Prescribing the Policies, Guidelines and Procedure for the Stop Fiber Capability Rollout for computerized RDO

July 18, 2000 REVENUE MEMORANDUM ORDER NO. 22-00 TO : All Internal Revenue Officers and Employees Concerned SUBJECT : Prescribing the Policies, Guidelines and Procedure for the Stop Fiber Capability Rollout for Computerized RDO I. OBJECTIVES : This order is issued: 1. To set policies, guidelines and procedures for the Stop Filer Capability Rollout; 2. To set performance measurement and statistical reporting guidelines on stop filer cases; and 3. To manage operations using existing resources (e.g. Seizure Agents/Revenue Officer (Assessment)). II. DEFINITION OF TERMS : 1. STOP FILER CAPABILITY the combination of human performance, business process and technology aimed at collectibly ensuring that registered taxpayers who failed to file their tax returns within the prescribed period are identified and given proper and timely action to ensure the Bureau's efficiency and taxpayers compliance. 2. SOFT LAUNCH PHASE aims to clean-up registration records of identified stop filer for a period of one (1) month. During this phase, no reminder letters are released and no case investigation required. 3. HARD LAUNCH PHASE will occur after meeting the exit criteria for soft launch. The hard launch period will focus on normal stop filer processing wherein stop filer cases will be created and assigned to seizure agents/examiners for monitoring and proper action. III. POLICIES : 1. Stop Filer Capability rollout shall be implemented in two phase approach: Soft Launch phase and Hard Launch phase covering a number of tax types: Income Tax (IT,) Percentage Tax (PT), Value-Added Tax (VAT), Withholding Tax on Banks (WB), Withholding Tax on Compensation (WC), Tax Withheld on Government Money Payments (WG), Expanded Withholding Tax (WE) and Withholding Tax on Fringe Benefits (WR). Each Revenue District Office (RDO) shall undergo the soft launch phase for one month, followed by a two-month hard launch phase (i.e. normal stop filer processing). ADaEIH 2. Identification of stop filer cases will only be conducted for due dates covering the one-month period prior to the rollout date. All open, unassigned stop filer cases prior to soft launch shall be closed. Corresponding reminder letters will be purged. 3. Each seizure agent is expected to be assigned a minimum of 50 stop filer cases and close a minimum 25 stop filer cases every month. Each identified Revenue Officer (Assessment) is expected to be assigned a minimum of 25 stop filer cases and close a minimum of 13 stop filer cases every month. 4. A consolidated management report on stop filer cases shall be expected from the National Office (NO) Systems Operation Division of Information Systems Operation Service. IV. PROCEDURES : The procedures for soft launch and hard launch of stop filer rollout are described below: 1. Soft Launch A. Revenue Data Center (RDC) 1. The Computer Operations Network and Engineering (CONE) Division shall generate a listing of RDO stop filers after every first system run of every form type. Refer to Attachment A for sample listing of RDO stop filers. 2. The Administrative Division, upon receiving the listing from CONE, will forward the list to the concerned Revenue District Office (RDO). B. Revenue District Office (RDO) 1. The Revenue District Officer shall: a. Submit weekly status report to Regional Director and ACIR, Collection Service. Refer to Attachment B-3 for sample report; b. Ensure that stop filer cases are being acted upon by Seizure Agents/Revenue Officer (Assessment): and c. Attend weekly Implementation Assistance Team (IAT) meeting/other related meeting. 