Imposition of Surcharge and Interest on the Upward Adjustment of a Self-Assessed Tax Resulting from an Amendment of an Internal Revenue Tax Return

June 8, 1988 REVENUE MEMORANDUM ORDER NO. 18-88 SUBJECT : Imposition of Surcharge and Interest on the Upward Adjustment of a Self-Assessed Tax Resulting from an Amendment of an Internal Revenue Tax Return TO : All Internal Revenue Officers and Others Concerned Pursuant to Section 16(a) of the Tax Code, any return filed by any person in any revenue office authorized to receive the same shall not be withdrawn: Provided , however, that the same may be modified or changed by filing another amended return. On the other hand, Section 248(a)(3) of the Tax Code imposes a 25% surcharge for failure to pay the tax within the time prescribed for its payment. Accordingly, this Order sets forth guidelines on the treatment of the resulting difference in tax payable brought about by the amendment of the internal revenue tax return. I. Amendment of tax return . An internal revenue tax return, e.g., income tax, transfer tax, value-added tax and other self-assessed taxes filed on or before the prescribed date for its filing may be amended or modified upon the request of the taxpayer by filing an amended or modified return and attaching thereto a copy of the original return proposed to be amended. cd II. Payment of 25% surcharge on the additional or balance of the adjusted internal revenue tax payable . If the amended or modified return is filed after the prescribed date for filing and amendment or modification will result in the upward adjustment of the internal revenue tax payable, the balance thereof, after deducting the tax paid in the original return, shall be treated as a tax not paid on time, hence, subject to the 25% surcharge pursuant to Section 248(a)(3) of the Tax Code. III. Payment of interest . There shall be assessed and collected on the additional or balance of the adjusted tax, interest at the rate of twenty percent (20%) per annum to be computed from the date prescribed for its payment which is the last day for the filing of the original return until said balance of the tax is fully paid. [Sec. 249(a), Tax Code] casia This Order shall take effect immediately. (SGD.) BIENVENIDO A. TAN, JR. BIR Commissioner