Guidelines in the Filing of Confidential Information For Violations of the National Internal Revenue Code (NIRC) and Investigation By Authorized Revenue Officer

February 1, 1993 REVENUE MEMORANDUM ORDER NO. 12-93 SUBJECT : Guidelines in the Filing of Confidential Information For Violations of the National Internal Revenue Code (NIRC) and Investigation By Authorized Revenue Officer TO : All Internal Revenue Officers and Others Concerned I. Objectives: A. To provide the guidelines, rules and procedures in the filing of confidential information for violations of the NIRC in relation to Finance Regulations No. 1 implementing Republic Act No. 2339, as amended (now Section 281 of the NIRC); aisa dc B. To facilitate the investigation of persons covered by the information; and C. To delineate the responsibilities of the different offices and units in the BIR involved in the filing, investigation and disposition of confidential information. II. Filing of Information: Pursuant to Section 5 of Finance Regulations No. 1, in relation to Section 281 of the NIRC, duly sworn confidential information on frauds upon or violations of any of the provisions of the NIRC, shall be filed with the Legislative, Ruling and Research Division (LRRD) for scrutiny and verification to determine if the information given is in accordance with the Regulations. The information must be accompanied with a sworn statement and the informer shall appear in person and execute under oath the statement, specifying the particular violation by the denounced person and the kind of tax or taxes allegedly not paid. III. Transmittal of the Information and Documents: Having taken cognizance of the Confidential Information, the same shall be transmitted by the LRRD to the Records Division, BIR, National Office, for numbering and recording in the Confidential Entry Book provided for the purpose. aisa dc The individual entries to be made by the Records Division shall indicate the day and time the information is received, the name and address of the informer, name and address of the person denounced, names and addresses of the witnesses, if any, the subject matter of the information and the list of records, documents and books submitted, if any. The informer shall retain a duly stamped received and initialed copy of his sworn information which shall serve as his identification or evidence that he is the true informer. The Original Copy of the information/sworn statement, together with the documents submitted, if any, shall be returned to the LRRD where it shall be filed and kept strictly confidential. Only the copies thereof shall be referred to the Intelligence and Investigation Office (IIO) or the Special Investigation Branch (SIB) of the Regional Office for investigation and assessment of the tax/taxes. In no case shall an information filed with other units of the Bureau be the subject of an action or investigation without the same having been verified in accordance with Rule II of this Order. IV. Surveillance and Investigation: Information given in accordance with the Regulations shall immediately be the subject of discreet investigation or surveillance. A complete report on the findings thereon, and recommendation shall be submitted to the Commissioner of Internal Revenue or the Regional Director by the investigating units concerned, thru proper channels for approval. V. Kinds of Information entitled to record: In order to entitle an informer to a reward, his information must not yet be in the possession of the Bureau of Internal Revenue nor shall it refer to a case of fraud or violation already pending or previously investigated or examined by the Commissioner of Internal Revenue or any of his deputies, agents or examiners, as the case may be, or by the Secretary of Finance or any of his deputies or agents. (Section 1, Republic Act 2338). In case the information given is not entitled to reward, the informer shall be advised immediately of such fact. VI. Result of the information which deserves reward: In order to entitle an informer to a reward, the information given by him must lead to or be instrumental in the discovery of the fraud upon or violation of any of the provisions of the Internal Revenue Code or special laws being administered by the BIR and results in the actual recovery or collection of revenues, surcharges and fees and/or the conviction of the guilty party and/or the imposition of any fine or penalty or the actual collection of compromise in case of amicable settlement. (Section 1, Republic Act 2338). VII. Basis of Reward to be given the informer: The taxes assessed and paid as a result of the valid information given shall be the basis of the reward of 15% (of the tax, surcharge and fees paid) pursuant to Section 231 of the Tax Code, the claim for which shall be processed by the Legislative, Ruling and Research Division. The Commissioner of Internal Revenue shall recommend the payment of reward to the informer, based on the actual amount collected, subject to approval by the Secretary of Finance. Otherwise, the claim shall be denied. VIII. Taxes assessed pursuant to a valid information given for fraud, clearly established as committed by the denounced person, shall not be the subject of compromise pursuant to Section 204 of the Tax Code, as amended. acd This Revenue Memorandum Order shall take effect immediately. (SGD.) JOSE U. ONG Commissioner of Internal Revenue