Guidelines in the Implementation of the Laws on the Printing and Issuance of Sales Receipts or Invoices

February 2, 1979 REVENUE MEMORANDUM ORDER NO. 07-79 SUBJECT : Guidelines in the Implementation of the Laws on the Printing and Issuance of Sales Receipts or Invoices TO : All Regional Directors, Revenue District Officers, Internal Revenue Officers and Others Concerned In order to effectively and uniformly implement the laws and revenue regulations on the printing and issuance of sales receipts or invoices, there should be conducted continuing campaigns on tax information and tax enforcement in accordance with the following guidelines: aisa dc I. Tax Information Campaign . A. The tax information drive shall be a continuing campaign for tax consciousness through the dissemination of the latest amendments of the t ax co de relative to the requirements on the printing and issuance of sales receipts and/or the penalties for the violations thereof. It is incumbent upon the Regional Directors and Revenue District Officers to enlist the assistance of other Regional Offices of the National Government, local officials, Barangay Heads, the Media and various civic, cultural, social and religious groups. B. As part of this involvement, all internal revenue officials and employees, including those who are not directly involved in the enforcement of tax laws, are enjoined to familiarize themselves with the following provisions of the Tax Code and their implementing revenue regulations. 1. Sec. 216, as amended by P.D. 1457, and implemented by Revenue Regulations No. 12-78 and Revenue Memorandum Circular No. 77-78; 2. Sec. 216-A, inserted by P.D. 1255 and implemented by Revenue Regulations No. 2-78; and 3. Sec. 220-A, inserted by P.D. 1254 and implemented by Revenue Regulations No. 16-78. The heads of various units and offices shall see to it that their subordinates are knowledgeable, at least on who are required to issue sales receipts and/or invoices; who are exempted by the law; and the gravity of the offense on which the penalties of fine and imprisonment are imposed upon conviction of the offender. II. Campaign Against Non-Issuance of Sales Receipts or Invoices . A. The main objective of a continuing campaign against non-issuance of sales invoices is to enforce compliance with the requirements of issuance of sales receipts and/or invoices. B. For this purpose, the following rules are hereby promulgated: 1. The Regional Director of each of the revenue regions shall initiate through an appropriate Revenue Regional Memorandum Order, the campaign within his jurisdiction and shall be responsible for the overall implementation of the campaign. A copy of such Revenue Regional Memorandum Order shall be furnished the Commissioner of Internal Revenue. 2. Creation of Regional Evaluation Committee . In every region there is hereby created a Regional Evaluation Committee, composed of the following: Assistant Regional Director Chairman Chief, Legal Branch Member Chief, Assessment Branch Member a. Functions . The Regional Evaluation Committee shall have the following functions: 1) Assist the Regional Director in the planning, supervision and implementation of the campaign; 2) Evaluate denunciations made by informers against taxpayers and recommend to the Regional Director the appropriate action to be taken thereon; 3) Evaluate reports of apprehension and recommend to the Regional Director whether to prosecute the violator or to accept a compromise offer in extra-judicial settlement of the first offense. 4) Evaluate periodic reports on the progress of the campaign and recommend to the Regional Director appropriate measures to improve the procedures, methods and techniques of the campaign; and 5) Perform such other related functions as may be assigned by the Regional Director. 3. Assignment of Fieldmen in the Regional and District Offices . a. The services of all field examiners and Group Supervisors may be utilized in the surveillance and apprehension campaign, which assignment shall be in addition to their regular investigation work. b. Fieldmen may be required to work even during Saturdays, Sundays and Holidays, as the exigencies of the service may require. c. Assignments shall be on a rotation basis not to exceed 5 days tour of duty per assignment in specific places or areas. 4. The campaign at the regional level under the supervision and control of the Regional Director shall be without prejudice to any direct action which may be taken by the Commissioner or his duly authorized representatives. 5. Procedures of Implementation . a. Tour of Duty for Surveillance and Apprehension : 1) Issuance of " Mission Orders " a) All surveillance and apprehension work shall be in compliance with a "Mission Order" duly signed by the authorized revenue official, consecutively numbered and for a duration of not more than five days, addressed to the examiners assigned and specifying the places or areas covered. b) The surveillance work to be performed under this Revenue Memorandum Order shall be limited to detection and discovery of violations of the laws and regulations on printing and issuance of sales receipts or invoices and not the kind of surveillance provided for under Section 16 of the Tax Code, as amended by P.D. 1356. c) The Mission Order shall be prepared in quadruplicate to be distributed as follows: 1) Original to the Examiner 2) Duplicate to the Regional Director 3) Triplicate to the Revenue District Officer 4) Quadruplicate to the Group Supervisor, if any. Supervisor, if any. d) In Revenue Regions No. 4-A, Manila and 4-B, Quezon City (except Romblon, Palawan and Cavite), and in other regions where the Office of the Revenue District Officer is located in the same city where the Regional Office is situated, the Regional Director shall be the official authorized to issue Mission Orders. In other Revenue Districts including Romblon, Palawan and Cavite, the Revenue District Officer shall be the official authorized to issue Mission Orders to fieldmen and Group Supervisors under his jurisdiction. e) The members of the surveillance and apprehension Team or Group whose services will be utilized for a particular mission shall be notified of their mission one (1) day in advance without disclosing the places or area covered. They shall be briefed shortly before they are sent off on their assignments. b. Execution of Mission Orders . 