Amending Certain Portions of RMO No. 11-2014 Relative to the Policies, Guidelines and Procedures in the Periodic Clean-Up of Accounts Receivable/Delinquent Accounts

October 12, 2015 REVENUE MEMORANDUM ORDER NO. 022-15 SUBJECT : Amending Certain Portions of RMO No. 11-2014 Relative to the Policies, Guidelines and Procedures in the Periodic Clean-Up of Accounts Receivable/Delinquent Accounts TO : All Internal Revenue Officials and Others Concerned In order to properly monitor the Bureau's Accounts Receivable and Delinquent Accounts (AR/DA) and provide management with timely and meaningful information for policy making purposes, RMO No. 11-2014 dated February 7, 2014 is hereby amended as follows: 1. "III. POLICIES AND GUIDELINES. In the clean-up of the ARs/DAs, the following policies and guidelines must be observed: xxx xxx xxx 13. For all Offices required to accomplish and submit inventory of ARDA cases, the revised form for Updates of Delinquent Accounts under Operations Memorandum No. 3-2013 dated April 15, 2013 as amended by RMO No. 11-2014, is further amended and shall be now called "Inventory List of Delinquent Accounts" (Annex F) and for inclusion of columns requiring the date of assignment of docket to Seizure Agent per respective Units of Arrears Management Team (Annex F.1) , and columns requiring the ARDA classification codes. The submission of the aforesaid inventory list in hard and soft copies shall be on or before 10th day following the close of the month." xxx xxx xxx 2. The following Annexes prescribed in RMO No. 11-2014 are also hereby amended: Reference Reference Annexes Annexes in this in RMO No. 11-2014 Annex Description RMO Annex C Guidelines in Determining the Degree Annex "A-1" of Collectability of AR/DA Cases Annex E Guidelines in the Determination of Annex "A-2" AR/DA Case Classification Codes The summary of the changes made on the abovementioned annexes are shown in Annex "A" hereof. Moreover, the Guidelines on How to Fill Out the Inventory List of Delinquent Accounts (Annex "G") is likewise hereby provided, for uniformity in accomplishing the said inventory list. All revenue issuances or portions thereof which are inconsistent herewith are hereby amended, modified or repealed accordingly. This Order shall take effect immediately. CAIHTE (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX A Matrix of Changes on Accounts Receivable (AR)/Delinquent Accounts (DA) Case Classification ANNEX A-1 Guidelines in Determining the Degree of Collectability of AR/DA Cases If the status Degree of code is - Status Scenarios Collectability 00 These are AR/DA cases which are newly created, 1 where no collection enforcement actions have yet been undertaken or no subsequent events, as enumerated in the succeeding items, have transpired or occurred. 01 If the AR/DA case is the subject of taxpayer's 3 application for compromise settlement due to financial incapacity 02 If the AR/DA case is the subject of taxpayer's 3 application for compromise settlement due to doubtful validity of the assessment 03 If the AR/DA case is the subject of taxpayer's 3 application for abatement of penalties where all penalties imposed has the possibility of being abated 04 If the AR/DA case is the subject of taxpayer's 2 application for abatement of penalties where only the surcharge and compromise penalty and not the interest may be abated 05 If the AR/DA case is the subject of taxpayer's 1 application for abatement on the ground that the collection is higher than the amount sought to be collected 06 If the AR/DA case is covered by the taxpayer's 0 application for Tax Amnesty Program pursuant to Republic Act No. 9480 07 If the AR/DA is the subject of taxpayer's 2 administrative protest 08 If the AR/DA is the subject of taxpayer's judicial 2 protest 09 If the AR/DA is the subject of taxpayer's application 1 for installment 10 If the AR/DA is the subject of the filed complaint by 2 the BIR with the Department of Justice (DOJ) 11 If there is existence of a circumstance that would 0 warrant the suspension of the collection enforcement proceedings 12 If there is existence of a circumstance that would 0 warrant the write-off of the tax liabilities 13 If collection enforcement remedies were already 1 executed by the Seizure Agent 14 If there is legal issue for resolution 2 15 If the taxpayer voluntarily settled the delinquent 1 account without collection enforcement made. LEGEND: 0 No possibility that the AR/DA can be collected 1 High possibility that the AR/DA can be collected 2 There is a low possibility that the AR/DA can be collected 3 There is a very low possibility that the AR/DA can be collected ANNEX A-2 Guidelines in the Determination of AR/DA Case Classification Codes III. The next two (2) characters after identifying the nature of the self-assessed tax or the assessment issued, determine the status code, which can be any of the following: xxx xxx xxx "p. 15 If the taxpayer voluntarily proposed to settle the delinquent account without collection enforcement made" IV. The next characters after the eight (8) previous characters shall refer to the specific ground/reason for the taxpayer's application of administrative relief ( e.g. , Abatement, installment, compromise settlement, protest against the assessment, etc.), or the specific reason for tagging the AR/DA case by the BIR such as under the "suspense" or "for write-off" classification. xxx xxx xxx "9. For AR/DA case with assigned status codes of "05", "06" or "15", indicate "00" for the specific reason code considering that there are no sub-reasons that are identified under these status codes. 10. For AR/DA case with assigned status code of "13", indicate the specific reason code corresponding to the circumstance that warranted such status: 1. "A With Preliminary Collection Letter (PCL) Only" 2. "B With PCL and Final Notice Before Seizure (FNBS)" 3. "C With PCL, FNBS and Warrant of Distraint and/or Levy (WDL)" 4. "D Taxpayer refused to pay delinquent account (full/partial)" V. The last character of the case classification code pertains to action taken or decision of the authorized Revenue Official: xxx xxx xxx "10. For AR/DA cases with assigned status code of "13": 1. "A Mailed" 2. "B Return to Sender" 3. "C Served" 4. "D Garnished bank accounts only" 5. "E Garnished assets other than bank accounts" 6. "F Seized real and/or personal properties awaiting auction sale" 7. "G Forfeited real and/or personal properties resulted to tax sale, awaiting redemption" 8. "H Forfeited real and/or personal properties resulted to successful sale, awaiting redemption" 9. "I Referred to legal service for enforcement of legal remedies"" "11. For AR/DA cases with assigned status code of "14": 1. "P Pending resolution" 2. "B legal issue resolved in favor of BIR" DETACa 3. "C Legal issue resolved in favor of taxpayer"" xxx xxx xxx ANNEX F Accounts Receivables/Delinquent Accounts ANNEX F-1 Accounts Receivables/Delinquent Accounts