Control of Accounts Listed in the DPS Lists of Receivables and Other Control Lists of Receivables Prescribed in this Order

May 28, 1977 REVENUE MEMORANDUM ORDER NO. 21-77 SUBJECT : Control of Accounts Listed in the DPS Lists of Receivables and Other Control Lists of Receivables Prescribed in this Order TO : All Internal Revenue Officers concerned In order to establish a system to control receivable accounts independently of; but adjunct to, the computer system; to be able to obtain promptly current and accurate information for management and budget purposes on the status and volume of receivable accounts; and to be able to enforce collection by summary remedies or other means within the time required by law, this Order is hereby prescribed for compliance of all concerned. cdta A. Jurisdictional Responsibility in Controlling Receivable Accounts : 1. The Receivable Accounts Division of the Collection Service shall control national accounts (where the assessment or aggregate assessments made in a single investigation is over P20,000). 2. The Collection Branch of the Regional Office shall control regional accounts (where the assessment or aggregate assessments made in a single investigation is over P5,000 but not over P20,000). 3. The Collection Unit of the Revenue District Office shall control district accounts (where the assessment or aggregate assessments made in a single investigation is P5,000 or below). B. Journal or Control Lists of Receivable Accounts : 1. Computer List of Receivables . The computer list of receivables issued by the Data Processing Service shall constitute the primary journal or control list of outstanding tax accounts during the period covered by the latest computer list of receivables. 2. Monthly Summary of Taxes Assessed and/or Demanded (BIR Form 40 . 00) . The copy of the monthly reports of the Assessment Units under BIR Form 40.00 furnished the various Collection Units in accordance with RMO No. 23-65, as amended by RMO No. 41-76, shall constitute the journal or control list of the outstanding tax accounts covered by assessment notices or demand letters issued after the issuance of the latest DPS list of receivables. 3. Monthly List of Transfer-In Accounts . At the end of each month, all collection units mentioned in Paragraph "A" of this Order shall inventory or list down in a form, sample of which is marked Annex " A " of this Order, the tax dockets of taxpayers who had transferred into their jurisdiction of responsibility. The transfer is effective upon the receipt of the tax docket of the taxpayer. 4. Monthly List of Transfer-Out Accounts . Likewise at the end of each month, all collection units mentioned in Paragraph "A" shall prepare an inventory list of tax dockets of taxpayers verified to have transferred residence outside the jurisdiction of the collection unit concerned. A sample of this form is marked Annex " B " hereof. The transfer is effective upon the release of the tax docket to other jurisdictions. 5. Quarterly Inventory of the Pending Tax Cases Handled by Units Outside the Collection Service . For the purpose of confirming or updating the control lists of outstanding accounts, a copy of the quarterly inventory list of pending cases involving tax assessments as required in RMO No. 43-67, or as may be required in subsequent Orders, shall be furnished by all Units concerned to their counterpart collection units in the National Office and Regional Offices within the time prescribed in said Order or Orders. (1) The copy of the inventory list coming from the Divisions in the Legal Service, National Audit Divisions, Divisions in the Assessment and Specific Tax Services, and the Collection Enforcement Division shall be furnished the Chief, Receivable Accounts Division through the Revenue Service Chief (Collection). (2) The copy of the inventory list coming from the Legal Branches, the Assessment and Specific Tax Branches, and the Revenue District Offices shall be furnished the Chief, Collection Branch thru the Regional Director. (3) The inventory required herein shall be uniform, indicating the following data: (1) name and address of the taxpayer, (2) kind of tax, (3) assessment/demand number, (4) date of assessment, (5) total amount assessed, and (6) remarks. Samples of these forms for this report are marked Annex " C " and " C-1 " of this Order. The "total amount assessed" should include the total of the basic tax, surcharge, interest, and compromise penalty as indicated in the notice or demand so as to make the total amount in the inventory tally with the total indicated in the computer list of receivables, for purposes of matching and reconciliation. Also for the same purposes, each assessment which covers usually a one-year period should be listed separately, i.e., one after the other, in the inventory although in a single investigation there may be two (2) or more assessments issued against only one taxpayer. (4) In cases where the whereabouts of the taxpayer is unknown, or still under search, or where the taxpayer has left for abroad without an appointed representative in the Philippines, the collection unit concerned shall inventory them separately and treat them as "Suspense Tax Accounts." Sample form for these cases is marked " Annex C-2 ". (5) In cases where the collection of the accounts are enforced by summary remedies, where warrants of distraint and/or levy had been served, or where properties of the taxpayers were already placed under seizure, but sale or forfeiture has not been perfected, and in both cases, there is no pending appeal in the Bureau or in the Court of Tax Appeals, the collection unit concerned shall inventory them separately and treat them as "Special Tax Accounts". Sample form for these cases is marked " Annex C-3 ". C. Supporting Records and Other Devices Used to Control Tax Accounts : 1. Tax Dockets . Each tax account included in the journal or control list of receivables is and should be supported by a tax docket. Tax dockets usually consist of the initialled file copy of the assessment and/or letter of demand, audit sheet, the report of investigation/examination, working sheets, if any, and a copy of the tax return. Additional action documents, like collection letters may be added to the docket depending upon the progress of the case. In some cases, as in the case of deficiency withholding tax, the docket which supports such assessment may consist only of the copy of the letter of demand properly initialled and identified by deficiency assessment number. In the case of forest charges, the initialled file copy of the letter of demand, and a copy of the auxiliary invoice as supported by the scale report of the Forest Development Commission scaler, constitute the docket. In case of franchise tax, the initialled copy of the BIR letter of demand and a copy of the report of investigation of the Commission on Audit may constitute the docket. 2. Transmittal of Tax Dockets . a. The copies of the Monthly Summary of Taxes Assessed and/or Demanded (BIR Form 40.00) which Assessment Units are required to furnish the Collection Units concerned in accordance with RMO No. 41-76, shall serve as the Transmittal List of Tax Dockets. Transmission shall be from the Assessment Divisions, National Office to the Chief, Receivable Accounts Division; from the latter to the Regional Offices; and likewise, from the Regional Office to the Revenue District Offices, depending upon jurisdictional responsibility as delineated in Paragraph "A" of this Order. b. Tax dockets which for any valid reason cannot be transmitted together and simultaneously with the Monthly BIR Form 40.00 should be identified by appropriate remarks in any available space in said BIR Form 40.00, or listed in a covering letter. These untransmitted dockets should be transmitted by means of the form attached to this Order as Annex " D " as soon as the reason for the non-transmittal with the BIR Form 40.00 shall have ceased to exist. c. Upon receipt in the Collection Units concerned, tax dockets should be checked against the pertinent BIR Form 40.00 to determine which dockets were received and which were not. Those which were not received should be traced or requisitioned from the Assessment or any other Unit where they should come from. 3. Unit Ledger Card . a. Docket Index Card Once a docket is received by a collection unit which belongs to its jurisdiction, corresponding index card (BIR Form 27.06) shall be set up and alphabetically arranged. This card must show, for future reference and reconciliation with the computer list of receivables, the name of the taxpayer the assessment/demand number, the kind of tax assessed, the period covered, the date assessed, the amount involved, the date the docket was received by the unit, to whom the docket was charged out of the unit. This serves as a unit ledger card so that in case of payment or cancellation of the account, appropriate data shall be posted to it. b. In one-man collection units where index cards (BIR Form 27.06) are unavailable, or where a carding system cannot be maintained because of recognized lack of personnel, the collection agent's copy of the assessment notices or letters of demand may serve the purposes of the unit ledger cards. As unit ledger cards, they should be utilized to reflect collection activities and as source documents for the posting of payments and the closing of tax accounts. To reflect aging of accounts and collection activities, they should be classified into: (1) delinquent file as basis for office and filed collection actions if tax account is not paid before due date; (2) summary remedies file as basis for recommending to the Revenue District Office the issuance of warrants of levy/distraint/garnishment if account is not paid within three (3) months after tax-payer's receipt of notice or demand, as well as cases already covered by said warrants/s; (3) suspense file where collection action is suspended or postponed because taxpayer is unknown, is abroad without a representative and other valid reasons as ordered by higher authorities; (4) closed file as repository to accumulate copies of assessment notices or letters of demand covered by full payment during the month after which such monthly accumulation shall all be attached to the copy of Form 12.31 report intended for the Collection Branch, Regional Office. 