Memorandum of the President Prohibiting Investigation of Amnesty Tax Returns Filed Under Presidential Decree No. 1740 and the Features of its Implementation

June 4, 1981 REVENUE MEMORANDUM CIRCULAR NO. 19-81 SUBJECT : Memorandum of the President Prohibiting Investigation of Amnesty Tax Returns Filed Under Presidential Decree No. 1740 and the Features of its Implementation A. The Presidential Directive . For the information and guidance of all concerned, the memorandum of the President dated 18 May 1981 are hereby reproduced. "18 May 1981 "MEMORANDUM TO - The Commissioner of Internal Revenue "SUBJECT : Prohibiting the Commissioner of Internal Revenue or His Duly Authorized Representative from Conducting an Investigation on the Amnesty Tax Returns Filed Under Presidential Decree No. 1740, Subject to Certain Exceptions. "WHEREAS, under Presidential Decree No. 1740, individual taxpayers were given the opportunity to avail of an administrative tax amnesty; casia "WHEREAS, the issuance of Presidential Decree No. 1740 was to prepare the taxpaying public to face a new challenge and to demonstrate their maturity and responsibility towards the government without fear nor compulsion in whatever form; WHEREAS, to meet this new challenge, it is imperative that taxpayers who have availed themselves of the administrative tax amnesty be assured of the government's protection. "WHEREFORE, the Commissioner of Internal Revenue or his duly authorized representative is hereby prohibited from conducting an investigation on amnesty tax returns filed under Presidential Decree No. 1740, except upon lawful order of the Court. "(SGD.) President of the Philippines" B. Features of the Presidential Memorandum 1. Amnesty tax returns filed by an individual taxpayer under PD 1740 shall not be subject to investigation, except upon lawful order of the court. The amnesty tax return referred to in the memorandum means the regular individual income tax returns (BIR Forms 1701 or 1701A or 1701C) or an amended return (BIR Form No. 1745) filed by an individual taxpayer in availing of the benefits provided by PD 1740 as prescribed in Section 5 of Revenue Regulations No. 9-80. Although the Memorandum refers to "amnesty tax returns", the investigation of which when filed by an individual is prohibited, the prohibition applies to the investigation of any income tax liability for any of the taxable years 1974-1979 for which any of the amnesty tax returns was filed by the taxpayer. cdt C. Effect of the Presidential Directive on Ongoing Tax Audits . 1. The audit and investigation of internal revenue tax liabilities under existing policy and procedures is not suspended. However, if an individual taxpayer manifests his intention to avail of the benefits by accomplishing and filing with the Revenue District Officer a form (Annex A) prescribed therefor, the audit and investigation of his income tax liability will be discontinued. The audit and/or investigation of his other internal revenue tax liabilities, if any, for any of the years 1974 - 1979, is not covered by the prohibition. 2. In auditing an individual taxpayer's other internal revenue tax liabilities, the revenue examiner may look into his books of accounts and other pertinent records but whatever determination he may make for such other internal revenue tax purposes shall not be used as a basis for a correlative determination for income tax purposes . aisa dc D. Coverage of PD 1740 . 1. Section 2 of PD 1740 provides, among other things, than an individual may avail of the provisions of the said decree with respect to income tax liabilities covering the period 1974-1979, except deficiency income taxes assessed on or before the effectivity of the decree. The decree took effect on September 17, 1980. Accordingly, deficiency income taxes assessed on or before September 17, 1980 are already beyond the scope of PD 1740. However, deficiency income tax assessed after September 17, 1980 may still be the subject of the amnesty . acd 2. Corporations are definitely not covered by PD 1740 and the memorandum of the President. E. Publicity All internal revenue officers and others concerned should give this Circular as wide publicity as possible. RUBEN B. ANCHETA Acting Commissioner ANNEX A The Regional Director Revenue Region No. ____ Bureau of Internal Revenue ____________________ S i r : Please be informed that I intend to avail of the benefits granted under Presidential Decree No. 1740 and under the memorandum of the President to the Commissioner of Internal Revenue dated 18 May 1981 prohibiting investigation of amnesty tax returns. In view thereof I request that the investigation of my income tax liability/liabilities for the year/s _________ be discontinued, subject to the condition that if, after August 31, 1981, I have not filed an amnesty tax returns under the provisions of Section 5 of Revenue Regulations No. 9-80, the Bureau of Internal Revenue may proceed to the tax audit of my internal revenue tax liabilities under its existing policies and procedures. cdt Very truly yours, ____________ Taxpayer