Revising the Policies, Guidelines and Procedures in the Processing of Application for Bank Accreditation; Renewal of Accreditation and Disaccreditation of Authorized Agent Banks (AABs); AABs Merger/Buy-Out; Change of Names and/or Addresses; Monitoring of Performance and Evaluation of AABs; and Imposition of Penalties on AABs' Violations and Settlement of Unremitted Collection

November 12, 2001 REVENUE MEMORANDUM ORDER NO. 30-01 SUBJECT : Revising the Policies, Guidelines and Procedures in the Processing of Application for Bank Accreditation; Renewal of Accreditation and Disaccreditation of Authorized Agent Banks (AABs); AABs Merger/Buy-Out; Change of Names and/or Addresses; Monitoring of Performance and Evaluation of AABs; and Imposition of Penalties on AABs' Violations and Settlement of Unremitted Collection TO : All BIR Officials, Authorized Agent Banks and Others Concerned I. OBJECTIVES. A. To ensure that all Banks collecting internal revenue taxes are properly accredited and authorized by the Bureau of Internal Revenue (BIR); B. To prescribe the policies, guidelines, rules and regulations in Banks' initial accreditation and re-accreditation, cancellation of AABs accreditation, AABs merger/buy-out and change of names and/or addresses of AABs; C. To provide a mechanism in monitoring and evaluating the performance of AABs for purposes of accreditation, suspension/cancellation of said accreditation, re-accreditation and imposition of penalties for any violation of the terms and conditions of the Memorandum of Agreement (MOA) between the BIR and AABs; D. To institute an effective and efficient internal control system that will ensure that collections of internal revenue through the Banking System are reported on time. II. GENERAL POLICIES AND GUIDELINES A. A Bank Accreditation Committee (BAC) composed of: the Assistant Commissioner (ACIR) Collection Service (CS) as Chairman; the HREAs, Legal Service (LS), Information Systems Operations Service (ISOS), Information Systems Development Service (ISDS); Head, Revenue Data Center (RDC) Quezon City; Representatives from the Office of the Commissioner of Internal Revenue (OCIR); Office of the Deputy Commissioner of Internal Revenue-Operations Group (ODCIR-OG); as members, shall be created. Its functions shall be to evaluate application for accreditation, renewal of accreditation, disaccreditation, request for waiver of penalties of Banks and to make its recommendations relative thereto to the Commissioner of Internal Revenue (CIR)/Deputy Commissioner of Internal Revenue (DCIR)-Operations Group/Management Committee (MANCOM); B. A BAC Secretariat composed of the Chief, Collection Programs Division (CPD) as Head, the Assistant Chief of the Revenue Accounting Division (RAD), representatives from the Information Planning & Quality Service (IPQS), LS, CPD, and RAD as members, shall be created. Its functions shall be to schedule BAC meetings, take and prepare minutes of the meetings, prepare notice of meetings, coordinate and liaise with AABs relative to the meetings, ensure the proper conduct of the meetings, take care of physical arrangement and provide technical and logistics support to BAC. C. Penalties for violations as defined and provided for in Revenue Regulations (RR) Nos. 15-94, 4-97, 6-98 and 19-2001, this Revenue Memorandum Order (RMO) and the MOAs between the AABs and the BIR, receptively, shall strictly be enforced; D. Penalties, surcharges and interests due on delayed collections, and/or delayed or erroneous reports as well as procedural errors committed by AABs may be waived by the CIR, upon the recommendation of the BAC. Provided that the delay in the remittance of collections and/or delay in the submission of reports, and/or submission of erroneous reports as well as procedural errors committed are caused by civil disturbance or fortuitous events such as typhoons, floods, fires, earthquakes, labor disputes or strikes. Provided, further, that if the same is caused by other reasons which the BAC deems meritorious, the waiver of penalties/sanctions for such meritorious cases (other than those caused by civil disturbance or fortuitous events) shall not be more than sixty percent (60%) of the total amount of penalties imposed. Provided, finally, that should the BAC, after its evaluation, recommend for a waiver of penalties by more than sixty percent (60%), such request for waiver, together with the BAC's recommendation, shall be elevated to the MANCOM for confirmation before the same is submitted to the CIR for his approval. E. Penalties, surcharges and interests for violations committed by an AAB (Head Office or branches) shall be demanded by the BIR National Office (CPD and RAD) from the AAB's Head Office and payment shall be made by the Head Office of AABs to the BIR National Office; F. The AABs shall be required to pay in full their outstanding liabilities if the offer of compromise for penalties, surcharges and/or interests as approved by the CIR is not paid within the prescribed period. Such failure shall constitute a ground for the revocation of their accreditation; G. The accreditation of the AAB Head Office (AAB-HO) does not automatically result in the accreditation of its branches unless otherwise included in the application for accreditation. AAB-HO should apply for the accreditation of its branches not included in the initial application for accreditation; H. The disaccreditation of the AAB-HO automatically results in the cancellation of the accreditation of all its branches while the disaccreditation of any or all of its branches does not automatically cancel the accreditation of the AAB-HO. The AAB-HO may, at any