4. Receipt and Release Book . Every unit charged with the handling of tax dockets shall have its own receipt and release book, and record therein the receipt, as well as the release of dockets out of the unit. One book may be used for receipt, and another for release, Pertinent data for reference and reconciliation of records, such as the name of the taxpayer, kind of tax, period covered, the amount involved, and to whom or to what unit the docket was charged shall likewise be recorded in such books. D. Closing of Accounts Paid, Cancelled, or Otherwise Settled: 1. Primary Source Documents to Close Accounts . a. Documents received by designated Collection Units as evidence of payment of tax accounts through the banking system (card copy of RTR, Daily List of RTR issued, and Daily Summary of Internal Revenue Collections) as prescribed in the latest Order on Payment of Internal Revenue Taxes Through Authorized Agent Banks shall serve as primary source documents to close or update tax accounts appearing in the Control Lists of Receivables as defined in paragraph B(1), (2), and (3) of this Order. b. Taxpayers' copies or verified and certified xerox copies of official receipts whether issued through authorized agent banks or by BIR collection officers when presented in connection with collection action or other official transaction with the BIR shall also be considered in closing or updating tax accounts, after reconciling them with appropriate source documents received by Collection Units concerned. 2. Substitute source documents to close accounts . In those places and cases where tax accounts are paid to collection officers under official receipts (as distinguished from bank (RTR), and the taxpayers copies, are not presented for posting, the responsible Collection Units shall close tax accounts through the use of reports or substitute source documents received from the field or other units. This is due to the fact that the principal source documents which close or update the accounts by payment, cancellation, or otherwise are sent direct to the Data Processing Service. The substitute source documents received in the collection units to close accounts are: a. Copy of Collection Report (BIR Form 12 . 31) . Payments for deficiency taxes are identified in this report form under its column "Assessment Number". The Collection Agents are required to indicate the assessment or demand number in said column or space, otherwise, if payment is for self-assessing taxes, the same space or column in left vacant. The copy for the Collection Branch, Regional Office should be coursed through the Office of the Revenue District Officer. b. Copy of the Notice or Demand and/or ATAP . The collection agent shall post the information of payment (the official receipt number, amount paid, date paid, and his signature) on his copy of the assessment notice and letter of demand, and in accordance with paragraph C-3(b) of this order, attach all such copies of notices and demand letters to the Regional Office copy of BIR Form 12.31 and submit the same through the Revenue District Office. The Collection Unit of the Revenue District Office shall detach or retain the copies of notices or demand letter or ATAP which involve payment of district accounts belonging to its jurisdiction for posting. The Regional Office copy of FORM 12.31 shall then be forwarded to the Collection Branch together with the copies of notices and demand letters involving more than P5,000. In turn, the Chief, Collection Branch shall forward and report to the Chief, Receivable Accounts Division, all copies of assessment notices or demand and/or ATAP issued by the National Office (national accounts), the aggregate sum of which is over P20,000 in a single investigation. c. Letters from Taxpayers . Collection letters are sent to the taxpayer with a turn-around reply. In the turn-around reply, the taxpayer indicates the information of his payment. Sample of this collection letter with a turn-around reply is hereto attached marked Annex " E ". The data given by the tax-payer should be checked against BIR Form 12.31 or other source documents. d. Report of payments made in another jurisdiction . Payments to Collection Agents under Revenue official receipts for accounts belonging to other jurisdictions of responsibility shall be reported to the Collection Units concerned within ten (10) days after the end of each month as follows: (1) The Chief, Receivable Accounts Division, shall report to the Office concerned regional and district accounts closed or settled in connection with the processing of applications for tax clearance, or cancelled and/or settled in the National Office due to other reasons so that the Collection Branch or District Office concerned shall update their accounts and include the same in the Monthly Reports referred to in paragraph E(4) hereof. (2) In like manner, the Chief, Collection Branch shall report similar payments to the revenue district offices or to the other regional offices concerned, or to the Chief Receivable Accounts Division, as the case my be. (3) The Revenue District Offices shall report to the other revenue district offices, or other regional offices concerned, or to the Chief, Receivable Accounts Division, depending upon the amount involved all payments of accounts made under revenue official receipts to collection agents of his district where taxpayers' addresses or by reason of jurisdictional responsibility are outside of his jurisdiction. (4) Reporting of payments thru authorized agent banks for accounts belonging to other jurisdictions shall be made in accordance with the orders applicable thereto. e. Copy of the ATCA . Under RMO No. 22-65, triplicate copies of the ATCA are furnished the Collection Branch. The dockets of district accounts which had been cancelled, reduced, or increased at the Regional Office should be returned to the revenue office for use in updating their records. Copy of the ATCA should be filed with the docket. 3. Posting of Payments or Information to Close or Update Accounts . The data of payments, or the material information which will close the account shall be posted to the following documents: a. to the DPS computer list of receivables, if the accounts had already been included therein; b. to the copy of BIR Form 40.00 if the same was not yet included in the computer list. The date of assessment will reveal to which BIR Form 40.00 the account shall be located; c. to the docket of the case; (Please refer to RMO 21-75) d. to the Docket Index Card/Unit Ledger Card. (1) When payment is made in cash, checks, treasury bills, (tax anticipation series), or by back pay certificate of indebtedness, the official receipt number, the amount paid, the date paid, and place of payment shall be posted to the above stated documents. (2) When the account is changed or cancelled because the original amount assessed was reduced, increased, or cancelled, the information of reduction, increase, or outright cancellation shall be posted to the above stated documents such as "Reduced to P___" of "Increased to "P___", or "Cancelled", followed by the ATCA number and date of issue. (Please refer to RMO No. 42-76) An ATCA is issued for reasons like the account is withdrawn upon re-investigation, prescription of the accounts, death of the taxpayer without leaving any property, or the taxpayer is unknown and has left no property. (3) When the account is settled by application of tax credit memo, the corresponding tax debit memo number, the amount applied, and the date of issue shall be posted to the above stated documents. (Please refer to RMO No. 21-65). Submission of Reports Required herein : The following reports are required to be submitted within ten (10) days after the end of each month by and to the Collection Units as indicated hereunder: cd 1. Monthly List of Transfer-In Accounts [see paragraph B(3) above]. 2. Monthly List of Transfer-Out Accounts [see paragraph B(4) above]. 