2. Collection Section Chief/Group Supervisors shall: a. Assign cases to Secure Agents/available Revenue Officers (Assessment) to reach the minimum number of cases to be verified (20% of the total cases created). The assignment will be based on the number of cases. This means that if a seizure agent/revenue officer is assigned to a taxpayer with 50 stop filer cases. his total case assignment will be counted as 50. b. Attend weekly Implementation Assistance Team (IAT) meeting/other related meeting. 3. Seizure Agents/Revenue Officers (Assessment) shall: a. Focus on cleaning-up REG records by validating stop filer cases and taking note of the following (Refer to Attachment B-1 for the detailed procedures): i. Adopted taxpayers; ii. incorrect/excessive tax types or form types of taxpayers; SHCaDA iii. No longer existing/operating taxpayers; and iv. Suspended payments of taxpayers. b. Coordinate with the Taxpayer Service Section (TSS) by providing them a list of taxpayers whose REG information need to be updated (e.g. adopted taxpayers, incorrect/excessive tax types or form types of taxpayers, no longer existing/operating taxpayers); c. Coordinate with Error Handlers to resolve suspended payments; and d. Prepare reports documenting the results of the verification and the proper actions taken. Reports shall be submitted to Revenue District Officer. Refer to Attachments B-2. and B-3 for the corresponding report templates. 4. The Taxpayer Service Section (TSS) shall: Update REG information based on the list of taxpayers provided by Collection Section by following these guidelines: 1. If the taxpayer is an adopted taxpayer i. Determine home RDO ii. Transfer taxpayer to home RDO using on-line procedures 2. If the taxpayer has registered for excessive tax type/s i. Ease tax type by changing the form status to 'Canceled' ii. Put a filing end date for the particular tax type 3. If the taxpayer is no longer existing Change the status code of the taxpayer to 'Ceased' or 'Dissolved depending on the reason noted by the seizure agent. C. Regional Office (RO) Collection Division The Regional Office (RO) Collection Division shall monitor the performance of various RDOs with regard to stop filer verification activities. D. Collection Service 1. Submit monthly status report to DCIR Operations. Refer to Attachment B-4 for sample report: and 2. Monitor the performance of various regions with regard to collections obtained from stop filers. 2. Hard Launch A. Revenue Data Center (RDC) 1. CONE shall: a. Generate at the end of each week a listing of all stop filers identified during the week; b. Print initial reminder letters generated by the Integrated Tax System (ITS). Refer to Attachment C for a sample initial reminder letter; c. Print final reminder letters generated by the Integrated Tax System (ITS) for open, assigned cases, fifteen (15) days after Seizure Agents/Revenue Officers (Assessment) perform initial follow up steps on stop filers, as indicated in the RCS case template (see Attachment D). Refer to Attachment E for a sample final reminder letter; d. Print To Do Lists generated by the Integrated Tax System (ITS), 16th day after the generation of final reminder letters; and e. Generate and print regular management reports on all RDOs which have rolled out Stop Filer Capability. Refer to Attachments F-1, F-2, and F-3 for the sample reports; f. Provide copies of report to concerned Revenue District Offices (RDOs) and to the Regional Office (RO). ICcaST 2. System Administrator shall: a. Grant proper access to the user; and b. Add names of Seizure Agents/Revenue Officer (Assessment) to ctm_full_names. 