Control of Collectible Accounts

July 24, 1978 REVENUE MEMORANDUM ORDER NO. 19-78 SUBJECT : Control of Collectible Accounts TO : All Internal Revenue Officials and Employees Concerned In order to implement the recommendations agreed upon in the recent conference of Chiefs of Collection Branches, Regional Directors and other BIR officials which was held for the purpose of updating collectible accounts by December 31, 1978, the policies, guidelines and procedures on the control of collectible accounts enumerated hereunder are hereby prescribed for the guidance and compliance of all concerned. A. Collectible accounts arising from nonpayment of deficiency taxes listed in the "Monthly Collection of Taxes Assessed and/or Demanded" (Form 40.00) shall be listed separately from collectible accounts arising from nonpayment of taxes due per the returns filed by taxpayers (ITR Accounts). cdt B. Separate general control ledgers shall also be maintained for these separate listings. The control ledgers for district accounts shall be kept at the Revenue District Office; those for regional accounts at the Collection Branch; and those for the national accounts at the Receivable Accounts Division. In addition, the Collection Branches shall also maintain control ledgers for all the RDOs within the jurisdiction of the revenue region and for national accounts assigned for collection in the Regional Offices, while the Receivable Accounts Division shall also maintain a control ledger for the combined regional and national offices accounts. C. The RSC (Collection) and all Revenue Directors shall utilize all the necessary personnel within his jurisdiction in order to meet the target dates for the updating of the collectible accounts. Revenue Examiners shall be rated on their performance on collection activities strictly in accordance with RMO 46-76. D. Dockets of collectible accounts except those that have been protested by the taxpayers shall be kept in the office having jurisdiction over the collection of the account until the account is closed or settled. Cases closed through payment or through means other than payment shall be forwarded to the Administrative Branch of the region or to the Records Division in the National Office, as the case may be, for filing. E. The following procedures shall be followed in updating the collectible accounts in order to arrive at a clean list of collectibles: 1. Postings of payments and or notations made on the original CURA lists I and II shall be transferred to the combined listings of Form 40.00 accounts furnished by DPS on July 13, 1978; 2. Subtract the total number of accounts and amounts collectible, listed in the separate Form 40.00 accounts received on July 13, 1978, from the total listed in the original CURA I and II lists in order to arrive at the total amount of collectible ITR accounts. 3. After the List of Form 40.00 accounts has been updated, tape by adding machine all the open accounts before forwarding the same to the Collection Service for transmittal to DPC. Indicate in the listings to be forwarded to the national office the total number of the open accounts and the amount involved. The same procedure shall be applied to the ITR accounts. The ITR accounts can be determined by ticking off the accounts listed in the Segregated Form 40.00 listing of accounts received from DPC in the last conference. The number of outstanding ITR accounts and the corresponding total amount involved as determined through this procedure shall be communicated to the Collection Service at the same time that the lists are forwarded. 4. All these operations should be completed before the dates the regions pledged to submit the purged lists (original CURA I and II) as shown hereunder: Region 1 on or before August 15, 1978 Region 2 on or before July 31, 1978 Region 3-A on or before August 31, 1978 Region 3-B on or before August 15, 1978 Region 4-A on or before August 15, 1978 Region 4-B on or before August 15, 1978 Region 4-C on or before August 15, 1978 Region 5 on or before August 15, 1978 Region 6-A on or before August 30, 1978 Region 6-B on or before July 30, 1978 Region 7 on or before October 15, 1978 Region 8 on or before September 15, 1978 Region 9 on or before August 15, 1978 Region 10-A on or before July 31, 1978 Region 10-B on or before August 31, 1978 Region 11-A on or before August 31, 1978 Region 11-B on or before August 31, 1978 Receivable Accounts Division on or before July 31, 1978. 