3. Monthly List of Accounts Cancelled by ATCA ( sample form marked as Annex " F "). 4. Monthly List of Accounts Paid (sample form attached marked as Annex " G "). All tax accounts paid to the Offices of Collection Agents in a Revenue District which belongs to the latter's jurisdictional responsibility should be included in the List of Accounts Paid. In the same manner, all regional accounts paid should be included in the Collection Branch's List of Accounts Paid. The Revenue District Officer's reports shall be in four (4) copies, the original and duplicate of which shall be forwarded to the Chief, Collection Branch of his Regional Office and the quadruplicate to the Revenue Service Chief, Data Processing Service. The Chief, Collection Branch's reports shall be in three (3) copies, the original of which, together with the duplicate copies of the reports of the revenue district officers of his region, shall be forwarded to the Chief, Receivable Accounts Division and the triplicate to the Revenue Service Chief, Data Processing Service. The Chief, Receivable Accounts Division's reports shall be in three (3) copies, the original of which shall be submitted to the Revenue Service Chief (Collection) and the Commissioner of Internal Revenue and the triplicate to the Revenue Service Chief (Data Processing Service). A negative report on the same form should nevertheless be submitted by the District and Regional Officers even in the absence of transfer-in, transfer-out or delinquent accounts paid. F. General Control Ledger : 1. There shall be maintained general control ledgers for receivable accounts in each Collection Unit referred to in paragraph "A" of this Order. The pertinent data in this control ledger shall be, (1) date, (2), particulars, (3) debit, (4) credit, and (5) balance. (See sample from attached marked Annex " H ") a. The Revenue District Officer shall maintain only one general control ledger for district accounts belonging to his jurisdiction. b. The Chief, Collection Branch shall maintain one general control ledger for regional accounts, and one for each revenue district office under him for their respective district accounts. The general control ledger for each revenue district office maintained in the Collection Branch shall be similar to those maintained in the district office for district accounts. Also, one general ledger shall be maintained in the Collection Branch for regional and district accounts combined. c. The Chief, Receivable Accounts Division shall maintain one general ledger for national accounts, and another for each of the 17 Regions for regional and district accounts combined. The general ledger maintained in the Receivable Accounts Division for regional and district accounts shall be similar to those maintained in the Regional Office for the regional and district accounts combined. 2. The debit entries of the general control ledger shall be: a. The summary total of number of cases (record count) and the amount involved found at the bottom of the latest DPS computer list of receivables shall be the first debit entry for the year. b. The subsequent monthly debit entries shall be the summary totals indicated in the monthly BIR Form 40.00 for the current year received from the regional and national office. When a particular BIR Form 40.00 received by the Regional Office from the National Office contains both regional and district accounts, the Chief, Collection Branch shall abstract the district accounts, by revenue district, by accomplishing alias BIR Form 40.00 and furnish the revenue district office concerned. The debit entry derived from the summary total of BIR Form 40.00 shall be made despite non-receipt of the corresponding tax dockets by the Regional Office from the National Office, or by the Revenue District Office from the Regional Office. c. Another debit entry shall be taken from the total indicated in the monthly list of transfer-in accounts for the current year. 3. The monthly credit entries of the general control ledger are: a. The summary total derived from the Monthly List of Accounts Paid covered by the computer list of receivables and the BIR Form 40.00 for the current year. b. The summary total derived from the Monthly List of Accounts Cancelled by ATCA for the current year. c. The summary total derived from the Monthly List of Transfer-Out Accounts for the current year. 4. Parenthetical Annotation in the General Control Ledger may be indicated to show the following: a. The number of cases and amount involved of tax accounts pending in court. b. The number of cases and amount involved of tax accounts pending administrative appeal in the Bureau. c. The number of cases and amount involved of tax accounts pending collection enforcement by distraint or levy (there is no pending appeal in the Bureau or in court). d. The number of cases and amount involved of tax accounts where the prescriptive period is suspended because taxpayer is unknown or is known to be out of the country. G. Effectivity : This Order supersedes or amends all provisions of previous Revenue Memorandum or other Orders issued on this subject which are inconsistent herewith. This Order shall take effect beginning with the month of July, 1977. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN: P4519-F2828-A-8 ANNEX A MONTHLY LIST OF TRANSFER-IN ACCOUNTS ANNEX B MONTHLY LIST OF TRANSFER-OUT ACCOUNTS ANNEX C QUARTERLY INVENTORY LIST OF TAX ACCOUNTS UNDER REVIEW IN THE BUREAU ANNEX C-1 QUARTERLY INVENTORY LIST OF TAX ACCOUNTS PENDING IN COURT ANNEX C-2 QUARTERLY INVENTORY LIST OF TAX ACCOUNTS SUSPENDED ANNEX C-3 QUARTERLY INVENTORY LIST OF TAX ACCOUNTS UNDER WDL ANNEX D TRANSMITTAL LIST OF TAX DOCKETS ANNEX E ______________ Date _________________ _________________ _________________ Sir/Madam/Gentleman: The Bureau of Internal Revenue is now in the process of updating its inventory of accounts receivable. In this connection, I have the honor to inform you that our records disclose that you still have a listed tax liability in the amount of _______ for ________ tax covering the period/year of ________ under Assessment/Demand No. _________ dated __________. Since it is possible that you have already settled this tax liability but for one reason or another, the records do not show the payment already made, kindly inform us in writing if you have paid the abovementioned account, indicating the particulars thereof and enclosing a copy of the corresponding official receipt, if possible, or if not, a xerox copy or at least a description thereof. On the other hand, if the abovementioned account has not been paid due to an honest mistake or oversight, please effect the immediate payment thereof to our Collection Agent of your municipality or city with the least possible delay. We deeply regret to cause you any inconvenience, but please bear with us as this is the only way whereby we can come out with an accurate listing of BIR accounts receivable which hopefully will avert molestation of taxpayers and the resultant inconvenience in the future. Very truly yours, EFREN I. PLANA Acting Commissioner By: THEMISTOCLES R. MONTALBAN Chief, Receivable Accounts Division TAN 1389-331-8 (FOR OUR MUTUAL CONVENIENCE, AND FOR THE GUIDANCE OF ALL CONCERNED, KINDLY RETURN THE ATTACHED SHEET AFTER FILLING UP THE APPROPRIATE SPACES AS YOUR REPLY) ANNEX F MONTHLY LIST OF ACCOUNTS CANCELLED BY ATCA ANNEX G MONTHLY LIST OF ACCOUNTS PAID ANNEX H ANNEX I MONTHLY LIST OF TRANSFER-IN ACCOUNTS For BIR Form No. 1245 Instructions 1. This form shall be accomplished within five days after the end of each month. 2. The names of taxpayers which shall be included in this form are those whose tax dockets were received from other office jurisdictions because the taxpayers have changed their addresses or jurisdiction. The Transfer-Out Transmittal Form had been duly accomplished pursuant to the instructions in Revenue Memorandum Order No. 2-79. 3. The amount reported in this form shall be an addition (debit) to the accountability of the collection unit which received it. 4. Assessment numbers and due dates for each account should be indicated separately so that reconciliation or updating with the computer list of receivable shall be possible with this report. 5. Officers required to submit this report: Revenue District Officers b. Chief, Collection Branch Distribution of Copies 1. Original to the Receivable Accounts Division through the Collection Branch 2. Duplicate to the Data Processing Service through the Collection Branch 3. Triplicate to the Collection Branch 4. Quadruplicate File copy MONTHLY LIST OF TRANS-OUT ACCOUNTS For BIR Form No. 1246 Instructions 1. This form shall be accomplished within five days after the end of each month. 2. The names of taxpayers which shall be included in this form are those whose tax dockets have been transferred out to another office or jurisdiction and the Transfer-out Transmittal Form had been only taxpayer changed their addresses to other jurisdiction. 