3. Administrative Division shall: Forward Stop Filer listing to the Revenue District Office (RDO) on the first working day of each week; 4. Quality Assurance Division (QAD) shall. a. Release initial reminder letters; b. Forward final reminder letters to the Revenue District Office (RDO); c. Forward To Do Lists to the Revenue District Office. B. For Revenue District Office (RDO) 1. The Revenue District Officer shall: a. Request RDC Sys. Adm. to add names of Seizure Agents and Revenue Officers (Assessment) to ctm_full_names; b. Grant case access type to Collection Section Chief for case assignment. In the absence of Revenue District Officer. the Assistant Revenue District Officer may also grant case access type to Collection Section Chief; c. Attend weekly Implementation Assistance Team (IAT) meeting until the Revenue District Office (RDO) meets the Stop Filer Exit Criteria; d. Ensure that stop filer cases are being acted upon by Seizure Agents/Revenue Officer (Assessment); e. Explain/justify to Management if performance measure is below target level, 100% assigned cases and > 50% closed, assigned cases; and 2. The Collection Section Chief/Group Supervisors shall: a. Assign cases online to each Seizure Agent based on the listing given by the Revenue Data Center (RDC). Each Seizure Agent shall be given 50 cases per month. Depending on the available personnel, available Revenue Officers (Assessment) may be identified to assist seizure agents. Each identified Revenue Officers (Assessment) is expected to handle 25 cases per month. Priority shall be given to cases with high- revenue collection potential; b. Attend weekly Implementation Assistance Team (IAT) meeting and other related meetings till the Revenue District Office (RDO) meets the Stop Filer Exit Criteria: c. Review the final reminder letters; and d. Forward them to the Regional Office for the Regional Director's signature. 3. The Seizure Agents/Revenue Officer (Assessment) shall: a. Validate stop filer case by: i. Checking for suspended payments ii. Resolving payment suspense aICHEc iii. Ensuring that stop filer cases due to suspended payments are closed iv. Coordinating with TSS for TP registration information updates b. Perform final follow-up actions on stop filers, sixteen (16) days after generation of final reminder letters, as indicated in the Returns Compliance System (RCS) case template (See Attachment D). C. Regional Office (RO) 1. The Collection Division shall monitor the performance of various Revenue District Offices (RDO) with regard to stop filer case management through reports generated by Systems Operation Division of Information Systems Operation Service. 2. The Regional Director shall sign the final reminder letters received from RDOs. 3. The Administrative Division shall release the final reminder letters. 4. The Regional Director and the; Collection Division Chief shall attend weekly Implementation Assistance Meeting (IAT) and other related meeting. D. National Office 1. The Systems Operation Division of Information Systems Operation Service shall: a. Generate and print regular management reports on all RDOs which have rolled out Stop Filer Capability. Refer to Attachments F-1, F-2, and F-3 for the sample reports; and b. Provide copies of consolidated report to CIR, DCIRs, ACIR-Collection Service. 