFFECTIVITY The amendment to Section 324 of the National Internal Revenue Code under Presidential Decree No. 1457 took effect on June 11, 1978, except those mentioned in Revenue Memorandum Circular No. 85-78 dated October 27, 1978. ENFORCEMENT All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. EFREN I. PLANA Acting Commissioner