3. The accounts reported in this form shall be a reduction (credit) of the inventory of receivable in one jurisdiction but an increase in the other. Distribution of Copies 1. If reported by the Revenue District Offices for district accounts transferred to another district: Original to the Receivable Accounts Division through the Collection Branch Duplicate to the Collection Branch Triplicate to the Data Processing Service Quadruplicate File, RDO 2. If reported by the Chief, Collection Branch for regional accounts transferred to another region: Original to the Receivable Accounts Division Duplicate File Copy, Collection Branch Triplicate to the Data Processing Service Quadruplicate File, Collection Branch MONTHLY LIST OF ACCOUNTS CANCELLED BY ATCA For BIR Form No. 1247 Instructions 1. This form shall be accomplished by the Revenue District Officers, Chief, Collection Branch, or the Chief, Receivable Accounts Division, within five (5) days after the end of each month. 2. The names of taxpayers to be included in this form are those which ATCAs were issued to cancel their accounts, and provided the accounts were previously included in the computer list of receivable or provided the accounts were previously included in the report under BIR Form 40:00; otherwise, if the accounts were not included in either list (computer list or receivable or BIR Form 40:00), an ATCA need not be included in this report for no deletion of the accounts (credit) shall be reported unless there was a previous debit of the account. 3. Therefore, before any ATCA is included in this report, a posting of the ATCA to the account, either in the computer list of receivable or in the BIR Form 40:00 and/or in the index card should be made before the same is included in this report. 4. Officers required to submit this report: a. Revenue District Officers for district accounts; b. Chief, Collection Branch for regional accounts; and c. Chief, Receivable Accounts Division for national accounts Distribution of Copies 1. Original Data Processing Service 2. Duplicate to the Receivable Accounts Division through the Regional Office 3. Triplicate Collection Branch 4. Quadruplicate File MONTHLY LIST OF ACCOUNT'S PAID QUARTERLY INVENTORY LIST OF TAX ACCOUNTS UNDER REVIEW IN THE BUREAU For BIR Form No. 1249 Instructions 1. This form shall be accomplished within five days after the end of each calendar quarter. 2. The names of the taxpayers which shall be included in this form are those whose tax dockets are under administrative review because of protests made by the taxpayers. The officers required to submit this report are: a. Revenue Service Chiefs (Legal Assessment and Sectoral) and the divisions under them; b. Special Audit Divisions, and other special review units; c. Chiefs of the Assessment & Legal Branches of the Regions; and d. Revenue District Officers. 3. Assessment numbers and due dates for each account should be indicated separately so that reconciliation or updating with the computer list of receivable accounts shall be possible with this report. Distribution of Copies 1. Original to the Receivable Accounts through the Collection Branch or Collection Service 2. Duplicate to the Data Processing Service through the Collection Service 3. Triplicate to the Revenue Service Chief (Assessment) for units under the Assessment Service or to the Legal Service for units under it, or to the Sectoral Service for units under it. 4. Quadruplicate File copy QUARTERLY INVENTORY LIST OF TAX ACCOUNTS PENDING IN COURT For BIR Form No. 1250 Instructions 1. This form shall be accomplish within five (5) days after the end of each quarter. 2. The names of taxpayers which shall be included in the form are those whose tax cases are filed in court and which involves deficiency tax assessments previously reported in BIR Form 40:00. The officers required to submit this report are: a. Chiefs of the Legal Branches; and b. Chiefs of the Litigation and Prosecution Divisions 3. Assessment numbers and due dates for each account should be indicated separately so that updating of the computer list of accounts shall be possible with this report. Distribution of Copies 1. Original to the Receivable Accounts Division 2. Duplicate to the Revenue Service Chief (Legal) 3. Triplicate to the Data Processing Service 4. Quadruplicate to the Collection Branch 5. Quintuplicate File QUARTERLY INVENTORY LIST OF TAX ACCOUNTS SUSPENDED For BIR Form No. 1251 Instructions 1. This form shall be accomplished within five days after the end of each quarter. 2. The names of the taxpayer which shall be included in this form are those whose whereabouts are unknown and those who are abroad but whose forwarding address are likewise unknown. 3. The office required to submit this report are all chiefs of units who are handling tax cases. The Revenue District Officer for district accounts, the Chief, Collection Branch, for regional accounts, and the Chief, Receivable Accounts Division, for national accounts shall gather these reports. 4. Assessments and due dates for each accounts should be indicated separately for easy reconciliation or updating of this report to the computer list of receivable. Distribution of Copies 1. Original to the Receivable Accounts Division through the Collection Branch 2. Duplicate to the Data Processing Service through the Collection Branch 3. Triplicate File copy QUARTERLY INVENTORY LIST OF TAX ACCOUNTS UNDER WDL For BIR Form No. 1252 Instructions 1. This form shall be accomplished within five days after the end of each quarter. 2. The names of taxpayers which shall be included in this form are those whose accounts were placed under distraint and levy; that is, the warrants of distraint and/or levy have been served actually or constructively. Under the remarks column should indicate the date the WDL served. 3. Assessment number and due date should be indicated separately for each account. 4. The officers required to submit this reports are: a. Chief, Collection Enforcement Division, for national accounts b. Chief, Collection Branch, for regional accounts c. Revenue District Officers for district accounts Distribution of Copies 1. Original to the Receivable Accounts Division through the Collection Branch for all WDL issued whether for district, regional or national accounts. 2. Duplicate to the Collection Enforcement Division for WDL issued in the regional and district offices. 3. Triplicate File BIR FORM NO. 1254 Instructions This form is a master control device which shows the aging of accounts and the summary of receivables. This is to be accomplished within five (5) days after the end of each month. Debits entries A. Form 40:00 Accounts 1. Computer listed accounts The first debit entries for this form is the total amount of receivables as shown at the last page of each type of computer listed accounts less the accounts previously reported as closed. 2. Form 40 : 00 Accounts Receivable accounts not included the computer listed accounts are reported monthly under BIR Form 40:00. The total amount shown as receivables at the bottom of BIR form 40:00 report shall be included or debited in this form. If this form is used by the Revenue District Office, only district accounts or accounts involving P5,000 or less are to be debited. If this form is used by the Collection Branch only those accounts which are over P5,000 but not more than P20,000 are to be included. If this form is to be used as a monthly report of the Regional Director, the district accounts and regional accounts for the region shall be consolidated. If this form is used by the Receivable Accounts Division, only those accounts which are over P20,000 shall be included or debited. Follow-up collection letters sent by the National Office to the regional office for national accounts shall not be included or debited in the General control ledger maintained in the regional or district offices. 3. National Assessments Tax dockets for assessment made in the National Office involving, regional and district accounts are transmitted under BIR Form No. 1254 to the Regional Office for collection. The total amount shown at the bottom of the transmittal list for dockets (BIR Form No. 1254) shall be included or debited in this form. However, in exceptional cases, there are tax dockets which are transmitted individually to the regional office but the same shall be included in this form. 4. Transfer-In-Accounts Accounts of tax dockets which have been received under BIR Form No. 1245 from other districts or regions because the corresponding taxpayer have changed or transferred residence shall be debited or included in the form. However, before the same is included in this form, the Transfer-Out Transmittal Form required under RMO No. 2-79 must have been properly accomplished by the office which transmitted the docket. A Special Control Book for this type of account shall be maintained by regional or district offices. 