2. The Collection Service shall a. Monitor the performance of various regions with regard to collections obtained from stop filers through reports generated by the Systems Operations Division (SOD). V. ENTRY AND EXIT CRITERIA To ensure the smooth release of Stop Filer, entry and exit criteria have been identified. These criteria are defined conditions which need to be satisfied to start (entry) and complete (exit) the release. ENTRY CRITERIA DEFINITION METRIC 1. RDO Payment Suspense Rate # of pymts which have not passed validation < 30% (Does not include One-Time # of payment suspended + posted Tax Types) 2. No. of Adopted Taxpayers # of taxpayers who transactions belonging to = 0% other RDOs waiting to be transferred out 3. Number of Blocker Issues No. of unresolved issues which prevent the = 0% rollout from pushing through 4. % of Completion of No. of Stop Filer mandatory requirements = 100% Stop Filer Rollout which have been fully satisfied Requirements Checklist EXIT CRITERIA DEFINITION METRIC 1. Percentage of # of verified stopfiler cases > 20% Verified Cases total no. of cases created Hard Launch Entry CRITERIA DEFINITION METRIC Percentage of # of verified stopfiler cases > 20% Verified Cases total no. of cases created EXIT CRITERIA DEFINITION METRIC 1. Percentage of # of assigned stopfiler cases = 100% Assigned Cases (# of s.a.* x 50 stopfiler cases) + (# of r.o. ** x 25 stopfiler cases) 2. Percentage of # of assigned stopfiler cases > 50% Closed, Assigned Cases (# of s.a.* x 50 stopfiler cases) + (# of r.o. ** x 25 stopfiler cases) 3. % of Completion No. of Operations Evaluation requirements > 75% of Operations which have been fully satisfied Evaluation Checklist *s.a. = seizure agents ** r.o. = revenue officers (assessment) VI. REPEALING CLAUSE All other issuance and/or portions thereof inconsistent herewith are hereby repealed and amended accordingly. VII. EFFECTIVITY This order takes effect immediately. AHSaTI (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue ATTACHMENT A Sample ATTACHMENT B WEEK 1 TIMELINE Date Tasks Day 0 A case is created Day 1 RDC generates, prints and sends listing of stopfiler cases to the RDOs Day 4 From the listing. RDO decides which stopfiler cases to pursue Day 5 RDO assigns selected cases to Seizure Agents/Revenue Officer (Assessment) Day 6 RDC generates initial reminder letter for all assigned cases. Day 7 RDC sends out initial reminder letters through mail. Day 7-21 Seizure Agents/Revenue Officer (Assessment) validate stopfiler cases and suspend/close invalid cases. Day 22 RDC generates final reminder letters for all open assigned cases. Day 23 Regional Director signs final reminder letter and Administrative Division (RO) sends it out to taxpayers Day 48 If no response is received, Seizure Agents/Revenue Officer conducts ocular inspection at Taxpayers premises. Day 49 Seizure Agents/Revenue Officer (Assessment) prepare report on potential tax evaders for Supervisor's review. Day 50 Supervisor reviews/initials/submits the report on potential tax evaders to RDO Day 51 RDO undertakes proper action. Soft-launch Process Flow Attachment B-2: Sample Report on Soft Launch Verification Results MEMORANDUM DATE : May 3, 1999 TO : Delia Sarmiento Revenue District Officer, RDO 34 Paco-Pandacan-Sta. Ana FROM : Milagros Acevedo Collection Chief, RDO 34 Paco-Pandacan-Sta. Ana