Tax Returns Compliance Program — Phase I (For the Period from March 8, 1967 to August 4, 1967)

March 1, 1967 REVENUE MEMORANDUM ORDER NO. 09-67 SUBJECT : Tax Returns Compliance Program Phase I (For the Period from March 8, 1967 to August 4, 1967) TO : All Revenue Directors, Revenue District Officers and Others Concerned 1. In line with the tax improvement program of this administration for the ultimate purpose of increasing revenue collections as well as the tax consciousness of the public, there is hereby prescribed a year-long campaign heretofore referred to as the "Tax Returns Compliance Program" on a nation-wide scope to ferret out persons who have failed to file their income tax returns for the past five (5) years and bring them, through legal persuasion if necessary, into the rolls of income tax filers. The objectives sought to be accomplished in this program are as follows: a. To foster the highest possible degree of voluntary compliance b. To raise the level of tax consciousness of the people in order to make it easier for them to comply with their tax obligations through a systematic tax information-education campaign. c. To secure data from this project in developing an effective means to close the tax gap. 2. All Revenue Directors throughout the country shall be responsible for the proper and successful implementation of this campaign in their respective regions and are given the discretion to utilize personnel available in their respective regions along the same organizational and functional lines as presently constituted in order to attain satisfactory results. 3. The main objective of this campaign is to gather data from all available sources and determine therefrom those who are liable to file income tax returns but have failed to do so. 4. The minimum goal of data to be gathered for each revenue district is enclosed. cdta 5. The time table for Phase I of the "Tax Returns Compliance Program" is as follows: PHASE I Assignment Period Target Data No. of Unit Working Days Involved Preparation of Master March 1 to May 15 51 Data Processing List of 1965 Income Center National Tax Filers Office Gathering Data March 8 to May 26 53 Revenue District Offices 1st Purging of Lists May 29 to June 16 14 Revenue District Offices 2nd Purging of Lists June 19 to June 30 10 Regional Offices Final Purging of Lists July 3 to July 28 19 Data Processing Center National Office Screening of Final Aug. 1 to Aug. 4 4 National Tax Fraud Lists Enforcement Group National Office For a full and clearer understanding of the above time table and in order not to disrupt the smooth flow of the campaign, Revenue Regional Directors as regional coordinators and Revenue District Officers as district coordinators shall regularly refer to the Chart of Operations and are hereby instructed to follow closely the target date for each step in the campaign. 6. Procedure for listing non-filers. The procedure in identifying non-filers, should be in accordance with the following guidelines. The Regional Director is given the discretion to add any procedure herein which he believes will lead to the facility and wide coverage of data gathering. a. Secure BIR master list of income tax return filers for the current year. A master list of income tax return filers for every revenue district throughout the country shall be prepared by Data Processing Center. This master list shall serve as the principal reference in identifying non-filers. Any person, association, partnership or corporation not appearing in the master list shall be considered, prima facie, a non-filer. b. Secure lists from outside sources. Every Revenue District Officer shall secure the following lists from the offices concerned within their respective revenue districts. Where any or all these lists have been previously secured, it is necessary that they should be brought up-to-date. (1) Owners of motor vehicles a list of all registered owners of motor vehicles in the district office of the Land Transportation Commission indicating the type, make, cost and date of acquisition, and the name of seller. (TRCP Form A) (2) Real property owners a list of owners of real property under the following categories: (TRCP Form B) (a) Owners of residential lots having an assessed value of P1,000.00 or more. (b) Owners of buildings having an assessed value of P1,500.00 or more. (c) Owners of agricultural lands having an area of 5 hectares or more. (d) Owners of land devoted to commercial vegetable production irrespective of area. (e) Owners of subdivisions. Indicate the area and location of the property. LLjur (3) Stall holders and market vendors a list of selected stall holders and market vendors in selected public markets indicating the kind of merchandise or products sold. (TRCP Form C) (4) Professors and teachers a list of professors and teachers employed as such in public schools and colleges who earned P1,800.00 or more during the year 1965. Schools and colleges who have been complying with the Withholding Tax Law and Regulations need not be