time, apply for the cancellation of its or any of its branch(es) accreditation upon written notification to the CIR; I. The CIR, upon the recommendation of the BAC, shall, at any time, suspend/cancel an AAB accreditation thru an official notification to the concerned AAB in cases where the interest of the government is prejudiced; J. The Bangko Sentral ng Pilipinas (BSP) through its Accounting Department shall, upon the advise of the BIR, credit the Demand Deposit Account (DDA) of the AAB for over-remittance of internal revenue collection to the BIR and debit the DDA of the AAB for the amount of unremitted collections and unpaid penalties; K. AAB's accreditation shall be effective from the date of signing of the Memorandum of Agreement (MOA) by the CIR until such time that it is terminated by both parties, or by the AAB subject to the approval of the BIR, or by the BIR in case of violation of any terms and conditions stated in the MOA, or for any reasonable cause, with thirty (30) days advance notice; L. Additional terms and conditions may be entered into between the BIR and the AAB servicing taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) which shall be embodied in a supplemental MOA to be executed by both parties; M. Any AAB whose accreditation is cancelled may apply for re-accreditation after six (6) months from the date of the cancellation of its accreditation. The procedures for re-accreditation shall be done in the same manner provided under Section III.A hereof; N. Only those Banks which meet the following criteria for accreditation shall be authorized to collect internal revenue taxes: The BANK is a government bank, a commercial bank or a universal bank; The BANK should be able to meet the financial ratios required by the BSP and maintain these ratios during the term of the agreement; The BANK should have the infrastructure required by the BIR from its AABs; The BANK shall have been in operation for a minimum of three (3) years. O. The AAB shall maintain adequate balance in its DDA with the BSP, which may be required to be maintained, on a per bank branch basis, to take care of its daily remittance of collection; and P. The AAB shall inform the BIR of any approved plan to merge with/buy out other Banks/AABs or sell/fold up, plan to change AAB's name or address within thirty (30) days of such approval; III. DETAILED PROCEDURES. A. Accreditation Procedures: 1. The BANK HEAD OFFICE shall 1.1 File an application for accreditation to collect internal revenue taxes with the CIR, Attention: The Chief, CPD. The following documents should be attached to the application: 1.1.1 Proof of being a government, commercial or universal bank; 1.1.2 Certification from the BSP that the BANK has complied with all its statutory financial ratios; 1.1.3 Certificate of compliance with the requirement of BSP Circular No. 13, series of 1994, item (b) thereof, which provides that the BANK should have profitable operations for the immediately preceding three (3) years; 1.1.4 Annual reports for the last three (3) preceding years; 1.1.5 Latest copy of the BANK's Consolidated Statement of Condition under DCB I/II, Form No. 2A.1/2, Revised 1996, together with all the supporting schedules which were duly acknowledged by the BSP; 1.1.6. Names of the members of the Board of Directors and bank officers for the current year; 1.1.7 Inventory and technical specifications of computer hardware and software resources (Head Office and branches), 1.1.8 List of branches to be accredited with complete addresses; 1.1.9 Facsimile of validation machines and stamps to be used in collection of internal revenue taxes: RECEIVED (indicating the name of Bank, Bank Code, RDO Code, Teller Code, Teller initial, Date) INCREMENT NOT PAID FILED LATE RECEIVED AFTER CLEARING TIME 1.2 Upon receipt of the approval for accreditation, inform all concerned branches of the approval of the accreditation and distribute to them their respective Bank Code and RDO Code(s) Assignments and copy of signed MOA; 1.3 Inform and update all authorized branches on all BSP, Bureau of Treasury (BTR) and BIR issuances and bank bulletins relative to collection of internal revenue taxes through the Banking System; 1.4 Direct all authorized branches, branch officers and employees involved in tax collections to abide by the provisions of the MOAs between the BIR and the AABs and all other pertinent revenue laws, rules, regulations, memorandum orders and Bank Bulletins issued by the BSP, BTR and the BIR on this subject; 1.5 Require all authorized branch officers and employees involved in tax collection to attend the BIR sponsored seminars on rules, regulations, memorandum orders and bank bulletins on the system of collection of internal revenue taxes through Banks and trainings on BIR Collection and Bank Reconciliation System (CBRS), Electronic Data Transmission System (EDTS) and Limited Bank Data Entry System (LBDES); 1.6 Maintain adequate balance in its DDA with the BSP, which may be required to be maintained, on a per bank branch basis, to take care of its daily remittances of internal revenue tax collections. 