SUBJECT : Stop Filer Soft Launch Verification Results for week ending April 30, 1999 This memo highlights a summary of case verification in RDO 34 Paco-Pandacan-Sta. Ana. This table contains details on case creation, assignment and verification. Assigned Case No. of Cases No. of Cases No. of Cases No. of Invalid No. of Invalid Officer Created Verified Unverified Cases Cases Agent A 250 250 0 30 220 Agent B 250 250 0 28 222 Agent C 250 250 0 22 228 Agent D 250 250 0 20 230 Total 1000 1000 0 100 900 Below are remarks on the validity of cases: Reason No. of Cases Action Taken 1. Adopted Taxpayers 10 Closed the corresponding cases Transferred the taxpayers to their home RDOs 2. Excessive/Incorrect Tax Type 50 Closed the corresponding cases Ceased the excessive/incorrect tax type 3. Taxpayer no longer active 40 Closed the corresponding cases Changed the status of the taxpayer Total 100 For your information. Attachment B-3: Sample Report on Soft Launch Verification Results MEMORANDUM DATE : May 3, 1999 TO : ACIR Melchor S. Ramos Collection Service FROM : Delia Sarmiento Revenue District Officer, RDO 34 Paco-Pandacan-Sta. Ana Cc : DCIR Romeo S. Panganiban-Operations Dir. Potenciano Pineda, RR 6 Manila Ma. Rosario Charo G. Enrique, Chief-IPQS, Quality Assurance Division SUBJECT : Stop Filer Soft Launch Verification Results for the week ending April 30, 1999 This table highlights the results of case verification for RDO 34 Paco-Pandacan-Sta. Ana. No. of Cases Created 1000 No. of Cases Verified 1000 No. of cases Unverified 0 No. of Invalid Cases 100 No. of Valid Cases 900 Below are the details on invalid cases. Reason No. of Cases Action Taken 1. Adopted Taxpayers 10 Closed the corresponding cases Transferred the taxpayers to their home RDOs 2. Excessive/Incorrect Tax Type 50 Closed the corresponding cases Ceased the excessive/incorrect tax type 3. Taxpayer no longer active 40 Closed the corresponding cases Changed the status of the taxpayer Total 100 For your information. Attachment C: Sample Initial Reminder Letter BIR FORM NO. 2675 REVISED: JANUARY, 1999 REPUBLIKA NG PILIPINAS KAGAWARAN NG PANANALAPI KAWANIHAN NG RENTAS INTERNAS REVENUE DATA CENTER NO. /*RDC_CODE*/ /*RDC_DESC*/ NOTICE /*TIN*/ /*TAXPAYER_NAME*/ /*ADDRESS1*/ /*ADDRESS2*/ /*ADDRESS3*/ /*DATE*/ GENTLEMEN/SIR/MADAM: PLEASE BE REMINDED THAT YOU ARE REQUIRED TO FILE BIR FORM /*FORM_NUMBER*/ ON /*DATE_DUE*/. THE RECORDS OF THIS OFFICE SHOW THAT YOU HAVE FAILED TO FILE FOR: RETURN PERIOD: /*RETURN_PERIOD*/ TAX TYPE: /*TAX_DESC*/ IF YOU ARE EXEMPTED FROM FILING THE RETURN, OR IF YOU HAVE FILED THE RETURN. PLEASE NOTIFY THE COLLECTION SECTION OF REVENUE DISTRICT OFFICE NO. /*RDO_CODE*/./*RDO_DESC*/, AT/*RDO_TEL_NO*/, IMMEDIATELY. PRESENT/MAIL THE ACKNOWLEDGMENT RECEIPT (BELOW) TOGETHER WITH A PHOTOCOPY OF THE RETURN. IN THE EVENT THAT YOU WISH TO VERIFY THE AUTHENTICITY OF THIS LETTER, PLEASE USE THE OUTBOUND CORRESPONDENCE NUMBER (OCN) LOCATED AT THE UPPER RIGHT PORTION OF THIS LETTER IN MAKING YOUR INQUIRY. YOU ARE ADVISED TO COMPLY WITHIN TEN (10) DAYS FROM RECEIPT HEREOF. FAILURE TO FILE THE REQUIRED RETURN IS SUBJECT TO CIVIL PENALTIES AND/OR LEGAL ACTION UNDER THE NATIONAL INTERNAL REVENUE CODE OF 1997. SHOULD YOU HAVE ANY QUESTION. PLEASE SEE YOUR REVENUE DISTRICT OFFICER. COMMISSIONER OF INTERNAL REVENUE * THIS IS A SYSTEM GENERATED CORRESPONDENCE, NO SIGNATURE IS REQUIRED. ----------------------------PERFORATE HERE------------------------------ A C K N O W L E D G E M E N T