Seminar on Investigation Techniques and Report Making

June 21, 1977 REVENUE MEMORANDUM ORDER NO. 26-77 SUBJECT : Seminar on Investigation Techniques and Report Making TO : All Internal Revenue Officers and Others Concerned In preparation for the investigation of 1976 income tax returns, you are hereby informed that a seminar will be conducted on investigation techniques and report making. I. Purpose 1. Acquaint the examiners with the general techniques of investigation and report making to insure that the investigations conducted are proper and thorough. cdta 2. Provide the examiners with the uniform concept of the elements of a quality audit. 3. Allow them to proceed on each examination with a clear understanding of how to conduct the audit of returns to best carry out the mission of the Bureau of Internal Revenue which is the assessment and collection of internal revenue taxes due from all classes of taxpayers. 4. Orient the examiners towards (a) quality in examination; (b) competence and integrity in public contact; and (c) professional application of accounting and tax laws. II. Period of the Seminar July 5 to July 16, including Saturdays III. Place Where the Seminar Should be Conducted With the exception of the divisions in the Central Office and Revenue Regions No. 4A and 4B, all seminars shall be held in the station town of the regional office. Regional Directors should therefore instruct all examiners in the different revenue districts to come to the regional office for the seminar beginning July 5, 1977. IV. Personnel Required to Attend the Seminar All revenue examiners and group supervisors are required to take the seminar. Chiefs of section in the Central Office and Revenue District Officers and Assistant Revenue District Officers are not required to take the seminar. However, Revenue District Officers, Assistant Revenue District Officers and Group Supervisors are required to attend the Saturday class on Techniques of Supervision. The Revenue District Officer and the Assistant Revenue District Officer may attend the seminar on a voluntary basis. In the case of examiners who are lawyers and have no knowledge of accounting, they are also required to attend a special class on Saturday on Principles of Bookkeeping. V. Subjects Subjects to be taken up in the investigation are as follows: 1. Accounting Methods, Records and Bookkeeping Regulations 2. (a) Purpose and Standards of Examination (b) Preliminary Approach to Examination 3. Examination of Non-Business Returns (a) 17.01B (b) Report Making 4. General and Detailed Techniques in the Examination of Income and Business Taxes of Individuals Engaged in Business (a) Nominal Accounts (b) Real Accounts (c) Inventories (d) Manufacturing Statement (e) Withholding Tax on Wages (f) Report Making 5. General and Detailed Techniques in the Examination of Income and Business Taxes of Corporations and Partnerships (a) Nominal Accounts (b) Real Accounts (c) Inventories (d) Manufacturing Statement (e) Withholding Tax on Wages (f) Report Making 6. Advance Sales Tax and Compensating Tax (a) Investigation Techniques (b) Report Making 7. Transfer Taxes (a) Investigation Techniques (b) Report Making 8. Indication to Fraud Closing Interview 9. New PD's including highlights of new tax code and implementing regulations 10. Public and Human Relations Saturdays (July 9 and 16 of 1/2 day each) 1st Sat. July 9 For Lawyers with no accounting units Principles of Bookkeeping For RDO's and Supervisors Analysis of Financial Statements 2nd Sat. July 16 For lawyers with no accounting units Principles of Bookkeeping For RDO's and Supervisors Techniques of Supervision GENERAL: After the end of each subject matter, there should be a workshop of not less than 1 hours. Workshop will be standardized in accordance with the lecture. VI. Seminar Materials The Handbook on Audit Procedures and Techniques promulgated as Revenue Memorandum Order No. 25-65, dated July 1, 1965 shall be used as the text for the lectures in the seminar together with the additional issuances that may be released from the Central Office. The handbook is issued to every examiner. For examiner who do not have the handbook, they can requisition a copy from the Property Division of the Central Office. The new presidential decrees (PD 1154, 1155, 1156, 1157, and 1158) will also be distributed as part of the seminar materials. VII. The Classes Organized for the Seminars No. Units Place 1 Region No. 1 Baguio City 2 Region No. 2 Tuguegarao, Cagayan 3 Region No. 3-A San Fernando, Pampanga 4 Region No. 3-B Valenzuela, Bulacan 5 Region No. 4-C San Pablo City 6 Region No. 5 Legaspi City 7 Region No. 6-A Iloilo City 8 Region No. 6-8 Bacolod City 9 Region No. 7 Cebu City 10 Region No. 8 Tacloban City 11 Region No. 9 Zamboanga City 12 Region No. 10-A Cagayan de Oro City 13 Region No. 10-B Butuan City 14 Region No. 11-A Cotabato City 15 Region No. 11-B Davao City 16 Revenue District No. 22 Tondo-San Nicolas 17 Revenue District No. 23 Binondo-Sta. Cruz 18 Revenue District No. 24 Quiapo-Sampaloc 19 Revenue District No. 25 South Manila 20 Revenue District No. 28 and 29 Malabon-Navotas-Caloocan 21 Revenue District No. 30 Quezon City 22 Revenue District Nos. 31 and 35 Mandaluyong-San Juan & Pasig 23 Revenue District No. 32 Makati 24 Revenue District Nos. 33- 34-36 Pasay, Paraaque & Cavite 25 Assessment Branch Manila 26 Assessment Branch Quezon City 27 Agriculture & Financing Divisions 28 Manufacturing & Services Divisions 29 Tax Fraud & Intelligence Divisions 30 Assessment Service, Investment Incentives Division, International Operations Division and Other Central Office Units Since the number of examiners in Classes No. 16 to 30 are too many for one continuous class, the seminars in the said classes will be on a staggered basis and will be extended up to July 30. VIII. Lecturers In view of the lack of lecturers from the Central Office to be sent to the 30 classes, Regional Directors are hereby instructed to communicate to this Office their recommendation for lecturers in the region on the different subjects of the seminar except the subjects of Indications of Fraud, Human and Public Relations and Techniques of Supervision. cd IX. Other Instructions 1. Circulars, orders, rulings, digests, and other materials which may be used as reference materials by examiners for the lectures and for their study which are available in the regional office should be mimeographed and distributed to all participants. cdt 2. All queries regarding the seminar, request for clarification, answers to problems or questions in the conduct of the seminar shall be communicated immediately to the Central Office. Strict compliance with the requirements of this memorandum order is hereby enjoined. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8