1) Before leaving for their respective assignments, the members of the apprehension Team or Group shall be issued by the official authorized to issue the Mission Orders BIR Form No. 19.14 (Apprehension Receipt), which shall be the only form to be used by the apprehending BIR officers. The requisitioning, issuance, custody and control of BIR Form 19.14 is the responsibility of the official authorized to issue the Mission Order. They should also be provided with blank affidavit forms (Annex "A") which shall be accomplished in quadruplicate. The affidavit of the person who was not issued a receipt or invoice at the time of the transaction for the purchase of goods or services or payment for rentals, fees, commissions, etc. shall be obtained by the apprehending officer. The same shall be subscribed and sworn to before the apprehending revenue officer, and attested to by at least two (2) witnesses. 2) Documents, invoice booklets, receipts, etc., seized during the apprehension shall be fully described and duly receipted under BIR Form No. 19.14. 3) Every apprehension shall be legibly annotated at the back of the taxpayer's BIR registration certificate of business name or style in the case of a taxpayer who is required to register his name or style; or in the case of one who is not required, on the first page of his registered books of accounts, indicating the nature, date and frequency or the number of violations. The notation shall be dated and signed over the printed name of the apprehending officer. The notation shall be as shown below: Violation: __________________________ BIR Form No. 19.14 Receipt No. _______ This Violation ______ Date ____________ (No.) Name and signature of the Apprehending Officer ___________________________ (Printed Name) 4) Within twenty-four (24) hours after the apprehension, a report thereon shall be accomplished in quadruplicate on the prescribed form (Annex "B") and submitted to the official who issued the Mission Order. Where the issuing official is the Revenue District Officer, he shall forward the report to the Regional Director within 24 hours after receipt of the same. In case the Issuing Official is the Regional Director, he shall furnish the Revenue District Officer having jurisdiction over the taxpayer with a copy of the report. 5) On the day following the termination of the assignment all the BIR Form No. 19.14 (Apprehension Slip) shall be surrendered to the issuing officer. 6) Power of the Commissioner to Compromise ; Delegation to the Regional Directors . Pursuant to Sec. 2 of Revenue Regulations No. 16-78, the Commissioner may compromise a first violation, other than one involving fraud, before the case is filed in court. Where the case involving the first violation is already filed in the Fiscal's Office for preliminary investigation the same may be compromised by the Commissioner upon prior consultation with the Fiscal. a) Offer of Compromise . Whenever the violator offers to pay a compromise penalty on his first violation, he should be informed of the revised schedule of compromise and be required to accomplish, in quadruplicate, a delinquency form (Annex "C"), otherwise, the offer of compromise shall be rejected. b) Delegation of Authority to Compromise in Certain Cases . Subject to the provisions of Sec. 295 the Tax Code and Sec. 2, Revenue Regulations No. 16-78, the authority of the Commissioner to make compromises is hereby delegated to the Regional Director on violations constituting a first offense in the following cases: (1) Failure or refusal to issue receipts or sales or commercial invoices (Sec. 3(a), RR-16-78); and (2) Issuance of receipts that do not truly reflect and/or contain all the information required to be shown therein (Sec. 3(b), RR 16-78). In any case the offer of compromise must originate from the offender and the amount of compromise penalty shall be in accordance with the schedule of compromise herein prescribed. The offer of compromise shall be endorsed by the Revenue District Officer to the Regional Director thru the Regional Evaluation Committee, enclosing the entire docket of the case, stating his recommendations thereon and with a certification that the case being offered to be compromised is in fact a first offense. Upon favorable recommendation by the Regional Evaluation Committee, the Regional Director may settle such case extra-judicially by the acceptance of the offer of compromise. Payment of the compromise penalty by the taxpayer shall be accepted only after the Regional Director has formally accepted the offer of compromise. Should the Regional Director reject the offer of compromise, he shall make a statement of the reasons for his objection and the case shall be treated as a case for prosecution in accordance with existing regulations. c) The first offense in the following cases, other than one involving fraud, may be compromised only by the Commissioner: 1) Possession or use of unregistered receipts or invoices; 2) Possession or use of multiple or double receipts or invoices; 3) Printing, causing, aiding or abetting in the printing of a) Receipts or invoices without authority from the BIR; b) Double or multiple sets of receipts or invoices; c) Unnumbered receipts or invoices; d) Receipts or invoices not bearing the name, business style, taxpayer account number and business address of the person or entity to use the same; e) Receipts or invoices not bearing the name, address, date and number of authority of the printer. 