Procedure in Processing Tax Returns/Documents on Remittances of Internal Revenue Taxes Through Authorized Agent Banks

April 1, 1970 REVENUE MEMORANDUM ORDER NO. 19-70 SUBJECT : Procedure in Processing Tax Returns/Documents on Remittances of Internal Revenue Taxes Through Authorized Agent Banks TO : All Internal Revenue Officers and all concerned In order to achieve proper, coordinated and effective implementation of Executive Order No. 206 dated January 9, 1970 directing the Central Bank to receive payment of internal revenue taxes through the banking system, there are prescribed hereunder the procedures to be followed: Accountable Forms Division 1. When issuing booklets of Tax Payment Acceptance Orders (TPAO) to Collection Agents, always furnish simultaneously the DPC and Internal Audit Department of the National Office as well as the Assessment Branch of the Regional Office in which the Collection Agent is detailed, a listing of such TPAO's issued, showing the inclusive numbers thereof and date issued. Collection Agent 1. Whenever a tax return, demand letter, assessment notice, or other basic document of taxes enumerated in Executive Order No. 206 is presented for payment, prepare legibly a set of TPAO in quintuplicate in favor of authorized agent bank of the taxpayer's choice. 2. Imprint the stamp of your office on the face of the basic document and annotate thereon the TPAO number, date and amount involved. Precede the number by "TP" to distinguish it from Official Receipt number. If no basic document was presented by the taxpayer, write on the face of TPAO the following: "NO BASIC DOCUMENT PRESENTED". 3. Given the taxpayer his file copy of the basic document as well as the original and quadruplicate copy of TPAO. Retain quintuplicate copy in the booklet. 4. Staple duplicate copy of TPAO to the upper left of the corresponding office copy/s of basic document. Bundle them in batches of 50 (pertaining to a particular booklet), numerical in sequence according to TPAO numbers. Prepare a TPAO/Document Block Control Sheet (Exhibit A attached) in triplicate and indicate after each number (corresponding to TPAO No.) the kind of tax for which the same was issued. Cancelled TPAO's should be so indicated by placing the word "cancelled" after the corresponding number on the block control sheet. Attach to the bundle the original and duplicate copies of the block control sheet and retain in your files the triplicate copy. Transmit the bundles daily to the Assessment Branch of the region having jurisdiction over you. cd Basic documents of issued TPAO's the corresponding booklet of which has not been fully issued in a week's time should be bundled, block controlled and transmitted to the Assessment Branch. the unissued TPAO's should be so indicated on the block control sheet. However, if the collection agent or any deputized personnel is based in the premises of the authorized agent banks he shall transmit the basic documents to the Assessment Branch daily. 5. A report on all TPAO's issued during the day, in the form prescribed in Exhibit B attached, shall be prepared and the same, together with triplicate copies of such issued TPAO's shall be hand-carried and submitted to the Office of the Commissioner not later than 12:00 noon of the next succeeding working day. 6. When quarterly withholding tax returns (BIR Form W-1) presented for payment covers a bigger amount than the remittance to be made, this will normally mean that monthly payments were made. In cases like this, request for official receipts of such monthly payments made, annotate the pertinent data at the reverse side of the Form W-1 and sign it. Return official receipts to the taxpayer. Assessment Branch 1. Check completeness of TPAO copies as well as accompanying documents which may be a tax return, demand letter or assessment notice. Check also correctness of annotations on basic documents. The taxpayer account number should be indicated on all basic documents and TPAOs. Detach TPAO's from basic documents and transmit immediately to the Date Processing Center covered by the duplicate copy of the TPAO/Document Block Control sheet. 2. Retain and maintain a complete file of original copies of TPAO/Document Block Control sheets. 3. Segregate basic documents according to kind of tax and process them in accordance with existing procedures. For the purpose of sending reminders for 2nd installment payments, the amounts covered by TPAO's as annotated on basic documents shall be tentatively considered payments for the 1st installment. 4. All withholding tax returns shall be transmitted immediately for processing to the Withholding Tax Division, National Office. 5. Keep a control register of TPAO's issued to Collection Agents in the region using as basis the listings furnished by the Accountable Forms Division, and periodically post issued numbers as reflected in TPAO/Document Block Control sheets. 6. Any discrepancy detected in paragraphs (1) and (5) hereof shall immediately be resolved. Those that cannot be resolved in the region should be forwarded to the Office of the Commissioner. Office of the Commissioner 1. Deliver daily to the authorized employee of the Central Bank all triplicate copies of TPAO's issued and submitted by Collection Agents on the same day. 2. Receive daily from the Central Bank (a) daily summary of collections and (b) duplicate copies of official receipts issued. 