Task Force to gather information and statistical data on certain industries for use of the Congressional Sub-Committee Hearing on Ways and Means in Aid of Legislation

August 2, 2000 REVENUE MEMORANDUM ORDER NO. 25-00 SUBJECT : Task Force to Gather Information and Statistical Data on Certain Industries for Use of the Congressional Sub-Committee Hearing on Ways and Means in Aid of Legislation TO : All Revenue Officers Concerned I. OBJECTIVES 1. To gather information and statistical data on identified industries from various government agencies and associations of business and industry for use of the Congressional Sub-Committee Hearing on Ways and Means in Aid of Legislation. 2. To study, analyze, evaluate data gathered to determine the standard gross profit rate of the particular industry. 3. To determine level of compliance to various tax laws applicable to each industry. 4. To determine the tax potentials of these industries as a possible source of additional revenue to augment the collection effort of the Bureau of Internal Revenue. SCHTac II. GUIDELINES 1. Industries Covered: The project shall cover companies falling under the following industries: a. Telecommunication b. Pre-paid card providers c. Manufacturer of semi-conductor devices and other electronic components d. Banks, financing and pre-need companies e. Airlines and shipping 2. Identification of taxpayers under the different industries above mentioned. ESTcIA a. Request a list of large and non-large taxpayers belonging to the above-mentioned industries from LT Programs Division and ISOS DC respectively. b. Identify the corresponding revenue offices having investigative jurisdiction over these companies. 3. Determine the relevant information needed. a. Identify the pertinent data or information to be captured from the tax/information returns. For uniformity and proper appreciation of the data of information gathered, a matrix on the information obtained should be prepared. b. Request from the LT Document Processing and Quality Control Division and the corresponding Revenue District Offices to provide all the relevant tax data or copies of the tax/information returns of these identified companies for taxable year 1999. For this purpose, a Letter Request duly signed by the Commissioner of Internal Revenue should be prepared and served to the identified revenue offices. c. Encode the information obtained using the matrix developed for this purpose. 4. Analyze and evaluate the information. The analysis should at least cover the following points: a. Gross profit ratio of each company and the standard gross profit ratio for the particular industry b. Compliance to applicable tax laws of each company and of the industry as a whole c. Industry issues d. Possible areas with tax potential 5. Prepare report and recommendation. Within 15 days from date of completion, each team shall submit to the over-all coordinator a report and recommendation which shall include but is not limited to the following: a. A matrix of the information/data gathered from the tax/information returns of the different companies under the identified industries. cHECAS b. List of companies to be audited/investigated c. Procedures and further actions to be adopted 6. Over-all report and recommendation. Within 15 days from receipt of all reports and recommendation from the Teams, the over-all coordinator shall prepare the reports, recommendations and other documents required by the Congressional Sub-Committee Hearing on Ways and Means in Aid of Legislation for approval by the Commissioner of Internal Revenue. The Team Heads and members of the Task Force will informally meet every Tuesday to discuss the progress of their work and to identify problem areas encountered in the performance of their assigned tasks. For proper monitoring of the activities undertaken by the Task Force, a written progress report however, will be submitted to their over-all coordinator every two (2) weeks. This Order takes effect immediately. (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue