Requiring Revenue Collectors to Observe, and Comply Strictly with, the Provisions of Section 612, Revised Administrative Code

January 18, 1967 REVENUE MEMORANDUM ORDER NO. 05-67 SUBJECT : Requiring Revenue Collectors to Observe, and Comply Strictly with, the Provisions of Section 612, Revised Administrative Code TO : Revenue Collectors, Cash Clerks and Others Concerned It has come to the attention of this Office that dishonored checks received in payment of internal revenue taxes have been settled or redeemed without collecting from the drawers thereof the statutory penalties imposed for late payment of taxes, in gross violation of Section 612 of the Revised Administrative Code, to wit: aisadc "Section 612. Checks receivable as money . An officer charged with the collection of revenue or the receiving of monies payable to the Government for taxes or dues, may accept payment in the form of checks drawn on any bank established in the Philippines, and when so received, such checks may be deposited by the collecting officer as money. In case any check received as herein provided is not accepted by the bank for any reason, the person who issued it shall continue to be liable for the sum due and all penalties resulting from delayed payment . "The receiving of checks as aforesaid shall cease as to any bank which shall refuse, upon demand, to receive for deposit or to cash any such check, without exchange, discount, or commission of any kind, at any point in the Philippines, where the bank may be established or may maintain an agency or branch." (Emphasis supplied) Therefore, in the settlement of dishonored checks received in payment of internal revenue taxes, interest, surcharge and compromise penalty for late payment must also be collected in case of income and transfer taxes, surcharge and compromise penalty in case of percentage taxes, and compromise penalty in case of fixed taxes. Thus, in addition to the data required in the Receipt of Settlement portion of General Form No. 106 (A) provided for in GAO Memorandum Circular No. 469, dated August 13, 1962, as implemented by Revenue Memorandum Circular No. 25-64, dated July 2, 1964, information on such additional payments should be stated therein. (Sample) RECEIPT OF SETTLEMENT Received in settlement of above (State here the kind of dishonored checks tax paid) Cash P ________________ Check No. ______ ________________ M.C. No. _______ ________________ Others _________ ________________ Total P ________________ Other form of settlement: ( State here the amount of interest, and/or surcharge and compromise penalty for late payment and the number and date of the revenue official receipt under which the same are paid .) _________________ ___________________ (Date) (Collecting Officer) Should the taxpayer refuse to pay the penalties incident to delinquency, a remark to that effect should be made in the Receipt of Settlement and a separate report thereon, containing the computations of such penalties and the reasons advanced by the taxpayer for refusing to pay such penalties, should be submitted immediately to the Commissioner of Internal Revenue, thru proper channels, for decision. In view of the foregoing, it is hereby directed that drawers of dishonored checks received in payment of internal revenue taxes be required to redeem such checks in cash and/or certified or cashier checks, plus the corresponding penalties incident to delinquency. casia Strict compliance herewith is enjoined. MISAEL P. VERA Commissioner of Internal Revenue