Policies and Guidelines in the Conduct of Public Auction of Distrained Personal Properties, Seized/Levied Real Properties and Acquired Personal and Real Assets

May 12, 2022 REVENUE MEMORANDUM ORDER NO. 29-2022 SUBJECT : Policies and Guidelines in the Conduct of Public Auction of Distrained Personal Properties, Seized/Levied Real Properties and Acquired Personal and Real Assets TO : All Internal Revenue Officials, Employees and Others Concerned I. With the institutionalization of the Centralized Arrears Management, some of the duties and responsibilities of Seizure Agents and concerned Collection Offices have been restructured. In this connection, there is a need to formulate certain policies and procedures for the administration of the execution of summary remedies including the conduct of auction sale for distrained personal properties, seized/levied real properties and acquired personal and real assets. The updated policies and guidelines for the conduct of public auction sale for distrained, levied and acquired assets shall be provided in this memorandum order. II. This Order is issued to: 1. 2. 3. 4. III. 1. Personal Property consists of those movable properties (chattels/personality) which may include personal tangible assets ( e.g. , machineries, furniture and fixture, equipment, etc.) or intangible assets ( e.g. , shares of stocks, deposits in banks, bonds, securities, etc.). 2. Real Property refers to any land and the improvements introduced to it that are made by human efforts (buildings, acquisition of various property rights, machineries that are permanently attached to the land, and the like). 3. Distrained and Levied Properties pertains to a personal and real property that has been seized by the Bureau which will be sold through public auction to satisfy the tax liability of a delinquent taxpayer who failed to pay his/her tax obligation. 4. Acquired Assets refers to personal properties subject of an auction proceeding under Section 209 of the Tax Code, as amended, that were declared purchased in favor of the government pursuant to Section 212 of the Tax Code, as amended, as well as the real properties subject of an auction proceeding under Section 213 of the Tax Code, as amended, that were declared forfeited in favor of the government pursuant to Section 215 of the Tax Code, in partial or full satisfaction of the delinquent taxpayer's tax liabilities where, in case of real properties, the one (1)-year redemption period has already lapsed. (Note: There is no redemption for personal properties declared purchased in favor of the government). 5. Authorized Government Depository Banks (AGDB) refers to a bank where government entities are allowed by law to deposit their funds and maintain depository accounts or by way of exception, a bank authorized by the Department of Finance (DOF) and the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) to be a government depository bank. aScITE 6. Notice of Sale (NOS) refers to the public notification for the auction sale of distrained, levied or acquired assets which contains among others, the list of the assets to be sold including their respective classifications and the minimum bid/floor prices. 7. Public Auction Sale refers to a mode of sale being made in behalf of the government in which personal or real properties are being sold to multiple buyers through competitive bidding where the potential buyers are given equal chance to compete on the basis of their bid prices/offers which should be equal to or more than the set minimum bid/floor price. The properties covered by the sale are distrained personal properties, seized/levied properties and acquired personal and real properties absolutely owned by the government. 8. Redemption Period it is the one (1) year grace period, from the date of sale, given to the delinquent taxpayer-owner of a certain real property subject of a public auction proceeding within which to redeem the property. 9. Date of Sale Pertains to the date of registration of the Certificate of Sale or the Declaration of Forfeiture of Real Property in favor of the government in the Office of the Registry of Deeds or Assessor's Office for untitled properties and not to the date when the property was sold in a public auction. 10. Escrow Account refers to a bank account in an AGDB which shall be raised by a winning bidder for payment of a real property sold through public auction. In case of redemption, the delinquent taxpayer shall include payment of Escrow Account fee. 11. Independent Appraiser an unbiased professional appraiser who shall determine or shall suggest for the market value of a real property in a public auction. 12. Mega Revenue Regions refers to Revenue Region Nos. 4-Pampanga, 5-Caloocan, 6-Manila, 7A-Quezon City, 7B-East NCR, 8A-Makati, 8B-South NCR, 9A-CABAMIRO, 9B-LAQUEMAR and LTS. IV. A. 1. a. b. c. d. The Office which seized, distrained or levied the properties shall be the one to dispose the same, regardless of the geographical location of the property seized, provided the delinquent taxpayer-owner is within its jurisdiction. 2. 3. 