5. Match all available tax dockets to the computer lists of receivables or BIR Form 40.00 so that any account found to have no dockets should be looked into for the purpose of locating the whereabouts of the docket. Follow the procedure defined in the supplementary instruction under RMO No. 56-74. Chiefs of Administrative Branches or the chief of the Records Division shall determine from their files whether there are outstanding dockets which are still in their possession. Outstanding collectible tax dockets should be sent to the collection unit which has jurisdiction or responsibility to collect or enforce them. Only tax dockets which are confirmed by Revenue District Officers, Chiefs, Collection Branch, or Chief, Receivable Accounts Division as closed by payment, ATCA or TDM and transmitted by memo transmittal shall be considered as closed and terminated by the Administrative Branch or Records Division as required under RMO No. 21-76. 6. Segregate the dockets with no notations of payments and which do not appear in any lists of collectibles. Mark the accounts in the listings which are not supported with dockets. 7. Prepare a special Form 40.00 for dockets with Collectible accounts which were determined not to have been previously listed in Form 40.00. This should be labelled "Dockets not listed in previous Form 40.00". 8. Accounts forwarded to the region, the assessment notices or demand letters of which were prepared in the national office, were listed in the Form 40.00 prepared by the assessing divisions in the national office. This fact is so noted on the dockets with the phrase, "Posted to Form 40.00". If there are dockets with collectible accounts involving amounts under the jurisdiction of the national office which do not appear in the DPC list of collectible accounts, and with no notation as to its being included in the Form 40.00, prepare a separate special Form 40.00 for these national accounts which were established as not previously listed. 9. Assessment notices and demands issued after the preparation of the delinquency listings should not appear therein. These accounts are, however, listed in Form 40.00. Old dockets that appear unlisted may have been actually listed previously but was paid, the payment of which was recorded at DPC, but the same payment may not have been posted in the docket itself. Utmost diligence and care should be exercised in the verification of whether or not a deficiency assessment has been previously listed in Form 40.00 before listing said accounts in the Special Form 40.00 10. Forward the original and the duplicate copies of these special Form 40.00 to the Receivable Accounts Division. 11. Determine the whereabouts of dockets corresponding to the accounts found without dockets. This may be done by means of the following procedures: a) Determine the whereabouts of tax dockets which are in the hands of other units, such as those in court, or those which are under administrative protest or are under re-investigation, or those which for one reason or another are in the units other than in the office of the collection units or branches. b) Require all offices concerned (except the collection units) to prepare an inventory of tax dockets mentioned in (a) which are in their possession, in the form prescribed for the purpose (Form attached). c) Match the inventories submitted with the computer list of receivables and/or the BIR Form 40.00's. d) Any of the dockets listed in the inventory but which are found not to have been included in the computer list of receivables and BIR Form 40.00 shall be included in the Special BIR Form 40.00 required in the next preceding paragraph. e) Submit an inventory of accounts with no supporting tax dockets on or before December 4, 1978. f) Submit all Special Form 40.00's prepared for accounts still unpaid but has not been previously listed also on or before December 4, 1978. 12. Use the listing of payments to be furnished by the DPC within the month of August to update all accounts. 13. For Form 40.00 accounts, the beginning inventory as of September 1, 1978 shall be the sum coming from the following sources: a) The outstanding accounts, as of September 1, 1978 of the new combined list of CURA I and II, that is, after the updating was made on this list in July and August, 1978; b) The outstanding accounts as of September 1, 1978 of CURA III (computer list of Form 40.00 made from January, 1975 to June 30, 1977); c) The outstanding accounts as of September 1, 1978 of all those accounts not yet included in CURA I, II, and III but which are in your BIR Form 40.00 reports. Check from CURA III listing the last month of your BIR Form 40.00 included therein. If in CURA III, the last month of your BIR Form 40.00 included was that for the month of July, 1977, then all the outstanding accounts of your BIR Form 40.00 reports from August, 1977 to August, 1978 shall be included as part of the beginning inventory as of September 1, 1978; and d) The outstanding accounts as of September 1, 1978 coming from your transfer-in accounts whose dockets were transferred into your responsibility from other districts or regions, and tax dockets assessed by the National Office and sent to your region. 