Procedure in Processing Tax Refunds in Cases Where the Claim Covers Both Refund of Excess Withholding Tax on Wages Under Supplement a and Erroneous Payment of Income Tax Under Section 309, of the Tax Code

March 17, 1976 REVENUE MEMORANDUM ORDER NO. 20-76 SUBJECT : Procedure in Processing Tax Refunds in Cases Where the Claim Covers Both Refund of Excess Withholding Tax on Wages Under Supplement a and Erroneous Payment of Income Tax Under Section 309, of the Tax Code TO : All Internal Revenue Officers and others concerned The following procedures in processing tax refunds in cases where the claim covers both refund of excess withholding tax on wages under Supplement A to Title II and erroneous payment of income tax under Section 309 of the Tax Code, are hereby promulgated for the guidance and compliance of all concerned: SECTION 1. Jurisdiction . The Withholding Tax Division shall have jurisdiction over tax refunds in cases where the claim covers both refund of excess withholding tax on wages and erroneous payment of income tax for the same taxable year. SECTION 2. Form of Claim . In general, refund of taxes erroneously received or collected shall be allowed only if the taxpayer files with the Commissioner in writing a claim for the refund thereof. However, if the erroneous payment is for income tax for 1973 or any subsequent year, refund may be made, even without a written claim therefor, where on the face of the income tax return upon which payment was made, such payment appears clearly to have been erroneously made. SECTION 3. Filing Period of Claim . Subject to the requirement in Section 2 hereof, claims for refund of erroneous payment of income tax treated herein shall be filed within two (2) years after payment of the tax. Otherwise, the claim shall be denied. SECTION 4. Procedure in Processing Claims for Refund of Erroneous Payment . The following procedures shall be observed in processing claims for refund of erroneous payment of income tax: a) Record the claim for refund under erroneous payment in the control book. b) Disapprove claims for refund of the erroneous payment if the claim was filed after two (2) years from the date the erroneous payment was made. c) Pre-audit the income tax return in accordance with existing audit procedures. Refer the income tax return for examination to determine with finality the income tax due from the taxpayer if this is necessary to the determination of the amount refundable arising from the erroneous payment. Prepare an audit or computation sheet showing: 1) the result of the pre-audit of the return; 2) the amount refundable as excess withholding tax; 3) the amount refundable as erroneous payment; and 4) the total amount refundable to the taxpayer. d) Request the Chief, Accounting Division, to verify the erroneous payment, and issue the necessary certification therefor, which shall form part of the docket of the case. e) Request the Chief, Receivable Accounts Division, to verify if claimant has any outstanding internal revenue tax liability. Any unpaid tax liability, including the legal increments due thereon, shall be deducted from the amount of the tax refund. f) If the full amount erroneously paid is claimed and will be refunded, require the surrender of the original receipt in the possession of the taxpayer, which shall form part of the docket. g) Submit the papers on the claim, accompanied by a memorandum for approval, as follows: if the tax refund claimed under Section 309 of the Tax Code is P500.00 or more, to the Commissioner; if below P500.00, to the Deputy Commissioner. h) The Data Processing Center shall prepare one check only to cover both refund of excess withholding tax and erroneous payment of income tax, as approved. i) All refund checks issued to cover claims treated hereunder shall be signed by the Deputy Commissioner. SECTION 5. Procedure in Processing Refund of Excess Withholding Tax . The entire procedure prescribed in processing refundable income tax returns shall be followed with respect to the refund of excess withholding tax. SECTION 6. Repealing Clause . All orders, circulars, and other issuances inconsistent herewith are hereby repealed or amended accordingly. SECTION 7. Effectivity . This order shall take effect immediately. All internal revenue officers concerned are hereby enjoined to follow strictly the provisions hereof. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN: 1456-040-3