Accomplishments of the Taxpayer's Statistical Record Form for Every Report of Investigation on Income Tax

June 5, 1981 REVENUE MEMORANDUM ORDER NO. 17-81 SUBJECT : Accomplishments of the Taxpayer's Statistical Record Form for Every Report of Investigation on Income Tax TO : All Internal Revenue Officers and Others Concerned In order to facilitate processing and review of income tax investigation reports and to be able to compile statistical data on the different lines of business for the purpose of using the name as basis for the formulation of audit policy, guidelines and procedures, the attached Taxpayer's Statistical Record form is hereby prescribed to be accomplished by the examiner and attached to every income tax report of investigation of taxpayers engaged in business and all other taxpayers so far as applicable beginning June 15, 1981. A. Procedure The Taxpayer's Statistical Record (BIR FORM 17.17-RS) shall be prepared in duplicate by the examiner investigating any income tax case and shall always be attached on top of every docket. If the taxpayer is a registered enterprise enjoying tax incentives administered by the Board of Investments, the examiner shall, in addition, accomplish BIR Form 17.17-RS-1. The following guidelines shall be followed in the preparation of the Taxpayer's Statistical Record form: 1. Indicate the name, taxpayer account number and address of the taxpayer in the spaces indicated. 2. Be specific with regards to the filling up of blanks for kind of business and the product line. Examples: Kind of Business Product Line Trading (wholesaler) Hardware Trading (retailer) Auto spare parts Mining Gold Manufacturing Textile or shirts or shoes Farming Livestock (pigs) Indicate products carried, manufactured, or produced by the business. Where it is not feasible, to itemize the products as in the case of C-13 taxpayers, it is enough to state the general classification of the products. 3. For the purpose of this Revenue Memorandum Order, the following terms shall connote: cdt a. Sales should be net of sales discount, returns and allowances. b. Gross revenue the gross revenue for taxpayers engaged in the sale of services. c. Gross Profit Sales less cost of sales in the case of those engaged in manufacturing, trading, mining, agriculture or contractors whose contracts include the cost of materials and labor. d. Net Profit Gross profit or gross revenue less deductible operating expenses. e. Net Income Net profit from operation plus other income less other non-operating expenses and income tax due. f. Tax Due The tax due per return is the amount of tax shown in the return as computed by the taxpayer. The tax due per investigation is the amount of tax due per return, shown in the first column, plus the deficiency tax discovered in the investigation but not including the interest and other penalties chargeable to the deficiency tax. g. Deficiency Tax The additional tax due after investigation. h. Average cost per unit is arrived at by dividing the total cost of producing a given number of units of outputs by the quantity or number of units. i. Average labor cost is the sum of direct labor cost involved in production (wages) and other labor related cost such as social security contributions, medical and pension contributions plus other fringe benefits paid by the employer, divided by number of employees. Average Labor Cost = DC + RC N where DC is the direct labor cost (wages) RC is the labor related cost and N is the number of employees j. Capitalization Beginning paid up capital and surplus. Exclude appraisal surplus. acd 4. In the computation of the ratios, the figures should be these as determined after investigation. Indicate only the resulting percentages. 5. If the taxpayer is engaged in multiple lines of industry or business, the required data on (a) Sales, (b) Gross Profit, and (c) Gross Profit ratio shall be accomplished by the examiner for each line of business or industry the taxpayer is engaged in. If there is no segregation of accounts of the different lines of business or industry in the books of accounts, then the business should be taken as a whole for the purpose of requiring data on sales, gross profit, and gross profit ratio. 6. Under remarks, the examiner may state additional information covered during the investigation such as the following: a. Any unique operating financial data which will contribute to a better and expeditious evaluation of the case or to a better appreciation of the amount of tax due. b. Explanation for unusual ratios. c. Explanation as to whether there are extraneous or non-recurring income or expenses. d. Whether tax incentives have been availed of by the taxpayer which would explain the distortion of the ratios of net income and tax due figures. 7. The Group Supervisor, Section Chief, Assistant Revenue District Officer, or Assistant Chief of Division in the investigating divisions in the Central Office shall initial the Taxpayer's Statistical Record before the Revenue District Officer or the Chief of the Division signs the same. The reviewer who passes upon the reports in the Assessment Branch of the Regional Office or his counterpart in the Sector Audit Review Division and National Assessment Review Division in the Central Office, shall sign as the reviewer. 