Verification of Status of Delinquent Accounts

February 4, 1980 REVENUE MEMORANDUM ORDER NO. 05-80 SUBJECT : Verification of Status of Delinquent Accounts TO : The Revenue Service Chief (Collection), Regional Directors, Chiefs of Collection Branches, Revenue District Officers, and Others Concerned The latest lists of accounts receivables contain a number of accounts involving income tax returns filed or assessments issued a number of years ago. While some of these accounts may be subject of protracted court litigations, we can not discount the possibility that a number of these accounts have been paid or superseded and therefore should no longer remain outstanding in the inventory of accounts receivables. To the extent that accounts which should have been written off still appear in the lists of accounts receivables, the Bureau's inventory of accounts receivables is unrealistic. The long period that such doubtful accounts have been carried in the inventory of receivables make it imperative that their present status be examined so that appropriate dispositive action can be taken immediately. For this purpose, it is necessary that all accounts which are ten (10) years old or over from the date they are due be closely examined, classified, and verified. I. The procedure for accomplishing this is as follows: (a) Closely examine accounts listed in the DPC lists titled (1) "Form 40 Accounts - Over five years old" and (2) "ITR Accounts - Over five years old", to distinguish accounts over ten years old from accounts which are less than ten years old. (b) Segregate accounts supported by available office records (docket/papers for Form 40 accounts, and income tax return/collection letters for ITR accounts) from accounts not supported by office records. Prepare two corresponding lists of at least four (4) copies each, the original and duplicate for use in this operation, the triplicate for performance audit officers if required, and the quadruplicate to be submitted to the Collection Service. (c) Verify and update the status of accounts with supporting office records. If covered by a court case, consult the Legal Service or Legal Branch as the case may be. If an account is the subject of an administrative protest or request for reconsideration/reinvestigation, consult the proper unit (legal service or branch, audit divisions in the national office, assessment divisions, assessments branch, district office, etc.) (d) Implement immediate appropriate action to collect a collectible account. (e) Assign to fieldmen accounts which are not supported by office records, including those supported by office records but require further field verification. For this purpose, a letter (sample form attached as Annex "A") shall be delivered personally to the taxpayer concerned or his duly authorized representative by the fieldmen assigned to the account. Fieldmen are enjoined to exercise utmost courtesy and tact in persuading the taxpayer to assist the Bureau in updating his tax records. To document the field verification, fieldmen shall accomplish a report form, a specimen of which is attached as Annex "B". A supplementary narrative report may also be submitted whenever considered necessary. (f) Prepare a case file or folder containing all available records including the docket and/or file copies of subsequent collections or verification efforts such as Delinquent Account Record Verification Information sheets (DARV), Reference Slips, Abstracts of entries in Unit incoming and outgoing Registers, accomplished Annexes "A" and "B" herein, and other pertinent papers for each account. II. Thereafter, the final decision on the disposition of the verified tax account shall be indicated by proper authority on the face of said Annex "B". In case the final decision is to cancel the account, the corresponding ATCA shall be immediately be prepared by the Chief, Receivable Accounts Division, and approved by the Revenue Service Chief (Collection) for national accounts, and by the Chief Collection Branch, and approved by the Regional Director for regional and district accounts. Collection Units entitled to or furnished with copies of said ATCAs and their listings shall use these records as one of their reference materials in case of future need, and shall observe the retention period for such documents as prescribed in the Bureau's Records Retention and Disposal Scheme. III. All Revenue Service Chiefs, Division Chiefs, Chiefs of Branches, Chiefs of other Units are required to immediately respond to inquiries made in pursuance of this Order. Any delay in making response to inquiries made shall be transmitted to superior officers for remedial action. IV. Copies of Regional/District plans or orders to implement projects under this Order (Verification of Status of Certain Delinquent Accounts) shall be furnished the Commissioner, Attention: The Revenue Service Chief (Collection). V. Project operations, including terminal reports, shall be submitted not later than June 30, 1980. This Order shall take effect immediately. (SGD.) RUBEN B. ANCHETA Acting Commissioner TAN A5239-J1139-A-0 ANNEX Republic of the Philippines Ministry of Finance BUREAU OF INTERNAL REVENUE Quezon City Date Gentlemen/Sir/Madam: We are in the process of establishing a new and accurate data base for our recently acquired IBM 376/148, computer, and we feel that it is to our mutual advantage if you can assist us in clearing your listed tax liability, described as follows: Assessment No. ____________________ Kind of tax ________________ Amount __________________________ Date Due __________________ This liability may be cleared either by submitting to us proof of payment if already paid, or if not yet paid by paying the same within ten (10) days from receipt hereof. We regret that this request may have caused you a certain degree of inconvenience but it must be recognized that it is imperative we start with an accurate date base on our inventory of outstanding delinquent tax accounts before we feed more data to our new computer system. cdtai Very truly yours, ROMULO M. VILLA Assistant Commissioner TAN-V4656-G0636-A-3 Asst. Commissioner Romulo M. Villa Bureau of Internal Revenue Diliman, Quezon City Attention: Chief, Collection Enforcement Division (Room 904, National Office Bldg.) S i r : Please be informed that my tax liability assessed under Assessment Notice/Demand Letter No. ________________, 19____ has already been paid under Official Receipt No. _____________ dated _______________ in the amount of P_______________, as shown in the attached xerox copy. Very truly yours,