5. Special BIR Form 40 : 00 Accounts This refers only to accounts representing (a) dishonored checks and (b) unvalidated RTRs which notice and demand had been issued and the same are reported in Special BIR Form 40:00 report. B. ITR Accounts Generally, when taxpayers file their income tax returns, the amount due per return are paid. However, technical difficulties are encountered by the computer in matching the amount due per returns as could not be matched by computer method are listed as ITR accounts, which accounts had to be updated manually. The ITR accounts may be listed by different categories. Each category shall be debited separately. Credits entries 1. Accounts Paid The total amount due (not the total amount actually paid) shown at the bottom of the monthly report under BIR Form 1248 shall be credited. Only accounts previously included in the debit entries of this form shall be credited. Where there was no previous debit entry, there shall be no credit entries to close the accounts. 2. Accounts Cancelled by ATCA Only those accounts previously included in the debit entries of this form shall be listed under BIR Form 1245, the total amount due as shown in this form shall be credited in this form. 3. Transfer-Out Accounts Only those accounts previously included in the debit entries of this form and whose tax dockets were transferred out to another district or region by virtue of the Transfer-Out Transmittal Form as required under RMO No. 2-79 shall be credited in this form. A Special Control Book for transfer-out, cases should be maintained in the office. Note: No other entries (debit or credit) are allowed to be entered in this form unless they fall under any of the above-described entries. Accounts reported quarterly under BIR Form No. 1249, 1250, 1251, and 1252 shall be shown at the bottom of this form at the end of each calendar quarter as a parenthetical remark indicating the number of cases, and the total amount involved. Officers Required to Submit this Report 1. Revenue District Officers for district accounts. 2. Chief, Collection Branch, for regional accounts. 3. Revenue Regional Director for consolidated district and 4. Chief, Receivable Accounts Division for national accounts. Distribution of Copies 1. Original to the Receivable Accounts Divisions through the Collection Branch together with the copies of the reports under BIR Forms No. 1245, 1246, 1247, 1248, 1249, 1250, 1251 and 1252; 2. Duplicate to the Collection Branch together with the copies of the reports under BIR Form No. 1245, 1246, 1247, 1248, 1249, 1250, 1251, and 1252; 3. Triplicate to the Processing Service together with the reports under BIR Form Nos. 1248, 1249, 1250, 1251, and 1252; and 4. Quadruplicate File copy together with the file copies of BIR Form Nos. 1248, 1249, 1250, 1251, and 1252. BUREAU OF INTERNAL REVENUE Quezon City From the desk of: Efren J. Plana Commissioner May 28, 1977 Atty. Toledo: Kindly improve the language and include the suggestion of Director Masakayan. Also, draft a very diplomatic letter which will be in lieu of Annex E.(See page 5 of the proposed RMO and attached draft letter I have dictated.) Are backpay certificates of any sort acceptable in payment of taxes. This is a rush RMO which will be discussed on June 6 during the regional conference of Directors. Please expedite and coordinate with Mr. Todio as necessary. Thanks. E. I. PLANA Re: Inventory and control of accounts receivable PRIORITY PROJECT OF THE COLLECTION SERVICE January 28, 1977 MEMORANDUM FOR: The Commissioner Immediate consideration of the within proposed Revenue Memorandum Order on control of accounts, etc. within the Collection Service is respectfully requested. The proposed Order seeks to get the maximum functional utility of existing forms, like the Monthly Summary of Taxes Assessed and or Demanded (BIR Form 40.00), and the collection agents copies of notices and demand letters by utilizing them as control list of receivables and source documents for posting payments, respectively, among others. Once the proposed control system is firmly operational, it is expected that the Collection Service can provide promptly the Commissioner, the Deputy, etc., accurate and up-to-date information on status and inventory of delinquent accounts in all collection levels of the Bureau even in the absence of a yearly DPS inventory of receivables which as of now can not be updated with regular frequency due to alleged lack of computer time. Many features of the proposed Order were the subject of discussions and proposals in national conferences over the years, perhaps as early as 1967, attended by Regional Directors and/or Chiefs of Branches. In fact, the feature making the monthly summary of taxes assessed or demanded (BIR Form 40.00) as one of the control list of receivable accounts have already been installed and practiced in such regional offices like Manila, Bacolod City, Cagayan de Oro City, and may be others, even before the issuance of Revenue Memorandum Order No. 41-76 which expressly requires the preparation of extra copies for district accounts so that the pertinent revenue district office can have its copy thereof as its control list of accounts receivable. The control of tax accounts and supporting record is one of two long-range objectives set forth in the Collection Service Plans and Programs for FY 1975-76 dated September 29, 1975, and also one of the major problems identified by the undersigned in his report to the Commissioner dated November 26, 1976 on the subject "Major Collection Activities, Governing Instructions, and Problems and Solutions". Mr. Montalban and the undersigned spent much time in making a thorough study, close analysis and correlation of current reporting and control procedures on tax assessments and delinquent accounts which resulted in the proposed Order. The proposed Order is also tied up to the current project on the expanded payment of taxes thru authorized agent banks, and one seminar for both projects can be undertaken. Respectfully submitted, HONORIO A. TODIO Revenue Service Chief (Collection) TAN 1575-927-7 January 27, 1977 MEMORANDUM FOR: The Commissioner of Internal Revenue Thru Channel Re : Proposed Memorandum on " Control of Accounts Listed in the DPS Lists of Receivables and Other Control Lists of Receivables prescribed in this Order " I am submitting to you herewith for your signature an Order how to control accounts created by examination or investigation of tax returns. These are the accounts that go into the annual inventory or (DPS computer) list of receivables. Up to this time, the Receivable Accounts Division, the division charged to coordinate the collection enforcement activities of delinquent or receivable accounts, has been dependent upon the computer to come up with the data or inventory or delinquent accounts. Unfortunately, for reasons beyond the control of the Data Processing Service, it can not given an accurate and up to date information on delinquent accounts. As a matter of fact, the latest inventory of delinquent or receivable accounts released by the Data Processing Service is as of November 10, 1975 which includes accounts set up only for 1972 and prior years. Accounts set up and still outstanding as of this date for the years 1973, 1974, 1975, and 1976 are not inventoried by the computer and release to the field. I am told that the outstanding accounts for the years 1973 and 1974 will be released this month. How about for the years 1975 and 1976? It remains uncertain. Therefore, in order to give a current and nearly accurate picture of outstanding delinquent accounts, the Collection Service must install a control system for receivable accounts independently from, but adjunct to the computer system. Hopefully, it is expected that by this Order we are submitting to you for your signature, the Collection Service will be able to give a much more prompt and much more accurate information of the status of delinquent accounts even before the computer could do it for us, especially for budget hearings and for management purposes. To make this system work effectively, it is strongly recommended that a seminar be conducted to Division Chiefs, Branch Chiefs, Revenue District officers and to all employees directly involved in this system immediately after this Order is approved. THEMISTOCLES R. MONTALBAN Chief, Receivable Accounts Division TAN-1389-331-8 Address______________ ______________ ______________ ______________ Date The Commissioner of Internal Revenue Quezon City ATTENTION: Chief, Receivable Accounts Division Sir: In reply to your letter dated _____________. I/we have the honor to inform you that I/we have: ( ) fully paid said assessment under [ ] BIR [ ] Central Bank Receipt No. ________ in the amount of P _________ on __________ at ____________. (Attach xerox copy of the receipt, if possible.) ( ) partially paid said assessment in the amount of P_______ under [ ] BIR [ ] Central Bank Receipt No. _____________ on __________ at ____________. ( ) not paid said assessment because __________________________________ _____________________________________________________________ _____________________________________________________________ ( ) protested the said assessment, a copy of said protest is enclosed for your information and guidance. Very truly yours, __________________ Assessment/Demand No. _____________ Date Due _________ Amount _____ May 24, 1977 MEMORANDUM FOR The Commissioner of Internal Revenue The proposed procedures will definitely provide management with an accurate accounting and up-to-date information of the status of internal revenue taxes assessed and