14. Add to the above inventory the following: a) the BIR Form 40.00 accounts for September, 1978, and b) the transfer-in accounts received in September, 1978. Both the beginning inventory and the additions made during the month shall constitute the total debits to the Control Ledger. 15. The following shall be deducted from the total arrived at in No. 14: a) Total of accounts closed or settled up to September, 1978; b) Total of accounts reduced or cancelled by ATCA or settled by TDM; and c) Total of accounts transferred out of the district or region. All of these shall be supported by the lists as required in RMO 21-77. The balance arrived at after the operations set forth in Nos. 13, 14 and 15, shall become the beginning balance as of October 1, 1978. 16. The listing of CURA I and II and all other ITR accounts received shall continue to be up-dated but priority shall be given to Form 40.00 accounts. A report on the form prescribed for the purpose, copy of which is also attached, shall be submitted for the period ending September 30, 1978. 17. In order to give more time for updating the list of delinquent accounts, the copy of the General Control Ledger maintained in the district and regional offices shall not be required to be submitted to the Receivable Accounts Division for the months of July and August 1978. The first report on the new form, a sample of which is attached hereto, shall be submitted for the month of September. Separate reports for Form 40.00 accounts and for ITR accounts shall be submitted within fifteen days after the end of each month, beginning October 15, 1978. 18. For the purpose of putting up a clean list of receivables from the purged lists that the national and regional offices shall submit to Data Processing Service, the latter office shall list the open accounts in accordance with the following categories: a) ITR accounts which are five (5) or more than five (5) years past due; b) ITR accounts which are less than five (5) years past due; c) Form 40.00 accounts which are five (5) or more than five (5) years past due; and d) Form 40.00 accounts which are less than five (5) years past due. 19. These lists shall be returned to the Revenue Regions and the Receivable Accounts Division not later than October 31, 1978. 20. All accounts purged from the original listings based on the notations made by the Revenue Regions and the Receivable Accounts Division shall be considered as suspense accounts until finally verified by the Data Processing Service from the appropriate source documents. 21. Care shall be exercised in the determination of whether or not accounts can no longer be collected because of prescription. The dockets shall be scrutinized for any action that may suspend the prescriptive period. Dockets closed on the grounds of prescription shall be passed upon by the Legal Branch in the Revenue Regions or by the Legal Service in the National Office before the account is cancelled by issuing an Authority to Cancel Assessment (ATCA). All previous issuances or portions thereof which are inconsistent herewith are hereby repealed. Strict compliance with the provisions of this Revenue Memorandum Order is hereby enjoined. cd EFREN I. PLANA Acting Commissioner of Internal Revenue TAN: P4519-F2828-A-8 INVENTORY OF PENDING TAX DOCKETS ANNEX A Abstract From GENERAL CONTROL LEDGER Form 40 . 00 ACCOUNTS For the Month of _______ [ ] District Accounts [ ] Regional Accounts [ ] Combined Accounts RDO/RR # _________ Station Town ____________ Particulars No. of Amount Accounts Balance Beginning ======= P ========== Add: (1) Form 40.00 accounts for the month (2) Transfer-in accounts Total Accounts Handled for the month ======= ========= Total Accounts Handled during the month ======= ========= Less: Closed during the month: (1) Accounts paid or settled by backpay (Annex "G") (2) Accounts reduced or cancelled by ATCA or settled by TDM (Annex "F") (3) Transfer-out Accounts (Annex "B") Total Accounts Closed ======= ========= Balance End ======= ========= Submitted by: ______________________ Name & Signature ______________________ Designation Note: Your balance beginning for September 1, 1978 shall be the total of all your Form 40.00 accounts from CURA I, II, III and from your Form 40.00 reports subsequently submitted to DPS after CURA III up to August 31, 1978. ANNEX B Abstract From GENERAL CONTROL LEDGER ITR ACCOUNTS For the Month of _____________ [ ] District Accounts [ ] Regional Accounts [ ] Combined Accounts RDO/RR # ___________ Station Town ___________ Particulars No. of Accounts Amount Balance Beginning ======= P ========= Less: Closed during the month: (1) Accounts Paid (2) Cancelled by ATCA or settled by TDM Total Accounts Closed ======= P ========= Balance End ======= P ========= Submitted by: ___________________ Name & Signature ___________________ Designation Note: Your beginning balance for September 1, 1978 shall be the total ITR accounts, CURA I and CURA II, less the postings you have already made up to August 31, 1978.