Disregarding Territorial Boundaries in the Collection of Delinquent Accounts within Metro Manila Area

January 15, 1979 REVENUE MEMORANDUM ORDER NO. 03-79 SUBJECT : Disregarding Territorial Boundaries in the Collection of Delinquent Accounts within Metro Manila Area TO : Regional Directors, Chiefs of Collection Branches, Revenue District Officers, District Collection Supervisors, Revenue Seizure Agents, and Others Concerned It has been observed that the delay in collecting delinquent accounts and even failure to collect in many instances had been due to the frequent transfers of collection dockets and responsibility, including recording and reporting requirements, from one revenue region or district to another for the purpose of: 1. contacting and interviewing taxpayer, as part of due process, in a place outside the territorial jurisdiction of the collection branch or revenue district which has the responsibility to collect the tax delinquency. This happens where the taxpayer could not be contacted at the address given in the return and usually used in deficiency assessment notices/demand letters. The problem is compounded in cases where the taxpayer refuses to pay and employs the "run-around" tactics through intentional, simulated or feigned change of residence or place of work, or both, which fall under the territorial jurisdiction of different regional and/or district offices; and/or cdt 2. reaching thru summary remedies taxpayer's property, particularly real estate, that is situated within the jurisdiction of a revenue region or district other than the region or district having jurisdiction over either taxpayer's residence or place of work, or both. The above situations obtain in many cases in Metro Manila area, and in lesser number in other compact urban centers like Cebu City, Bacolod City and Davao City and their environs. In order to preclude said unbeneficial and wasteful transfers of collection dockets and responsibility and thereby hasten collection enforcement work, it is necessary to relax the territorial limits of Metro Manila revenue regions and districts, in accordance with the guidelines and instructions set forth hereunder. A. APPLICABILITY These guidelines and instructions shall apply to Revenue Region No. 4-A (Manila) and its four (4) Revenue Districts in Metro Manila (excluding RD 26, Romblon Province and RD 27, Palawan Province), and Revenue Region No. 4-B (Quezon City) and its eight (8) Revenue Districts (excluding RD 36, Cavite City and Cavite Province). These may also be followed in regions whose urban centers are divided into two or more revenue districts with respect to their taxpayers whose residence, place of work and location of property are not confined within the territory of one revenue district. B. ACTIONS TO COLLECT DELINQUENT ACCOUNTS ENFORCEABLE ANYWHERE WITHIN METRO MANILA 1. Once the situs of collection responsibility has been established as prescribed herein, all collection enforcement actions on delinquent accounts from call-ups by correspondence and other persuasive efforts, the search for real properties at the Land Registration Commission and/or the offices of the six (6) Registers of Deeds for Metro Manila as well as other public and private offices, to the issuance, service, seizure and auction sale of properties under summary administrative remedies can be enforced and shall be exercised anywhere and throughout the whole area of Metro Manila unrestricted by the territorial limits and boundaries of the particular region or district concerned, and without regard to any subsequent change in residence or office or place of business, except only in exceptional cases as provided herein. 2. Any fieldman whose field collection work requires him to travel to a place within the territory of another revenue district must, before doing so, secure the written approval of his immediate supervisor, which approval shall be attached to the docket. The purpose is to document the action taken and to establish the fact that his presence within the area of another district was properly authorized. 3. The collection enforcement actions stated above does not, however, include the so-called tellering work consisting of the acceptance, receipting and accounting of tax collections, and under the payment thru the banking system the preparation and issuance of revenue tax receipts (RTR) which shall be performed strictly within the Revenue Region and District of the particular collection agent, cash clerk, RTR issuing officer, or other personnel assigned to tellering work. C. SITUS OF COLLECTION RESPONSIBILITY AND CUSTODY OF COLLECTION DOCKETS 1. Delinquent tax due per return The Revenue Region and District where the return was filed, or if filed in a different jurisdiction, to which the return was transmitted for processing, file or for further action in accordance with provisions of law and operating procedures on filing of tax returns, shall belong the responsibility to collect the unpaid tax due per return as well as the custody of the corresponding return or other substitute document including its required attachments. The regional or district office which finds in its DPC lists an account receivable that doesn't fall under its jurisdiction, or receives a mis-sent tax collection docket/papers, shall forthwith transfer the said collection docket or delinquent account together with whatever available document/paper in its possession, to the proper regional or district office, using for the purpose the transfer-out form prescribed as Annex "B" of RMO 21-77 dated May 28, 1977, with appropriate notation in case of pure error in computer listing and without supporting document/papers. 2. Delinquent deficiency tax assessed/demanded Depending on the amount of the delinquent account as delineated in RMO 21-77, dated May 28, 1977, original collection responsibility shall be fixed and shall remain with the regional and district office which determined and assessed the tax, and in whose BIR Form 40.00 (Monthly Summary of Taxes Assessed and Demanded) and/or DPC list of collectibles the particular account was listed on the basis of the address indicated in the assessment notice/demand letter as determined from the tax return, or in case of change of address, as requested by taxpayer or reported by the examining officer. Examining officers, and divisions and branches preparing assessment notices/demand letters shall endeavor to determine the exact address of the taxpayer where any kind of collection action during any stage of enforcement can be effectively executed. D. WHEN TAX DOCKET AND COLLECTION RESPONSIBILITY MAY BE TRANSFERRED The collection responsibility and the tax docket/papers covering particular delinquent accounts may only be transferred to the revenue region or district in whose territorial jurisdiction the permanent residence, office or place of business, and the real property/ies of the delinquent taxpayer are all located, as established by subsequent events, and the office making the transfer believes that such transfer will redound to a more speedy, effective and less costly collection enforcement and closing of the delinquent account. The transfer shall be made only after definite information on basic facts and circumstances to guide the receiving office has been ascertained and for this purpose the attached standard "Transfer-Out Transmittal Form" (prescribed as Annex "B-1" of RMO 21-77) must be filled up in full. This requirement will prevent premature transfers on account of generalized, incorrect or misleading information concerning the taxpayer or by a reluctant collection officer who wants to be relieved of the responsibility. This Order shall take effect immediately. cdt CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8