4) Failure of the printer to submit the required quarterly report under Sec. 216-A of the Ta x Co de. The entire docket of the apprehension case involving any of the violations enumerated above, including the offer of compromise in the required delinquency form and all the evidence gathered, shall be forwarded by the Regional Director to the Office of the Commissioner, for endorsement to the Legal Service in the National Office for appropriate action. (5) Upon acceptance or rejection of the offer of compromise by the Regional Director, a copy of the BIR delinquency form shall immediately be forwarded to the Office of the Commissioner. 6. Revised Schedule of Compromises : The following are the revised schedule of compromises for the first offense penalized under Sec. 220-A of the Tax Code. a) For failure to issue receipts or sales or commercial invoices P200.00 b) For refusal to issue receipts or sales or commercial invoices 300.00 c) For issuance of receipts that do not truly reflect and/or contain all the information required to be shown therein 100.00 If the information missing is the correct amount of the transaction 200.00 d) For possession or use of unregistered receipts or invoices 1,000.00 e) For possession or use of multiple or double receipts or invoices 1,000.00 f) For printing or causing, aiding or abetting the printing of: 1) Receipts or invoices without authority from the BIR 1,000.00 2) Double or multiple sets of receipts or invoices 1,000.00 3) Receipts or invoices not bearing any of the following: 1,000.00 a) Consecutive numbers b) The name c) Business style d) Business address of the person or entity to use the same e) Taxpayer Account Number f) The name, address, date, number of authority of the printer and inclusive serial numbers of the batch of receipts printed. g) For failure of the printer to submit the required quarterly report under Sec. 216-A of the T ax Co de P1,000.00 7. Power of the Commissioner to Prosecute ; Delegation to the Regional Directors . The acts or omissions in violation of Sec. 220-A are punishable as criminal offenses. Pursuant to Sec. 15 of the Tax Code, the Commissioner is authorized to make arrests and seizures for violation of any penal law or regulation administered by the Bureau of Internal Revenue. Concomitant with this authority, the Commissioner may bring to court any violator to be prosecuted in accordance with law. a) Delegation of Power to Prosecute Offenses . Subject to the provisions of Sec. 295 of the Tax Code, the power of the Commissioner to file this criminal case and to prosecute the same are hereby delegated to the Regional Director in the following cases: 1) The first offense, as defined in Revenue Regulations No. 16-78, in cases of (a) failure or refusal to issue receipts or sales or commercial invoices (Sec. 3(a), RR 16-78) and/or (b) Issuance of receipts that do not truly reflect and/or contain all the information required to be shown therein (Sec. 3(b), RR 16-78), when a compromise is not effected in accordance with No. 5B(6) of II B of this Memorandum Order; and (2) The second and subsequent offenses mentioned in No. (1), above, of this sub-section. In all other cases where the power to compromise has been retained by the Commissioner, it shall only be the Commissioner who shall file the criminal cases and prosecute the same, unless he specifically authorizes the Regional Director or any internal revenue officer, to act for and in his behalf. 8. Persons Liable ; Penalties . The persons liable and their corresponding penalties are provided for under Sec. 220-A as implemented by Revenue Regulations No. 16-78. The criminal liability of the employer is separate and distinct from the criminal liability of the employee who commits any of the acts or omissions punishable under the law. Thus, the first offense may be compromised not only by the employee but also by the employer. In reporting cases of apprehension, the identities of the employee as well as that of the employer should be established and included in the report. 9. Second and Subsequent Offenses . Pursuant to Sec. 220-A of the Tax Code, the criminal liability arising from the second and subsequent offenses cannot be compromised. Apprehensions for the second and/or subsequent offenses on cases where the power of the Commissioner to compromise and to prosecute has not been delegated shall immediately be endorsed in the same manner prescribed in II B4 of this Revenue Memorandum Order, enclosing all the evidence gathered for the prosecution of the violator in accordance with existing procedures. 