included in the canvass. (TRCP Form D) (5) Hostesses, Dancers, Musicians, Other Night Club Employees a list of hostesses and other employees working in Day and Night clubs. (TRCP Form E) (6) Bus, Jeepney and Taxi Drivers a list of all drivers whose earnings reached P1,800.00 or more in 1965 (TRCP Form F) c. Prepare Consolidated List of Potential Non-Filers. The Revenue District Officer shall consolidate the different lists prepared by his revenue examiners i.e. a person appearing in any or all the different lists submitted shall be considered as one in the consolidated list. TRCP Form G should be used in preparing the consolidated list of potential non-filers. LexLib d. Purging the Lists of Potential Non-Filers: To remove those appearing to have filed their income tax returns in the Master Lists prepared by Data Processing Center. (1) Purging at Revenue District Office Level. The consolidated list (TRCP Form G) should now be matched with the master list prepared by the Data Processing Center crossing out in the consolidated list those appearing in the latter until all the names in the former have been checked. Those not crossed out in the consolidated list (TRCP Form G) are the non-filers in so far as the Revenue District is concerned. The list is then forwarded immediately to the Regional Office. (2) Purging at Revenue Regional Level Upon receipt of the consolidated lists (TRCP Form G) from their respective Revenue District Officers, Regional Directors shall match them with their master lists furnished by the Data Processing Center, following the same procedure used in d(1) above. The purpose is to strike out from the lists those who filed in revenue district offices other than the district offices of origin within the jurisdiction of the revenue region. The matching should be done until the names appearing in the Regional Master List of Income Tax Return filers have all been checked. The lists are then forwarded to the National Office, care of Data Processing Center. (3) Purging at National Level by Data Processing Center. Upon receipt of the purged potential non-filers lists from the different revenue regional directors, the Data Processing Center shall now match them with the master list of all Income Tax Return filers throughout the country, striking out from the latter those appearing in the former. After the last name in the former has been checked the names not crossed out in the latter are presumed to be "Non-Filers". A master list of these non-filers by revenue districts is then prepared by Data Processing Center. These master lists are then sent to the Special Operations Department for screening, checking out from the list, persons who should not be included in the field contact because of action taken or being contemplated by any of the divisions under the department. After the screening the "Final" lists of non-filers are then sent to their respective revenue regional offices, where in turn they shall be sorted and forwarded to their respective revenue district offices. 7. Management of Phase I of the Program Responsibility for the proper and satisfactory completion of Phase I of the Program shall be with the Revenue Operations Head, Assessment. However, in order to accomplish the task, it is necessary to delegate authorities and responsibilities at all levels for proper coordination and quick action and these are the following: a. National Coordinating Team This group shall see to it that the program is properly conducted throughout the country in accordance with instructions laid down by the National Office and that the work is progressing satisfactorily and in accordance with schedule. b. Regional Coordinator The Revenue Regional Director shall be the regional coordinator for his region. He shall acquire sufficient knowledge of the details of the program to enable him to render alert supervision over the work of the different revenue districts under his region. He shall be responsible for the training of personnel in his region who shall have supervisory functions in the program. c. District Coordinator The Revenue District Officer shall be the district coordinator in his district. He is responsible for programming the work of personnel under him and shall see to it that the work in his district is progressing according to schedule. d. Tax Information Officer The Chief of Tax Information Division shall be the Tax Information Officer. He shall take charge of the over-all monitoring of the publicity drive and tax education of the public. This Revenue Memorandum Order shall become effective immediately. The work should be pushed through vigorously and as in the past, the wholehearted cooperation of every employee participating in the program is expected. Phase II of this Program which pertains to the Field Canvass of Non-Filers appearing in the lists in order to secure the returns required to be filed shall be the subject of a subsequent Revenue Memorandum Order. cdpr MISAEL P. VERA Commissioner of Internal Revenue REGION 6, 7, & 8 NATIONAL OFFICE