Delinquent Accounts Records Verification

February 29, 1972 REVENUE MEMORANDUM ORDER NO. 07-72 SUBJECT : Delinquent Accounts Records Verification TO : All Revenue Officials and Personnel Concerned Starting with the month of March, 1972 and for the remaining period of FY 1971-72 there shall be instituted and vigorously sustained a Delinquent Accounts Records Verification in order to rid the Lists of Collectibles of those accounts which for one reason or another can not be collected. This is a necessary pre-requisite before any collection technique can produce effective and satisfactory results and in reducing the present collectible accounts to a realistic level. The Revenue Operations Head (Collection) shall be responsible for developing procedures and controls needed in this activity and for the over-all supervision of the bureau-wide implementation of this project. Regional Directors and Revenue District Officers shall be responsible for the satisfactory execution of this program in their respective jurisdictions and for setting up the administrative processes for its expeditious completion. These officials shall assign the work to 1) all collection personnel under their respective offices who have been disqualified from performing functions involving collection and handling of cash and 2) to as many of their other office and field personnel as can be drawn away from routine office and field work without impairing normal operations. In order that the same problem shall not repeat itself in the future, there shall be organized in the Collection Branch in every Regional Office, an accounting unit which shall be responsible in establishing and maintaining a systematic recording and control of receivable accounts in accordance with accepted accounting technique. The staffing of the accounting units shall be from collection personnel assigned in their respective jurisdictions having accounting or bookkeeping background. At the National Office level, the participation in this project of departments and divisions under them shall be as follows: 1. All departments and divisions which by their functions handle, process and review tax dockets shall submit an inventory list as of March 15, 1972 of all active tax dockets in their custody, giving the following information: a) name and address of taxpayer, b) assessment and/or demand number, c) tax year involved, d) kind of tax, e) amount of tax and f) remarks. The inventory list shall include only tax cases having due dates prior to December, 1971. 2. Management Planning Department. a. The Organization and Methods Division shall assist the Collection Department in writing up procedures, forms and other administrative issuances which will be needed in this project. b. The Training Division shall assist in preparing training materials and in the training of personnel who shall assume responsibility in keeping an accurate accounting and reporting of delinquent accounts in their respective jurisdictions. Collection Agents concerned shall be given seminars on their functions under the TPAO system and also responsibility under the new scheme of retention and release of revenue allotments to local governments (RA Nos. 5185 and 6258). 3. Technical Services Departments. a. Data Processing Center shall print out the latest updated lists of collectible accounts. Based on these lists, it shall also print Statements of Account with confirmation slips which shall be mailed to the taxpayers as a means of verifying the correctness of the receivable accounts appear-in the lists submitted by Data Processing Center. b. The Tax Information Division shall be responsible for the effective dissemination of information to the taxpaying public on the aims and purposes of the program and the important role its cooperation shall play in ensuring success thereof. 4. Administrative Services Department. a. General Services Division shall be responsible for the expeditious mailing of Statements of Account and referral of all correspondence involving collection matters to the Collection Department. b. Records Division shall prepare a list of all active tax dockets in its custody which shall be furnished to the Collection Department as aid in tracing whereabouts of tax dockets. It shall also furnish, when requested, reconstructed copies from microfilm of tax dockets reported lost or missing. c. Property Division shall be responsible for supplying the needs of the offices participating in this project such as office supplies, office equipments, mimeographing service, etc. In order that Management shall be fully and timely informed on the bureau-wide progress of the project, monthly progress reports on a form to be provided for the purpose shall be submitted by; 1. Revenue District Officers to the Regional Directors having supervision not later than the 5th day following the close of the month subject of the report, furnishing a copy to the Revenue Operations Head (Collection). 2. Regional Directors to the Commissioner of Internal Revenue, Attn.: Revenue Operations Head (Collection), not later than the 10th day following the close of the month subject of the report. He shall also submit 1) a report of the accomplishments of his office for the month and 2) another report consolidating the accomplishments of his office and those of revenue district offices under his supervision. 3. The Chief, Tax Account Division, to the Revenue Operations Head (Collection), not later than the 10th day following the close of the month subject of the report. 4. The Revenue Operations Head (Collection), to the Commissioner of Internal Revenue, furnishing a copy each to the two deputies of the Commissioner, not later than the 20th day following the close of the month subject of the report, a consolidated report of all units required to submit progress report of accomplishments. At the termination of FY 1971-72 (June 30, 1972), all reporting units shall submit final reports in accordance with the reporting procedure and time for submission required in the submission of the progress report of accomplishments. The final reports shall not only indicate what has been accomplished by each reporting unit but shall also include the number of personnel assigned to the project. A form for this purpose shall be provided to all reporting units. Every account listed in the list of collectible accounts shall be reviewed and its collectibility scrutinized by a member of the review staff who shall submit his findings and recommendation to a committee created to pass upon their recommendations. Under Republic Act No. 5203 there are 3 supervisory levels of responsibility for the collection of delinquent accounts by summary remedies. A committee shall be created in every regional office that shall pass action on tax cases falling under the regional and district levels of responsibility to collect i.e. above P5,000.00 and not over P20,000.00 for the Regional Director and P5,000.00 and below for the Revenue District Officer. Another committee shall also be created in the National Office to pass action on tax cases involving amounts over P20,000.00 Under a separate order to be issued, the Deputy Commissioner for Operations, as Chairman, and the Revenue Operations Heads, for Assessment Department, Collection Department, and Legal Department, as members, shall draw up the guidelines to be followed in decision making on tax cases to be submitted by review staff to the committees and also decide on the composition of those committees to be created. This body shall also submit to me not later than July 31, 1972 an evaluation report on the results achieved by this project. This Order shall take effect immediately. MISAEL P. VERA Commissioner of Internal Revenue