demanded in the different levels of jurisdiction. It is suggested that Data Processing Center be furnished copy of the Monthly List of Accounts closed either by payment or ATCA, and Accounts Transferred In or Out of the Region for counter checking with the source documents, Revenue Official Receipts (ROR), Bank Official Receipts, (BOR) and Revenue Tax Receipts (RTR). This has to be incorporated in the proposed memorandum. The idea is to warn posting officers. Any account which has been dropped from the DPC list and which the collection unit has no knowledge as to how it was closed, should be communicated to the RSC, Collection as a counter check on the DPC operation. The procedures proposed to be done manually can also be done by DPC much faster and more accurately as soon as we have the capacities already. We have the systems and programs for all of these but they can not be implemented. Sir, knowing already the background and reasons for the existence of the "unreliable" computer list of receivables, DPC can come up with clean lists as soon as it is already capable. We will be listing the Receivables for 1975 which are clean receivables only, that is, after matching the ITRs and Form 40.00s with the ORs and BORs now on tape. In the meantime, the 1974 receivables will have to wait for the time our computer system is upgraded. M. N. MASAKAYAN Revenue Service Chief (Data Processing) TAN: M2250-A0616-A-1 May 28, 1977 REVENUE MEMORANDUM ORDER NO. SUBJECT : Control of Accounts Listed in the DPS Lists of Receivables and Other Control Lists of Receivables prescribed in this Order TO : All Internal Revenue Officers concerned In order to establish a system to control receivable accounts independently from, but adjunct to, the computer system; to be able to obtain promptly current and accurate information for management and budget purposes on the status and volume of receivable accounts; and to be able to enforce collection within the time required by law, this Order is hereby prescribed for compliance of all concerned. A. Jurisdictional Responsibility in Controlling Receivable Accounts : 1. The Receivable Accounts Division of the Collection Service shall control national accounts (where the assessment or aggregate assessments made in a single investigation is over P20,000). 2. The Collection Branch of the Regional Office shall control regional accounts (where the assessment or the aggregate assessments made in a single investigation is over P5,000 but not over P20,000). 3. The Collection Unit of the Revenue District Office shall control district accounts (where the assessment or aggregate assessments made in a single investigation is P5,000 or below). B. Journal or Control Lists of Receivable Accounts : 1. Computer List of Receivables . The computer list of receivables issued by the Data Processing Service shall constitute the primary journal or control list of outstanding tax accounts from prior years up to the latest computer list of receivables. 2. Monthly Summary of Taxes Assessed and/or Demanded (BIR Form 40 . 00) . The copy of the monthly reports of the Assessment Units under BIR Form 40.00 furnished the various Collection Units in accordance with RMO No. 23-65, as amended by RMO No. 41-76, shall constitute the journal or control list of the outstanding tax accounts covered by the assessment notices or demand letters issued after the issuance of the latest DPS list of receivables. 3. Monthly List of Transfer-In Accounts At the end of each month, all collection units mentioned in Paragraph "A" of this Order shall inventory or list down in a form, sample of which is marked Annex " A " of this Order, the tax dockets of taxpayers who had transferred into their jurisdiction of responsibility. The transfer is effective upon the receipt of the tax docket of the taxpayer. 4. Monthly List of Transfer-Out Accounts . Likewise, at the end of each month, all collection units Mentioned in Paragraph "A" shall prepare an inventory list of tax dockets of taxpayers verified to have transferred residence outside the jurisdiction of the collection unit concerned. A sample of this form is marked Annex " B " hereof. The transfer is effective upon the release of the tax docket to other jurisdictions. 5. Quarterly Inventory of Pending Tax Cases Handled by Units Outside the Collection Service . For the purpose of confirming or updating the control lists of outstanding accounts, a copy of the quarterly inventory list of pending cases involving tax assessments as required in RMO No. 43-67, or as may be required in subsequent Orders, shall be furnished by all Units concerned to their counterpart collection units in the National Office and Regional Offices within the time prescribed in said Order or Orders. (1) The copy of the inventory list coming from the Divisions in the Legal Service, National Audit Divisions, Divisions in the Assessment and Specific Tax Services, and the Collection Enforcement Division shall be furnished the Chief, Receivable Accounts Division through the Revenue Service Chief (Collection). (2) The copy of the inventory list coming from the Legal Branches, the Assessment and Specific Tax Branches, and the Revenue District Offices shall be furnished the Chief, Collection Branch thru the Regional Director. (3) The inventory required herein shall be uniform, indicating the following data: (1) name and address of the taxpayer, (2) kind of tax, (3) assessment/demand number, (4) date of assessment, (5) total amount assessed, and (6) remarks. Samples of these forms for this report are marked Annex " C " and " C-1 " of this Order. The "total amount assessed" should include the total of the basic tax, surcharge, interest, and compromise penalty as indicated in the notice or demand so as to make the total amount in the inventory tally with the total indicated in the computer list of receivables, for the purpose of matching and reconciliation. Also for the same purposes, each assessment which covers usually a one-year period should be listed separately, i.e., one after the other, in the inventory although in a single investigation there may be two (2) or more assessments issued against only one taxpayer. (4) In cases where the whereabouts of the taxpayer is unknown, or still under search, or where the taxpayer has left abroad without appointed representative in the Philippines, the collection unit concerned shall inventory them separately and treat them as "Suspense Tax Accounts". Sample form for these cases is marked " Annex C-2 ". (5) In the cases where the collection of the accounts are enforced by summary remedies, where warrants of distraint and/or levy had been served, or where properties of the taxpayers were already placed under seizure, but sale or forfeiture has not been perfected, and in both cases, there is no pending appeal in the Bureau or in the Court of Tax Appeals, the collection unit concerned shall inventory them separately and treat them as "Special Tax Accounts". Sample form for these cases is marked " Annex C-3 ". C. Supporting Records and Other Devices Used to Control Tax Accounts : 1. Tax Dockets . Each tax account included in the journal or control list of receivables is and should be supported by a tax docket. Tax dockets usually consist of the initiated file copy of the assessment and/or letter of demand, audit sheet, the report of investigation/examination, working sheets, if any, and a copy of the tax return. Additional action documents, like collection letters may be added to the docket depending upon the progress of the case. In some cases, as in the case of deficiency withholding tax, the docket which supports such assessment may consist only of the copy of the letter of demand properly initialed and identified by deficiency assessment number. In the case of forest charges, the initialed file copy of the letter of demand, and a copy of the auxiliary invoice as supported by the scale report of the Forest Development Commission scaler, constitute the docket. In case of franchise tax, the initialed copy of the BIR letter of demand and a copy of the report of investigation of the Commission on Audit may constitute the docket. 