3. Distribute the documents in No. 2 hereof as follows: (a) daily summary of collections to the Chief, Accounting Division who shall be the custodian thereof. (b) duplicate copies of official receipts to Data Processing Center, furnishing as well, the totals thereof per daily summary of collections. 4. Initiate investigation of (a) discrepancies detected by Data Processing Center in matching payment data gathered from duplicate copies of official receipts against those extracted from TPAO's; (b) discrepancies detected by the Chief, Accounting Division in matching monthly totals of daily summary of collections of authorized agent banks against the monthly summary of collections prepared by Data Processing Center, and (c) unresolved discrepancies forwarded by regional offices. Withholding Tax Division 1. Quarterly withholding tax returns (BIR Form W-1) shall be pre-audited to determine, among other things: a. no payment returns b. late payments c. underpayments d. no monthly breakdown e. unregistered or new employers f. changes in name/address g. final returns h. perfect returns 2. Post the perfect returns in the master list. 3. Take appropriate action on imperfect returns and post them also in the master list with proper annotation of action taken. Action on imperfect returns shall be continuing until the imperfections have been perfected. 4. Forward to Data Processing Center in batches of 100 covered by a block control sheet (Exhibit C attached) Data Processing Center 1. Process TPAO's by extracting all pertinent data shown thereon. 2. From the duplicate copies of official receipts issued by authorized agent banks, pertinent data shall be extracted. 3. Data in no. 2 hereof, more particularly TPAO no. and amount shall be matched against those in no. 1 hereof for the purpose of detecting discrepancies or anomalies. Any discrepancy that cannot be resolved shall be reported immediately to the Office of the Commissioner for appropriate action. 4. A monthly summary of collections by kind of tax and agent banks shall be prepared out of data extracted in no. 2 hereof and furnished the Chief, Accounting Division. 5. In processing quarterly withholding tax returns (BIR Form W-1) monthly payments indicated on the reverse side of the form shall likewise be verified as to correctness. Accounting Division 1. Reconcile monthly totals of daily summary of collections as reported by agent banks against the total of monthly summary of collections prepared by Data Processing Center. 2. Utilize the monthly summary of collections by kind of tax and agent banks furnished by Data Processing Center as source of accounting entries. Strict compliance with this Order is hereby enjoined. MISAEL P. VERA Commissioner of Internal Revenue "EXHIBIT A" TAX PAYMENT ACCEPTANCE ORDER & DOCUMENT BLOCK CONTROL SHEET TPAO Number Kind of Tax TPAO Number Kind of Tax 1. _____________ ____________ 26._____________ ____________ 2. _____________ ____________ 27._____________ ____________ 3. _____________ ____________ 28._____________ ____________ 4. _____________ ____________ 29._____________ ____________ 5. _____________ ____________ 30._____________ ____________ 6. _____________ ____________ 31._____________ ____________ 7. _____________ ____________ 32._____________ ____________ 8. _____________ ____________ 33._____________ ____________ 9. _____________ ____________ 34._____________ ____________ 10. _____________ ____________ 35._____________ ____________ 11. _____________ ____________ 36._____________ ____________ 12. _____________ ____________ 37._____________ ____________ 13. _____________ ____________ 38._____________ ____________ 14. _____________ ____________ 39._____________ ____________ 15. _____________ ____________ 40._____________ ____________ 16. _____________ ____________ 41._____________ ____________ 17. _____________ ____________ 42._____________ ____________ 18. _____________ ____________ 43._____________ ____________ 19. _____________ ____________ 44._____________ ____________ 20. _____________ ____________ 45._____________ ____________ 21. _____________ ____________ 46._____________ ____________ 22. _____________ ____________ 47._____________ ____________ 23. _____________ ____________ 48._____________ ____________ 24. _____________ ____________ 49._____________ ____________ 25. _____________ ____________ 50._____________ ____________ CERTIFIED CORRECT: _______________________ Signature of Collection Agent __________________________ Printed Name of Collection Agent Received by: ______________ ______________________ Receiving Officer City/Municipality "EXHIBIT B" _______________ The Commissioner Bureau of Internal Revenue Manila Sir: Enclosed herewith are the triplicate copies of Tax Payment Acceptance Orders issued/cancelled by the undersigned on _______________, 19___, bearing inclusive serial numbers as follows: Issued Cancelled _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ Very truly yours, ______________________ Signature of Collection Agent __________________________ Printed Name of Collection Agent _______________________ City/Municipality