10. Monitoring of Offenses/Violations . In order to monitor the number of offenses committed by a particular taxpayer, the Office of the Regional Director, as well as the Office of the Revenue District Officer, shall each maintain a Log Book of Apprehension with cross reference index cards. The name and address of persons or firms apprehended shall be entered in the log book in chronological order indicating the nature of the violation committed, the date of apprehension, number of BIR Form No. 19.14, name of the apprehending officer and the status of the case. III. Report on Apprehensions . The Regional Director shall, within ten (10) days of the succeeding month, submit to the Commissioner of Internal Revenue a summary report of apprehensions made during the preceding month, stating the following in each particular case: a) Name and address of the taxpayer apprehended; b) Nature of the violation; c) Frequency or number apprehended; d) Name of the apprehending officer; e) Status of the case (if settled by compromise, the amount collected). IV. Report on Criminal Cases Filed for Prosecution . The Regional Director shall, within ten (10) days from the filing of the criminal case for prosecution, report to the Commissioner of Internal Revenue such action taken, enclosing therewith a copy of the complaint filed. Thereafter, within ten (10) days of every succeeding month, the Regional Director shall submit a report to the Commissioner of Internal Revenue on the progress of the criminal case(s) filed for prosecution. V. Repealing Clause . All regulations, rules, orders or portion thereof contrary to or inconsistent with the provisions of these orders are hereby modified and/or repealed accordingly. VI. Effectivity . This Revenue Memorandum Order shall take effect immediately. cd t EFREN I. PLANA Acting Commissioner ANNEX "A" Republic of the Philippines ) ) S.S ____________________ ) AFFIDAVIT I, ______________________________, of legal age, _______________ and residing at ____________________________________ after having been duly-sworn (Citizenship) in accordance with law, hereby voluntarily depose and say: 1. That on or about ____________ on ___________________ 19__, I paid (Time) (Date) the amount of ___________ (P_______) in payment for _________________________ (description of transaction) ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ 2. That the payment was received by _______________________________ ____________________________________________________________________ (Name of payee, owner/seller/cashier) 3. That I was not issued any receipt to acknowledge such payment. 4. That this affidavit is being executed of my own free will and without anticipating any reward or consideration whatever. AFFIANT FURTHER SAYETH NAUGHT. ___________________________ Affiant TAN _______________________ SUBSCRIBED AND SWORN TO before me this ________________ of _________________, 19____, in ________________________, affiant exhibiting his/her Residence Certificate No. _______________, issued at ________________ on ______________ 19___. ___________________________ Internal Revenue Officer WITNESSES _______________________ _______________________ ANNEX "B" Republika ng Pilipinas Kagawaran ng Pananalapi KAWANIHAN NG RENTAS INTERNAS Revenue Region No. ____ Revenue District No. ____ ________________________________ APPREHENSION REPORT __________ 1. Violators subject of the report: Employee Employer/Manager/President a) Name __________________________ ____________________________ b) Taxpayer Account No. _____________ ____________________________ c) Business Address _________________ ____________________________ _______________________________ ____________________________ d) Residence _______________________ ____________________________ _______________________________ ____________________________ 2. Date of Apprehension ______________ Apprehension Slip No. _______ 3. Evidence attached to the report ________________________________ ___________________________________________________________________ (Attach duly accomplished Affidavit of Customer, whenever possible) 4. Brief statement of the nature of violation and circumstances of apprehensions: 5. Recommendation: [ ] For compromise (verification should be made if the violation is a first offense) ___________________________________ ______________________________________________ [ ] For prosecution (state reasons) ______________________ ______________________________________________ [ ] For fraud Investigation (state reasons) _________________ ___________________________ Name of Apprehending BIR Offices Designation __________________ 6. Recommendation: _________________________________________ _______________________________________________________ ________________________________ Chairman, Regional Evaluation Committee 7. Action taken by the Regional Director: __________________________ Regional Director ANNEX "C" BIR DELINQUENCY FORM I, ____________________________ of legal age and a resident of _________________________________________________ do hereby offer to settle by compromise the penal liability for my first offense arising from ____________________________________________________________________ (nature of violation) which is punishable under Section ______ of the National Internal Revenue Code by paying the compromise penalty provided for in Revenue Memorandum Order No. ____. I am aware that a repetition of this offense or a similar violation of the Tax Co de will no longer be a subject of compromise pursuant to Section 220-A of the Tax Co de. ___________________ 19___ ________________________. ___________________________ Name & Signature of Taxpayer TAN ______________________ Recommendations: _________________________ ___________________________ _________________________ ___________________________ Apprehending Officer Chairman, Regional Evaluation Committee Accepted/NOT Accepted For the Commissioner of Internal Revenue ____________________________ Regional Director