4. a. b. One place for the posting of NOS shall be at the office of the Mayor of the City or municipality where the property is located. 5. HEITAD 6. a. b. c. d. e. f. 7. 8. 8.1 a. b. 8.2 For Seized properties: a. b. Only bids equal to or higher than the set floor price/minimum bid price shall be accepted by the concerned BAC. 9. a. b. c. Only the bid bond of the winning bidder shall be issued a corresponding Official Receipt by the Revenue Collection Officer/Special Collecting Officer (RCO/SCO). The amount of bid bonds posted by losing bidders shall be returned immediately after the public auction of a particular property. Posting or presenting a bid bond in an amount less than 10% of the floor/minimum bid price automatically disqualifies the prospective bidder from participating in the scheduled public auction. 10. The distrained and levied property may be excluded from the auction at any time on or before the day fixed for the sale when the delinquent taxpayer satisfy any of the following: a. National Internal Revenue Code (NIRC); b. NIRC; c. d. With the settlement of the tax liability, either through full payment and/or approved settlement application, the BIR shall return the distrained personal properties to the delinquent taxpayer and/or effect the lifting of the Notice of Tax Lien (NTL) Notice of Levy (NOL) on the levied real properties with the concerned Registry of Deeds and/or Assessors Office. ATICcS 11. Payment of Bid Amount by the Winning Bidder. a. If the amount of bid is less than or equal to the Outstanding Tax Liability (OTL), including the delinquency penalties and interest that has accrued thereto up to the date of sale and the expenses of sale, require the winning bidder to pay in cash or in Manager's Check payable to the Commissioner of Internal Revenue. Prepare BIR Form No. 0605 for partial or full payment of the tax due and issue the corresponding Revenue Official Receipt (ROR) for the amount to be credited to the tax liability and Official Receipt for the amount of the expenses of sale. If the amount of bid is more than the OTL, including the delinquency penalties and interest that has accrued thereto up to the date of sale and the expenses of sale, require the winning bidder to pay in cash or in Manager's Check payable to the Commissioner of Internal Revenue separately for the amount to be credited to the OTL, including the expenses of the seizure and sale, and to the delinquent taxpayer for the excess of the proceeds of the sale. If the delinquent taxpayer is willing to accept the excess of the proceeds of the sale, require him/her to issue an acknowledgement receipt for the amount he will receive. If the delinquent taxpayer refuses to accept the same, refer the case to the Legal Division/Legal Group for consignment to the proper court. The delinquent taxpayer shall be notified of this action. b. Require the winning bidder to open an escrow account in an Authorized Government Depository Bank (AGDB) within the jurisdiction of the Office which conducted the sale or has jurisdiction over the delinquent taxpayer: i. ii. iii. iv. 12. a. b. TIADCc i. > > > > > > The fifteen percent (15%) interest and escrow fee shall be refunded to the winning bidder. ii. iii. c. d. 13. 14. 15. 16. B. 1. 2. 3. 4. AIDSTE 5. a. b. c. d. e. f. 6. 7. a. b. c. Provided that an independent appraiser may only be contracted by the BIR when the FMV as determined under paragraph (a) is already beyond three years and is due for updating as required under Revenue Memorandum Order (RMO) No. 31-2019. Provided further, That for properties with improvement thereon, an independent appraiser shall be contracted by the BIR for the determination of the FMV thereof, notwithstanding the existence of an updated zonal value; or d. 8. a. b. c. Only the bid bond of the winning bidder shall be issued a corresponding Official Receipt by the AHRMD/Special Collecting Officer (SCO). The amount of bid bonds posted by the losing bidders shall be returned immediately after the public auction of a particular property. Posting or presenting a bid bond in an amount less than 10% of the floor/minimum bid price automatically disqualifies the prospective bidder from participating in the scheduled public auction. 9. 10. AaCTcI The winning bidder shall pay the full amount of his bid within two (2) working days from receipt of the Notice of Award, either in cash or manager's check to the Commissioner of Internal Revenue or the Bureau of Internal Revenue, thru the office that conducted the auction. Failure or refusal of the winning bidder to pay the full amount of the bid within the prescribed period, unless the Commissioner allows an extension of time to the winning bidder within which to fully pay the bid price, shall render the winning bidder in default and the award void. The bidder's bond shall be forfeited in favor of the government. In case of default by the winning bidder, the next highest bidder, after being duly notified, may increase his/her bid to the amount equal or higher than that of the defaulting winning bidder and shall be awarded the auctioned property. 11. a. b. i. ii. iii. In cases where both the previous owner and the current occupant participated in the auction sale, the previous owner shall be given priority over the current occupant. If the previous owner is deceased, the same privilege shall be given to the heirs. 12. Any of the following instances shall constitute sufficient ground for the cancellation of the awards and/or contracts: a. b. c. d. e. f. Acquired real assets repossessed through cancellation of award or sale shall be re-disposed of in accordance with the same policies and procedures prescribed herein. All the applicable taxes and expenses relative to the transfer of ownership, from Republic of the Philippines to the winning bidder, as well as the issuance of the necessary certificate of title and/or tax declaration shall be borne by the winning bidder. The winning bidder shall be responsible for the ejection of informal settlers and/or occupants, if any, at his own expense, on the auctioned real property and in hauling/transporting the auctioned personal properties from the auction site to the intended place of destination. V. 1. A. The BAC shall: 1. 2. 3. 4. EcTCAD 5. 6. 7. 8. 9. If the amount of bid is more than the OTL, including the delinquency penalties and interest that has accrued thereto up to the date of sale and the expenses of sale, require the winning bidder to pay in cash or in Manager's Check payable to the Commissioner of Internal Revenue separately for the amount to be credited to the OTL, including the expenses of the seizure and sale, and to the delinquent taxpayer for the excess of the proceeds of the sale; 10. If the delinquent taxpayer is willing to accept the excess of the proceeds of the sale, require him/her to issue an acknowledgement receipt for the amount he will receive; 11. 12. 13. A.1 The RCD-AMS/LTCED/ARMD-CEMS shall: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. HSAcaE 11. 12. B. The BAC shall: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. a. b. 11. A copy of the Escrow Account agreement and other pertinent documents required by the BIR relative to such agreement must be submitted by the winning bidder to the Bureau as proof of payment for the auctioned property; HESIcT 12. a. b. c. d. e.g. , real property TCT No., Area, Location); e. f. g. 13. a. b. c. d. 14. 15. 16. 17. 18. The RCD-AMS/LTCED/ARMD-CEMS shall: 1. 2. 3. C. C.1 The RCD-AMS/LTCED/ARMD-CEMS shall: 1. 2. 3. 4. 5. 6. caITAC 7. 8. 9. C.2 The RCD-AMS/LTCED/ARMD-CEMS shall: 1. 2. 3. 4. a. b. 5. 2. The RCD (For Non-Mega Revenue Regions) /FAMU (For Mega Revenue Regions) shall: 1. 2. 3. 4. 5. ICHDca 6. 7. a. b. c. d. e. 8. 9. 10. 11. 12. a. b. c. d. 13. 14. "THIS GOVERNMENT PROPERTY IS FOR SALE. Interested parties may call the BIR Office at Telephone No. _____."; 15. 16. 17. a. b. c. 18. The Internal Communication Division (ICD) shall: The Public Information and Education Division (PIED) shall: The Regional/Finance Division shall: 1. 2. TCAScE The Regional Director shall: 1. 2.Tax Code of 1997, as amended; and 3. Chairman - Members - Chief, Collection Division Chief, Administrative Division Chief, Finance Division The Assistant Commissioner, Collection Service shall: 1. 2.Tax Code of 1997, as amended. The Commissioner of Internal Revenue shall: The Regional Bids and Awards Committee-Acquired Assets shall: 1. 2. 3. 4. a. b. c. i. ii. iii. iv. v. vi. vii. viii. ix. cTDaEH 5. 6. 7. 8. 9. 10. 11. The National Bids and Awards Committee-Acquired Assets shall: 1. 2. 3. 4. a. b. c. i. ii. iii. iv. v. vi. vii. cSaATC viii. ix. 5. 6. 7. 8. 9. 10. 11. The Regional Director shall: The AMS shall: 1. 2. The FAMU shall: 1. 2. 3. 4. 5. 6. 7. The ACIR-Collection Service, Deputy Commissioners-Operations Group shall: 1. 2. The Commissioner of Internal Revenue shall: cHDAIS The AHRMD shall: 1. 2. 3. 4. 5. 6. 7. The Regional Collection Division shall: 1. 2. The General Services Division shall: 1. 2. The RAD shall: The Procurement Division shall: VI. All revenue issuances or portion thereof, which are inconsistent herewith are hereby amended, modified or repealed accordingly. VII. This Order shall take effect immediately. CAESAR R. DULAY Commissioner of Internal Revenue By: (SGD.) MARISSA O. CABREROS Deputy Commissioner Legal Group Officer-in-Charge ANNEX 1 Notice of Sale (Distrained and Levied Properties) TO WHOM IT MAY CONCERN: Pursuant to the provisions of Section 209 and/or 213 of the National Internal Revenue Code of 1997, as amended, the undersigned will sell at public auction for cash to the highest bidder at _________________________________________________________________________________________________________________________________________________________________________________________________________ on the _______ day of _________________, 20___, beginning at ________o'clock ____ AM/PM of said day, the following distrained and/or levied properties of ________________ with address at _____________________________________, as described below in satisfaction of his/its internal revenue taxes and penalties amounting to ________________________________________ (P______________) due the Republic of the Philippines per Assessment Notice No(s). __________________________ dated _________________, plus all related expenses and costs of sales. ISHCcT DESCRIPTION OF PERSONAL/REAL PROPERTY(IES) (If more space is needed, use reverse side) ___________________________________________________________________________________________________________________________________________________________________________________________________________________________ The Bureau of Internal Revenue reserves the right to reject any or all bids received. Done in the City/Municipality of _______________, Province of _____________, Philippines, this _______ day of _________________, 20______. COMMISSIONER OF INTERNAL REVENUE By: ______________________________________ Regional Director ANNEX 2 Release of Distrained Property Date _______________ Mr. Juan/Ms. Juana de la Cruz _____________________ _____________________ Dear Sir/Madam: The following property/ies which was/were seized by the Bureau of Internal Revenue on _____________________, 20___, in connection with the tax liability of _______________________________________________________________________ of _____________________________________________________________________ is/are hereby returned to __________________________________________________. The property/ies in question is/are listed below: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ The property/ies is/are hereby returned on __________________________, 20____. COMMISSIONER OF INTERNAL REVENUE By: ____________________________________ Authorized Revenue Officer (Signature over Printed Name) ____________________________________ (Position/Title) I, ______________________________________________, do hereby acknowledge receipt of the above listed property/ies. ____________________________________ Taxpayer/Representative (Signature over Printed Name) ANNEX 3 Certificate of Sale of Real Property to Satisfy Tax Liability Date _______________ TO WHOM IT MAY CONCERN: This is to certify that pursuant to Section 213 of the National Internal Revenue Code of 1997, as amended, under the second paragraph thereof, the property described below which was owned or titled in the name of ________________________________________ (Delinquent Taxpayer) , of legal age and resident of ____________________________________________________________________________________________ was sold to ___________________________________ (Purchaser) , who is the highest bidder to satisfy the tax liability of the former, in the amount of ___________________________________________ (P__________________) on ________________________ (Date) . This property is subject to redemption by the taxpayer anytime within one (1) year from the date of registration of this Certificate with the Register of Deeds/Assessor's Office. During the redemption period, the delinquent taxpayer is not deprived of the possession of said property and to receive its fruits or income. However, the buyer is entitled to a fifteen (15%) percent interest per annum of the purchase price should the taxpayer redeem his/her property from date of registration of this instrument to the date of redemption pursuant to Section 214 of the same Tax Code. CAacTH In case of failure of the taxpayer to redeem his/her property within the year from date of registration, the Title of this property shall be transferred to the buyer. DESCRIPTION OF THE PROPERTY SOLD ___________________________________________________________________________________________________________________________________________________________________________________________________________________________ COMMISSIONER OF INTERNAL REVENUE By: ____________________________________ Authorized Internal Revenue Officer (Signature over Printed Name) ____________________________________ (Position/Title) ANNEX 300-1.55 Monthly Report on Properties Redeemed within the Redemption Period ANNEX 4 Monthly Report on Properties Redeemed within the Redemption Period ANNEX 5 Notice of Sale (For Acquired Assets) TO WHOM IT MAY CONCERN: Pursuant to the provisions of Section 216 of the National Internal Revenue Code of 1997, as amended, the undersigned will sell at public auction for cash or manager's check to the highest bidder at the BIR Covered Court, Bureau of Internal Revenue, National Office, Agham Road, Diliman, Quezon City on _______________________, beginning at ___________ of said days, the following acquired assets of the Bureau of Internal Revenue in the name of the Republic of the Philippines , enumerated below: ITEM No. TITLE TYPE AND NO. AREA (sqm) CLASSIFICATION LOCATION MINIMUM BID PRICE 1. 2. 3. The Bureau of Internal Revenue, thru its Bids and Awards Committee-Acquired Assets (BAC-AA), reserves the right to reject any or all bids received, waive any formalities or defects therein, and to accept such bids as may be advantageous to the government, or call-off the bidding prior to the acceptance of the bids and call for a new bid under amended rules. The auction shall be done on an "As Is Where Is" and on a per title basis. Done in the City/Municipality of ___________________, Province of ____________, Philippines, this ________ day of ___________________, 20____. CAESAR R. DULAY Commissioner of Internal Revenue