Revised Procedures in the Processing of Business Tax Returns

May 22, 1985 REVENUE MEMORANDUM ORDER NO. 16-85 SUBJECT : Revised Procedures in the Processing of Business Tax Returns TO : Service Chiefs of Sector Operations Office and National Assessment Office, Regional Directors, Division Chiefs, Revenue District Officers, Chiefs of Assessment Branches, Collection Agents and Others Concerned SCOPE AND PURPOSE These procedures shall govern the processing, disposition and control of business tax returns (BTRs) and define the authority, responsibility and accountability of the various offices involved. casia 1. PROCESSING OF BUSINESS TAX RETURNS (BTRs) 1.1. Definition The term "business tax return" shall refer to all returns for fixed and percentage taxes, gross receipts of banks and other financial institutions, amusement tax, insurance premium tax, foreign exchange transaction tax, mining tax, franchise tax and other gross receipts taxes. 1.2 Procedures 1.2.1 Collection Agent/Authorized Municipal Treasurer 1. Ascertains the completeness and consistency of all three copies of the return, paying particular attention to: a. name, address and tax account number (TAN) of taxpayer; and b. signature of taxpayer or authorized agent. 2. Issues BIR Form 25.24 (RORs) in accordance with Revenue Regulations No. 5-84 dated May 29, 1984 in places where payment through banks is not feasible. 3. Prepares the payment order (PO) for cash/check payment in accordance with Revenue Regulations No. 5-84 dated May 29, 1984. 4. Posts the PO number, date and amount on the original and duplicate copies of the return. cd i 5. Stamps "Received" and initials all three copies of the return. 6. Gives back the 3rd copy of the return together with the first four copies of the PO to the taxpayer and directs him to present the POs to the authorized agent bank. 7. Forwards 5th copy (card copy) of PO to Reconciliation Unit of RDO. 8. Updates master file of taxpayers with data showed on the returns. 9. Forwards under separate transmittal list to Assessment Branch, the original and duplicate copies of BTRs within 10 working days from the last day of filing as follows: a. With cash/check payment (the duly accomplished BIR Form 809 shall serve as the transmittal list); b. Taxable returns with no payment; c. Paid with Revenue Official Receipt (ROR); d. Paid with Tax Credit Memo (TCM)/Tax Credit Certificate (TCC); and e. Exempt returns. 10. Submits monthly reports to the RDO on the amount collected by type of tax as required by Revenue Memorandum Order No. 32-84, and on the total number of returns filed. 1.2.2 Revenue District Officer 1. Supervises and coordinates the activities prescribed for Collection Agents. Insures the timely transmittal of documents to offices concerned. 2. Reports monthly to the Regional Director the amount of collection by type of tax, as required in Revenue Memorandum Order No. 32-84, and the number of filers. 3. Returns to the Assessment Branch one year after receipt, duplicate copies of BTRs that need no investigation. 1.2.3 Assessment Branch 1. Receives batches of returns from Collection Agent. 2. Transmits original and duplicate of out-of-region returns to proper regions. 3. Segregates the BTRs by RDO 4. Sorts returns according to type (BIR Form 25.28, 25.29, etc.). 5. Assigns document locator number (assessment number) which shall be written or stamped on the appropriate box at the upper right hand corner of both the original and duplicate copies of the return. cdt The document locator number (DLN) shall be structured as follows: (A) (B) (C) (D) (E) xxx - x - xxxxx - xx - x Where "A" refers to the revenue district office which has jurisdiction over the return. "B" refers to the classification of business tax F for fixed tax T for foreign exchange transaction tax P for all other business taxes "C" serial number which shall start with 00001 for each quarter of the taxable year per classification in every RDO. "D" year of return "E" quarter covered when applicable. Thus, a "P" return filed for the first quarter of 1985 by a taxpayer in Tondo, Manila (assuming that this is the first return to be numbered) shall have this number: 22-P-00001-85-1 A privilege (fixed) tax return filed for the year 1985 in Cebu City (again assuming that this is the first return to be numbered) shall have this number: 60-F-00001-85 The first Foreign Exchange Transaction Tax Return filed in Makati (East) shall have this number: 32A-T-00001-85 It will be noted that "E" is left blank for fixed taxes and Foreign Exchange Transaction Tax as the former are filed annually while the latter is filed weekly and the quarter, therefore, does not apply. 6. Request immediately confirmation of payment by TCM/TCC from Receivable Accounts Division. 7. Prepares Demand Letters in triplicate for unpaid BTRs or BTRs paid with TCM/TCC which have not been validated by the Receivable Accounts Division. Original mail to taxpayer Duplicate to Collection Branch Triplicate file in alphabetic sequence 8. Segregates originals and duplicates while maintaining the grouping of the returns in activity No. 4. aisa dc 9. Bundles the originals in batches of 100 so that each batch shall contain returns sequentially numbered and in multiples of one hundred (serial ends in 001-100) except the last batch which may be less than 100. 10. Prepares block control sheet duplicate (Annex A), the original to serve as covering transmittal list to the batch of returns. Files duplicate of block control sheet in DLN sequence. 11. Records transmittals (inclusive DLNs and date transmitted) in transmittal record book. 12. Forwards within 15 working days after receipt, batches of original returns together with block control sheets to Revenue Computer Center. 13. Classifies and transmits duplicate returns within 20 working days after receipt to the following: a. Sector Operations Office b. Revenue District Office c. Office Audit 14. Prepares in triplicate transmittal lists of duplicate returns for signature of Regional Director. Original to accompany every transmittal of returns Duplicate Regional Director Triplicate File Copy 1.2.4 Revenue Computer Center (RCC) 1. Prepares in duplicate quarterly regional alphabetic listing of the original returns received from the Assessment Branch. Listing will have the following information: Taxpayer's TAN, name and address, DLN, and total number of taxpayers. 2. Forwards within 60 working days after receipt, processed returns with original of listing to Administrative Branch of corresponding region through the Regional Director. 3. Sends duplicate copy of listing to Assessment Branch. 4. Prepares regional alphabetic listing with TAN, name and address of non-filers based on cross-matches of filers against existing master file of businesses, semestrally. The list shall be in duplicate, the disposition of which shall be as follows: a. National Assessment Office b. Regional Directors 5. Prepares alphabetic list of tax filers with TAN, name, gross receipts and tax due by line of business, annually. The list shall be in duplicate, the disposition of which shall be as follows: aisa dc a. National Assessment Office b. Sector Operations Office 1.2.5 Administrative Branch 1. Files original copies of the returns received from RCC. 2. Maintains the quarterly alpha list of BTR filers. 1.2.6 NATIONAL ASSESSMENT OFFICE/SECTOR OPERATIONS OFFICE Cross checks the various reports received from RCC, Assessment Branches and Revenue District Offices for post audit and inventory of cases in all levels, annually. 2. REPEALING CLAUSE All other orders, circulars and issuances or portions thereof relative to the processing of BTRs, which are inconsistent with this Revenue Memorandum Order, are hereby revoked or amended accordingly. 3. EFFECTIVITY The provisions of this Revenue Memorandum Order shall take effect beginning with business tax returns filed for the first calendar or fiscal quarter of 1985. (SGD.) RUBEN B. ANCHETA Acting Commissioner