8. After the report is finally approved by the authorized officials, the Commissioner, Deputy Commissioner, or the Revenue Service Chief (Sector Operations Office or National Assessment Office as the case may be in the Central Office and the Regional Director or Assistant Regional Director as the case may be in Regional Offices. The Sector Audit Review Division or National Assessment Review Division in the Central Office or the Assessment Branch in the Regional Office shall detach the original copy of the Taxpayer's Statistical Record. The duplicate shall remain with the docket. 9. The original copy of the Taxpayer's Statistical Record (BIR Form 17.17-RS) previously detached shall be forwarded by the Sector Audit Review Division or National Assessment Review Division in the case of the Central Office and the Assessment Branch in the case of the Regional Office to the Data Processing Center for the annual extraction of statistical data on the different ratios computed by lines of business. The original copies of Form 17.17-RS-1 shall be forwarded by the same offices to the Chief, Investment Incentives Division, Sector Operations Office. acd This Revenue Memorandum Order supersedes Revenue Memorandum Order No. 25-77. The Taxpayer's Statistical Record shall henceforth be accomplished in lieu of the Review Sheet. Strict compliance with the instructions of this Revenue Memorandum Order is hereby enjoined. (SGD.) RUBEN B. ANCHETA Acting Commissioner FORM 17.17-RS (Revised June, 1981) TAXPAYER'S STATISTICAL RECORD Name of Taxpayer __________________________ Line of Business ____________________ Address/Place of Business _____________________ Product Line ______________________ TAN ________________ Ownership (Single Proprietorship/Partnership/Corp.) ____________ DATE Organized _______________________ Incentives (P.D. or R.A.)__________________ ------------------------------------------------------------------------------------------------------------ YEAR COVERED : 19____ : 19____ ------------------------------------------------------------------------------------------------------------ : Per : Per : Per : Per : Return : Inves- : Return : Inves- : : tigation : : tigation ------------------------------------------------------------------------------------------------------------ 1. Gross Sales/Receipts/Revenue : : : : 2. Cost of Sales : : : : 3. Gross Profit Ratio 4. LESS: Total Deduction : : : : 5. Net Income- A) Per Return : : : : B) Per Investigation : : : : 6. Income Tax Due- A) Per Return : : : : B) Per Investigation : : : : C) Deficiency Income Tax : : : : 7. Ratio of Net Income to Gross Sales/Receipts/Revenue : : : : 8. Ratio of Total Deductions to Gross Sales : : : : 9. Selling Expenses- A) Ratio to Sales : : : : B) Ratio to Total Deductions : : : : 10. Manufacturing Cost-A) Raw Materials Ratio to Mfg. Cost : : : : B) Direct Labor Ratio to Mfg. Cost : : : : C) Manufacturing Expenses Ratio to Mfg. Cost : : : : 11. Average Cost per single unit of goods produced : : : : 12. Average Labor Cost : : : : 13. Administrative Expenses-A) Ratio to Sales : : : : B) Ratio to Total Deduction : : : : 14. Financial Expenses-A) Ratio to Sales : : : : B) Ratio to Total Deductions : : : : 15. Total Assets : : : : 16. Total Liabilities : : : : 17. Capitalization : : : : 18. Return on Investment Ratio of Net Income (Item 6.B above) Over Capitalization (Item 13) : : : : 19. Taxes Paid : : : : : : : : : : : : : : : : : : : : 20. Remarks : : : : Reviewed by: Prepared by: ____________________________ ____________________________ Reviewer Revenue Examiner Concurred In: ____________________________ Division Chief/RDO ____________________________________ Chief, Sector Audit Review Division/National Assessment Review Division/Assessment Branch Beginning paid-up Capital and Surplus (exclude appraisal Surplus) Note: If taxpayer enjoys investment incentives, accomplish BIR Form 17.17-SR-1 BIR FORM 17.17 RS-1 June, 1981 TAXPAYER'S STATISTICAL RECORD (To be accomplished if Taxpayer Enjoys Investment Incentives) 1. Name of Registered Enterprise: ___________________________________________ 2. Address: ______________________________________________________________ 3. TAN: _________________________________________________________________ 4. Taxable Year Covered: ___________________________________________________ 5. Registration: ____________________________________________________________ a. Governing Agency: (BOI, PTA, EPZA, MARINA, ETC.) b. Registration No.: ____________________________________________________ c. Date Issued: ________________________________________________________ d. Status: (Pioneer, Non-Pioneer, Export Trader, Export Producer, Service Exporter, etc. e. Registered Product/Activity: ____________________________________________ 6. Incentive Availment/s: (In case of two or more availments, segregate information for each and every availment. Use additional sheet if necessary.) a. Nature: (RIT, Accelerated Depreciation, Loss Carry-Over, etc.) b. Amount Claimed: ____________________________________________________ c. Amount Approved by Government Agency: _______________________________ d. Amount Allowed per Investigation ______________________________________ 7. Sales: _________________________________________________________________ a. Local: _____________________________________________________________ b. Export: ____________________________________________________________ 8. Taxable Income before Incentive Availments: _________________________________ a. Per Return: _________________________________________________________ b. Per Investigation: _____________________________________________________ 9. Remarks: Submitted by: ______________________ Division/Region: _____________________ Date: ______________________________