2. Transmittal of Tax Dockets . a. The copies of the Monthly Summary of Taxes Assessed and/or Demand (BIR Form 40.00) which Assessment Units are required to furnish the Collection Units concerned in accordance with RMO No. 41-76, shall serve as the Transmittal List of Tax Dockets. Transmission shall be from the Assessment Divisions, National Office to the Chief, Receivable Accounts Division; from the latter to the Regional Offices; and likewise, from the Regional Office to the Revenue District Offices, depending upon jurisdictional responsibility as delineated in Paragraph "A" of this Order. b. Tax Dockets which for any valid reason cannot be transmitted together and simultaneously with the Monthly BIR Form 40.00 should be identified by appropriate remarks in any available space in said BIR Form 40.00, or listed in a covering letter. These untransmitted dockets should be transmitted by means of the form attached to this Order as Annex " D " as soon as the reason for the non-transmittal with the BIR Form 40.00 shall have ceased to exist. c. Upon receipt in the Collection Units concerned, tax dockets should be checked against the pertinent BIR Form 40.00 to determine which dockets were received and which were not. Those which were not received should be traced or requisitioned from the Assessment or any other Unit where they should come from. 3. Unit Ledger Card . a. Docket Index Card Once a docket is received by a collection unit which belongs to its jurisdiction, corresponding index card (BIR Form 27.06) shall be set up and alphabetically arranged. This card must show, for future reference and reconciliation with the computer list of receivables, the name of the taxpayer, the assessment/demand number, the kind of tax assessed, the period covered, the date assessed, the amount involved, the date the docket was received by the unit, to whom the docket was charged out of the unit. This serves as a unit ledger card so that in case of payment or cancellation of the account, appropriate data shall be posted to it. b. In one-man collection units where index cards (BIR Form 27.06) are unavailable, or where a carding system cannot be maintained because of recognized lack of personnel, the collection agent's copy of the assessment notices or letters of demand may serve the purposes of the unit ledger cards. As unit ledger cards, they should be utilized to reflect collection activities and as source documents for the posting of payments and the closing of tax accounts. To reflect aging of accounts and collection activities, they should be classified into: (1) delinquent file as basis for office and field collection actions if tax account is not paid before due date; (2) summary remedies file as basis for recommending to the Revenue District Office the issuance of warrants of levy/distraint/garnishment if account is not paid within three (3) months after taxpayer's receipt of notice or demand, as well as cases already covered by said warrant/s; (3) suspense file where collection action is suspended or postponed because taxpayer is unknown, is abroad without a representative, and other valid reasons as ordered by higher authorities; (4) closed file as repository to accumulate copies of assessment notices or letters of demand covered by full payment during the month after which such monthly accumulation shall all be attached to the copy of Form 12.31 report intended for the Collection Branch, Regional Office. 4. Receipt and Release Book . Every unit charged with the handling of tax dockets shall have its own receipt and release book, and record therein the receipt, as well as the release of dockets out of the unit. One book may be used for receipt, and another for release. Pertinent data for reference and reconciliation of records, such as the name of the taxpayer, kind of tax, period covered, the amount involved, and to whom or to what unit the docket was charged shall likewise be recorded in such books. D. Closing of Accounts Paid, Cancelled, or Otherwise Settled: 1. Primary Source Documents to Close Accounts . a. Documents received by designated Collection Units as evidence of payment of tax accounts through the banking system (card copy of RTR, Daily List of RTR issued, and Daily Summary of Internal Revenue Collections) as prescribed in the latest Order on Payment of Internal Revenue Taxes Through Authorized Agent Banks shall serve as primary source documents to close or update tax accounts appearing in the Control Lists of Receivables as defined in paragraph B(1), (2), and (3) of this Order. b. Taxpayers' copies or xerox copies of official receipts whether issued through authorized agent banks or by BIR collection officers when presented in connection with collection action or other official transaction with the BIR shall also be considered in closing or updating tax accounts, after reconciling them with appropriate source documents received by Collection Units concerned. 2. Substitute source documents to close accounts . In those places and cases where tax accounts are paid to collection officers under official receipts (as distinguished from bank (RTR), and the taxpayers' copies are not presented for posting, the responsible Collection Units shall close tax accounts through the use of reports or substitute source documents received from the field or other units. This is due to the fact that the principal source documents which close or update the accounts by payment, cancellation, or otherwise are sent direct to the Data Processing Service. The substitute source documents received in the collection units to close accounts are: a. Copy of the Collection Report (BIR Form 12 . 31) . Payments for deficiency taxes are identified in this report form under its column "Assessment Number". The Collection Agents are required to indicate the assessment or demand number in said column or space, otherwise, if payment is for self-assessing taxes, the same space or column is left vacant. The copy for the Collection Branch, Regional Office should be coursed through the Office of the Revenue District Officer. b. Copy of the Notice or Demand and/or ATAP . The collection agent shall post the information of payment (the official receipt number, amount paid, date paid, and his signature) on his copy of the assessment notice and letter of demand, and in accordance with paragraph C-3(b) of this Order, attach all such copies of notices and demand letters to the Regional Office copy of BIR Form 12.31 and submit the same through the Revenue District Office. The Collection Unit of the Revenue District Office detach or retain the copies of notices and demand letter or ATAP which involve payment of district accounts belonging to its jurisdiction for posting. The Regional Office copy of FORM 12.31 then forwarded to the Collection Branch together with the copies of notices and demand letters involving more than P5,000. In turn, the Chief, Collection Branch shall forward and report to the Chief, Receivable Accounts Division, all copies of assessment notices or demand and/or ATAP issued by the National Office (national accounts), the aggregate sum of which is over P20,000 in a single investigation. c. Letters from Taxpayers . Collection letters are sent to the taxpayer with a turn-around reply. In the turn-around reply, the taxpayer indicates the information of his payment. Sample of this collection letter with a turn-around reply is hereto attached marked Annex " E ". The data given by the taxpayer should be checked against BIR Form 12.31 or other source documents. d. Report of payments made in another jurisdiction . Payments to Collection Agents under revenue official receipts for accounts belonging to other jurisdictions or responsibility shall be reported to the Collection Units concerned within ten (10) days after the end of each month as follows: (1) The Chief, Receivable Accounts Division, shall report to the office concerned regional and district accounts closed or settled in connection with the processing of applications for tax clearance, or cancelled and/or settled in the National Office due to other reasons so that the Collection Branch or District Office concerned shall update their accounts and include the same in the Monthly Reports referred to in paragraph E(4) hereof. (2) In like manner, the Chief, Collection Branch shall report similar payments to the revenue district offices or to the other regional offices concerned, or to the Chief, Receivable Accounts Division, as the case may be. (3) The Revenue District Offices shall report to the other revenue district offices, or other regional offices concerned, or to the Chief, Receivable Accounts Division, depending upon the amount involved, all payments of accounts made under revenue official receipts to collection agents of his district where taxpayers' addresses or by reason of jurisdictional responsibility are outside of his jurisdiction. (4) Reporting of payments thru authorized agent banks for accounts belonging to other jurisdictions shall be made in accordance with the orders applicable thereto. e. Copy of the ATCA . Under RMO No. 22-65, triplicate copies of the ATCA are furnished the Collection Branch. The dockets of district accounts which had been cancelled, reduced, or increased at the Regional Office should be returned to the revenue office for use in updating their records. Copy of the ATCA should be filed with the docket. 