Enclosure of a Separate Report of Payments Made by Taxpayers

February 17, 1967 REVENUE MEMORANDUM ORDER NO. 08-67 SUBJECT : Enclosure of a Separate Report of Payments Made by Taxpayers TO : All Revenue Directors, Revenue District Officers and Others Concerned It has been observed by this Office that the field audit reports submitted by examiners are not in accordance with the requirements promulgated in the Handbook of Audit Procedures and Techniques and other requirements on the matter with respect to the reporting of tax payments of taxpayers. While certain income tax returns are filed with a certified statement of a Certified Public Accountant which include a schedule of the taxes paid by the taxpayer, there is no statement in the report that such payments have been duly verified. In the case of reports on percentage taxes, the tax payments are sometimes not reported or summarized. In order, therefore, to utilize the field audit reports in the implementation of the accounting system of the Bureau of Internal Revenue with respect to the accounting of receipts of payment of internal revenue taxes, fees, and charges, the following procedure is hereby promulgated for compliance of all concerned: 1. All investigations or inspections made by any fieldman which are covered by the corresponding authority to investigate should be reported by the fieldman concerned within 120 days from the date of authority. 2. In addition to the requirements in the submission of reports as provided for in the "Handbook on Audit Procedures and Techniques," with respect to income taxes and of reports with respect to other taxes as provided in Revenue Memorandum Order No. 17-66, the reporting officer should include in his report a list of tax payments made by the taxpayer investigated covering the period of investigation irrespective of whether or not discrepancies and/or deficiency taxes are discovered. The list should be made in a separate sheet and prepared in triplicate which should contain the following information: Paragraph and Schedule of taxes paid Amount paid Official Receipt Number Date paid Where paid The payments should be in chronological order starting from the earliest date covered by the report up to the latest date. 3. Upon receipt of the report by the Assessment Branch, the original and duplicate copies of the list should be detached while the triplicate should be left with the docket of the case as the file copy of the docket. The original should be forwarded to the Data Processing Center, National Office, while the duplicate should be forwarded to the Collection Branch of the Regional Office. 4. The duplicate copy received by the Collection Branch should be checked with Form 12.31 which is compiled in the said Branch to determine whether the said payments have been correctly reported by the Collection Agent. Where the payments as reported by the examiner are not listed in Form 12.31, it may be presumed that the receipt in the possession of the taxpayer is a fake receipt. In cases where the amounts shown in the report of the examiner is more than that shown in Form 12.31, it may be presumed that the Collection Agent had appropriated for himself the difference. Any such differences should be reported immediately to the Revenue Director so that appropriate action may be taken by the Assessment Branch or the Collection Branch for the collection of the short taxes paid and so that the Legal Branch may institute the necessary court action on the matter. 5. Upon receipt of the original copy of the report by the Data Processing Center, it should be processed and checked with the record of payments in the said office. In case of discovery of any differences between the records of payments in the Data Processing Center, same should be immediately communicated to the Revenue Operations Head (Collection) so that appropriate action can be taken by the said department. The Revenue Operations Head (Collection) shall communicate upon discovery of any anomalies to the Regional Office concerned so as to determine whether or not appropriate action has already been taken up by the Regional Office. 6. The requirements to submit in triplicate a list of tax payments as an enclosure to the field audit report is also required of fieldmen in the National Office conducting investigation and submitting field audit reports. Whether the deficiency taxes are paid or not at the time of reporting, the said requirements should be adhered to. All such dockets whether with or without discrepancy and/or deficiency taxes should be forwarded to the Assessment Department where the original and duplicate of the required list of tax payments will be detached from the docket. The duplicate should be sent to the Regional Office for appropriate action as provided for in sub-paragraph 4. The original should be forwarded to the Data Processing Center for appropriate action in accordance with sub-paragraph 5. Strict compliance with these instructions is hereby enjoined. MISAEL P. VERA Commissioner of Internal Revenue