R E C E I P T COLLECTION SECTION OCN./*OCN1*/ REVENUE DISTRICT NO./*RDO_CODE1*//*RDO_DESCI*/ BIR FORM/*FORM_NUMBER1*/ RETURN PERIOD:/*RETURN_PERIOD1*? TAX TYPE:/*TAX_DESCI*/ - I AM EXEMPTED FROM FILING THE REQUIRED RETURN (ATTACHED IS MY BIR EXEMPTION CERTIFICATE/BIR RULING/BIR FORM 1643/OTHERS (SPECIFY ______________). - I HAVE FILED THE REQUIRED RETURN ON _________. ATTACHED IS A PHOTOCOPY OF MY RETURN FOR YOUR PROPER EVALUATION. Attachment D: Sample RCS Case Template ACTION DESCRIPTION Days* Hours* (0 Creation of the Case 0 0) 1 RDO DECIDES IF TAXPAYER WILL BE PURSUED 4 1 2 ASSIGN CASE TO A CASE OFFICER 1 1 3 GENERATE INITIAL (STOP FILER) REMINDER LETTER 1 1 4 SEND INITIAL REMINDER LETTER THRU MAIL 1 1 5 VALIDATE CASE 0 4 6 GENERATE FINAL (STOP FILER) REMINDER LETTER 15 1 7 SEND FINAL REMINDER LETTER THRU REGISTERED MAIL 1 1 8 CONDUCT OCULAR INSPECTION ON TAXPAYER'S PREMISES 15 4 IF TAXPAYER DOES NOT RESPOND TO REMINDER LETTERS 9 DIRECT TAXPAYER TO FILE LATE RETURN TO AAB/RCO/DMT OR GIVE UPDATE FROM TAXPAYER 0 1 10 PREPARE REPORT ON POTENTIAL TAX EVADERS TO THE SUPERVISOR FOR REVIEW 5 1 11 REVIEW/INITIAL/SUBMIT THE REPORT ON POTENTIAL TAX EVADERS TO RDO (SUPERVISOR) 0 1 12 SIGN REPORT OF POTENTIAL TAX EVADERS (RDO) 0 1 13 UNDERTAKE PROPER ACTION AND DISPOSITION (RDO) 1 1 44 * Event will occur this number of Days after previous step. Attachment E: Sample Final Reminder Letter BIR FORM NO. 2676 REVISED: JUNE, 1996 REPUBLIKA NG PILIPINAS KAGAWARAN NG PANANALAPI KAWANIHAN NG RENTAS INTERNAS NATIONAL OFFICE FINAL REMINDER LETTER /*TIN*/ /*TAXPAYER_NAME*/ /*ADDRESS1*/ /*ADDRESS2*/ /*ADDRESS3*/ /*DATE*/ GENTLEMEN/SIR/MADAM: YOU ARE REQUIRED TO FILE BIR FORM /*FORM_NUMBER*/ON/*DATE_DUE*/.OUR RECORDS SHOW THAT YOU HAVE FAILED TO FILE FOR: RETURN PERIOD:/*RETURN_PERIOD*/ TAX TYPE:/*TAX_DESC*/ ON/*INITIAL_DATE*/. WE SENT YOU A REMINDER LETTER BUT YOU FAILED TO NOTIFY US IMMEDIATELY. IF YOU HAVE FILED THE RETURN, KINDLY FURNISH THE COLLECTION SECTION OF REVENUE DISTRICT OFFICE NO. /*RDO_CODE*/,/*RDO_DESC*. A PHOTOCOPY OF YOUR RETURN FOR YOUR TAX RECORDS TO BE ADJUSTED ACCORDINGLY. IN THE EVENT THAT YOU WISH TO VERIFY THE AUTHENTICITY OF THIS LETTER, PLEASE USE THE OCN LOCATED AT THE UPPER RIGHT PORTION OF THIS LETTER IN MAKING YOUR INQUIRY. YOU MAY CALL /*RDO_TEL_NO*. IN CAE OF FAILURE TO SUBMIT THE REQUIRED RETURN WITHIN TEN (10) DAYS FROM RECEIPT HEREOF, WE WILL BE CONSTRAINED TO REFER YOUR CASE TO THE PROPER INVESTIGATING OFFICE FOR APPROPRIATE ACTION WITHOUT FURTHER NOTICE AND SUBJECT YOU TO THE PENALTIES IMPOSED UNDER SECTION 254 OF THE NATIONAL INTERNAL REVENUE CODE AS FOLLOWS: "ANY PERSON REQUIRED UNDER THIS CODE OR BY REGULATIONS PROMULGATED THEREUNDER TO PAY ANY TAX, MAKE A RETURN, KEEP ANY RECORDS, OR SUPPLY CORRECT AND ACCURATE INFORMATION, WHO WILLFULLY FAILS TO PAY SUCH TAX, MAKE SUCH RETURN, KEEP SUCH RECORDS, OR TO SUPPLY CORRECT AND ACCURATE INFORMATION, OR ASaTCE WILLFULLY FAILS TO PAY SUCH TAX, MAKE SUCH RETURN, KEEP SUCH RECORDS, OR TO SUPPLY CORRECT AND ACCURATE INFORMATION, OR WITHHOLD OR REMIT TAXES WITHHELD, AT THE TIME OR TIMES REQUIRED BY LAW OR REGULATIONS, SHALL, IN ADDITION TO OTHER PENALTIES PROVIDED BY LAW, UPON CONVICTION THEREOF, BE FINED NOT LESS THAN TEN THOUSAND PESOS (P10,000) AND IMPRISONMENT OF NOT LESS THAN ONE (1) YEAR BUT NOT MORE THAN TEN (10) YEARS." VERY TRULY YOURS, REGIONAL DIRECTOR ATTACHMENT F-1 Management Report Template ATTACHMENT F-2 Management Report Template ATTACHMENT F-3 Management Report Template