3. Posting of Payments or Information to Close or Update Accounts . The data of payments, or the material information which will close the account shall be posted to the following documents: a. to the DPS computer list of receivables, if the accounts had already been included therein; b. to the copy of BIR Form 40.00 if the same was not yet included in the computer list. The date of assessment will reveal to which BIR Form 40.00 the account shall be located; c. to the docket of the case; (Please refer to RMO 21-75) d. to the Docket Index Card/Unit Ledger Card. (1) When payment is made in cash, check, treasury bills, (tax anticipation series), or by back pay certificate of indebtedness, the official receipt number, the amount paid, the date paid, and place of payment shall be posted to the above stated documents. (2) When the account is cancelled because the original amount assessed was reduced, increased, or cancelled, the information of reduction, increase, or outright cancellation shall be posted to the above stated documents such as "Reduced to P____", or "Increased to P____", or "Cancelled", followed by the ATCA number and date of issue. (Please refer to RMO No. 42-76) An ATCA is issued for reasons like the account is withdrawn upon re-investigation, prescription of the accounts, death of the taxpayer without leaving any property, or the taxpayer is unknown and has left no property. (3) When the account is settled by application of tax credit memo, the corresponding tax debit memo number, the amount applied, and the date of issue shall be posted to the above stated documents. (Please refer to RMO No. 21-65). E. Submission of Reports Required herein : The following reports are required to be submitted within ten (10) days after the end of each month by and to the Collection Units as indicated hereunder: 1. Monthly List of Transfer-In Accounts [see paragraph B(3) above]. 2. Monthly List of Transfer-Out Accounts [see paragraph B(4) above]. 3. Monthly List of Accounts Cancelled by ATCA (sample form marked as Annex " F "). 4. Monthly List of Accounts Paid (sample form attached marked as Annex " G "). All tax accounts paid to the Offices of Collection Agents in a Revenue District which belongs to the latter's jurisdictional responsibility should be included in the List of Accounts Paid. In the same manner, all regional accounts paid should be included in the Collection Branch's List of Accounts Paid. The Revenue District Officer's reports shall be in three (3) copies, the original and duplicate of which shall be forwarded to the Chief, Collection Branch of his Regional Office. The Chief, Collection Branch's reports shall be in two (2) copies, the original of which, together with the duplicate copies of the reports of the revenue district officers of his region, shall be forwarded to the Chief, Receivable Accounts Division. The Chief, Receivable Accounts Division's reports shall be in two (2) copies, the original of which shall be submitted to the Revenue Service Chief (Collection) and the Commissioner of Internal Revenue A negative report on the same form should nevertheless be submitted by the District and Regional Officers even in the absence of transfer-in, transfer-out or delinquent accounts paid. F. General Control Ledger : 1. There shall be maintained general control ledgers for receivable accounts in each Collection Unit referred to in paragraph "A" of this Order. The pertinent data in this control ledger shall be: (1) date, (2) particulars, (3) debit, (4) credit, and (5) balance. (See sample form attached marked Annex " H ") a. The Revenue District Officer shall maintain only one general control ledger for district accounts belonging to his jurisdiction. b. The Chief, Collection Branch shall maintain one general control ledger for regional accounts, and one for each revenue district office under him for their respective district accounts. The general control ledger for each revenue district office maintained in the Collection Branch shall be similar to those maintained in the district office for district accounts. Also, one general ledger shall be maintained in the Collection Branch for regional and district accounts combined. c. The Chief, Receivable Accounts Division shall maintain one general ledger for national accounts, and another for each of the 17 Regions for regional and district accounts combined. The general ledger maintained in the Receivable Accounts Division for regional and district accounts shall be similar to those maintained in the Regional Office for the regional and district accounts combined. 2. The debit entries of the general control ledger control shall be: a. The summary total of number of cases (record count) and the amount involved found at the bottom of the latest DPS computer list of receivables shall be the first debit entry for the year. b. The subsequent monthly debit entries shall be the summary totals indicated in the monthly BIR Form 40.00 for the current year received from the regional and national office. When a particular BIR Form 40.00 received by the Regional Office from the National Office contains both regional and district accounts, the Chief, Collection Branch shall abstract the district accounts, by revenue district, by accomplishing alias BIR Form 40.00 and furnish the revenue district office concerned. The debit entry derived from the summary total of BIR Form 40.00 shall be made despite non-receipt of the corresponding tax dockets by the Regional Office from the National Office, or by the Revenue District Office from the Regional Office. c. Another debit entry shall be taken from the total indicated in the monthly list of transfer-in accounts for the current year. 3. The monthly credit entries of the general ledger control are: a. The summary total derived from the Monthly List of Accounts Paid covered by the computer list of receivables and the BIR Form 40.00 for the current year. b. The summary total derived from the Monthly List of Accounts Cancelled by ATCA for the current year. c. The summary total derived from the Monthly List of Transfer-Out Accounts for the current year. 4. Parenthetical Annotation in the General Control Ledger may be indicated to show the following: a. The number of cases and amount involved of tax accounts pending in court. b. The number of cases and amount involved of tax accounts pending administrative appeal in the Bureau. c. The number of cases and amount involved of tax accounts pending collection enforcement by distraint or levy (there is no pending appeal in the Bureau or in court). d. The number of cases and amount involved of tax accounts where the prescriptive period is suspended because taxpayer is unknown or is known to be out of the country. G. Effectivity: This Order supersedes or amends all provisions of previous Revenue Memorandum or other Orders issued on this subject which are inconsistent herewith. This Order shall take effect beginning with the month of January 1977. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 February 3, 1977 MEMORANDUM FOR The Deputy Commissioner Proposed memo seeks to establish a system by which to control receivable accounts independently from, but adjunct to, the computer system. The aim is to enable the Collection Service to provide an accurate and up-to-date information on the overall status and inventory of delinquent accounts in all levels of the Bureau National, Regional and District with the use of General Control Ledgers. For the purpose, the following will be considered as Control Lists of Receivable Accounts: 1. Computer List of Receivables 2. BIR Form 40.00 3. Monthly List of Transfer-In Accounts 4. Monthly List of Transfer-Out Accounts 5. Quarterly Inventory of Pending Tax Cases Handled by Units Outside the Collection Service. Each tax account in any of these lists will be, and should be, supported by the corresponding tax docket. Every collection unit will have a Docket Index Card of all tax docket received by it. This will serve as a unit ledger card which will be utilized to reflect collection activities pertaining to the account. In the closing of the accounts, the source documents are classified into primary and substitute source documents. Documents received by designated collection units as evidence of payments of tax accounts through banking system such as card copy of RTR, Daily List of RTR issued and Daily Summary of Internal Revenue Collections are considered primary source documents, also considered as such are taxpayer's copies or xerox copies of official receipts, after reconciling them with appropriate source documents. The following are considered substitute source documents. 1. Copy of Collection Report (BIR Form 12.31) 2. Copy of the Notice or Demand and/or ATAP. 3. Letters from taxpayers indicating information of payment which must be checked against BIR Form 12.31 or other source documents. 4. Reports of collection agents on payments received for accounts belonging to other jurisdictions of responsibility. 5. Copy of the ATCA. As a summary record, a general control ledger will be maintained. In the RDO, the ledger will be for district accounts only; that to be maintained in the Collection Branch will be for regional accounts; and that in the Receivable Accounts Division for national accounts. In addition, however, the Chief, Collection Branch, shall maintain a general control ledger for each of the revenue districts on district accounts and the Chief, Receivable Accounts Division shall likewise maintain one general ledger for each of the 17 regional offices on regional and district accounts combined. If the order is promulgated and is well implemented, the desired result may be attained. The people to implement it must, however, be thoroughly briefed because its operation is somewhat complicated and the element of faith is very material to its successful implementation. Respectfully submitted, CESAR M. VALDEZ Head Revenue Executive Assistant TAN-1592-826-0