2. The AAB-HO and Branch shall 2.1 Attend the BIR sponsored seminars on rules, regulations, memorandum orders and bank bulletins on the system of collection of internal revenue taxes through Banks and trainings on BIR CBRS, EDTS, and LBDES; 2.2 Install and use the software on collection systems provided by the BIR; 2.3 Assign only personnel who have satisfactorily undertaken the required trainings on BIR-CBRS, EDTS and LBDES; 2.4 Store and display BIR Forms, i.e., Tax Returns, Payment Orders and other necessary documents for the use of the taxpayers. Prominently display materials that will assist taxpayers in accomplishing tax returns/payment orders; 2.5 Maintain adequate computer facilities and communication capabilities that can comply with the BIR reporting requirement thru Electronic Data Transmission; 2.6 Undertake to install and implement necessary security/control measures as deterrent against and/or ensure early detection of fraud; 2.7 Open bank operations two (2) Saturdays prior to April 15 of every year and extend banking hours from 3:00 PM to 5:00 PM daily from April 1 to income tax payment deadline; 2.8 Keep confidential all information shown in the returns, reports and other documents received as provided for under Section 270 of the Tax Code of 1997; 2.9 Respond to BIR correspondence within fifteen (15) working days from receipt thereof. 3. The CPD shall 3.1 Receive from the Banks the application for accreditation together with its supporting documents as enumerated in A.1.1 of this Order; 3.2 Evaluate the documents received from the Banks using the following criteria: 3.2.1.1 Commercial/Universal/Government Bank 3.2.1.2 Minimum three (3) years operations 3.2.1.3 Compliance with BSP financial ratio 3.2.1.4 Compliance with BSP Circular No. 13, item (b) 3.2.1.5 Computer facilities/infrastructure 3.2.1.6 Number of branches in every BIR district/extension offices 3.3 Present the evaluation results to BAC for decision/recommendation to CIR/MANCOM; 3.4 Based on the recommendation of BAC, prepare communication to the BANK for the signature of the CIR, approving/denying the application; 3.5 Disseminate/release the signed communication to the BANK; 3.6 Assign Bank Codes and RDO Codes Assignment and communicate the same to the AABs/concerned BIR offices; 3.7 Encode and activate in the ITS the assigned Bank/RDO Codes; 3.8 Inform officers of the AABs through the Bankers Association of the Philippines (BAP) and individual bank of advices/updates/bulletins/issuances, etc., not later than forty-eight (48) hours from receipt of information from the CIR or his duly authorized representative; 3.9 Advise the Bankers Association of the Philippines (BAP) and its members of RMOs and system amendments affecting the collection system within two (2) days from the signing of the RMO or approval of the system amendments. Implementation of procedural concerns and amendments affecting technology or system changes shall take effect not later than thirty (30) days from the availability of the new BIR technology or system; 3.10 Respond formally to queries raised by AABs within fifteen (15) days from receipt of the request. Clarifications affecting all AABs shall be disseminated to the AAB membership thru BAP; 3.11 Prepare communication to AAB relative to the action taken on its protest/request for reconsideration on denial of application for accreditation/revocation of accreditation. 4. The BAC shall 4.1 Discuss/review the Evaluation Report submitted by CPD; 4.2 Recommend approval/disapproval of application to the CIR/MANCOM; and 4.3 Act on protest/request for reconsideration of AABs. 5. The ACIR-Collection Service shall 5.1 Review and initial communications on approval/disapproval of the BANK's application for accreditation and/or protest/request for reconsideration by AABs 6. The CIRO/DCIR-Operations Group/MANCOM shall 6.1 Approve/disapprove BAC's recommendation on accreditation of AABs; and 6.2 Approve/disapprove BAC's recommendation on protest/request for reconsideration of AABs. 7. The ISDS/Training Management Division (TMD) shall 7.1 Conduct training of AAB personnel on the technical aspects of the System i.e., the LBDES and EDTS in coordination with CPD, Training Delivery Division and RDC. 8. The Revenue District Offices (RDOs) shall 8.1 Provide the AABs with ample supply of tax returns and other pertinent documents. B. Disaccreditation Procedures: The accreditation of AAB can be revoked through the voluntary withdrawal from the internal revenue tax collection system by the AAB itself with the approval of the BIR or through the initiative of the BIR. The BIR-BAC can initiate the disaccreditation of AAB under the following circumstances: a. Upon the instruction of the CIR if the interest of the government so requires, b. RDC/RDO recommendation for being inactive in collecting internal revenue taxes for a period of six (6) consecutive months; c. RAD recommendation for non-reporting/non-remittance/delayed remittance of internal revenue tax collections; and d. CPD recommendation based on AAB's performance. The detailed procedure shall be as follows: 1. The AAB Head Office shall 1.1 Communicate to the CIR, Attention: The Chief, Collection Programs Division the intention of any branch or of the entire Bank to withdraw from the BIR Collection System; 1.2 Receive from the BIR the communication accepting its withdrawal from the BIR Collection System, revoking its authority to collect internal revenue taxes; 1.3 Direct the concerned branch(es) to stop from collecting internal revenue taxes immediately upon receipt of the communication on its disaccreditation. This applies whether the disaccreditation is at the instance of the AAB itself or through the initiative of the BIR; 1.4 Settle all collections and pay all penalties of the entire bank/concerned branch(es); 1.5 Submit any outstanding reportorial obligations of the BANK/concerned branch(es); 1.6 Make available the records pertaining to collection activities of the BANK/concerned branch(es) for verification of the BIR upon request. 2. The CPD shall 2.1 Receive the letter of AAB withdrawing from the BIR Collection System; 2.2 Prepare communication to AAB, for signature of the CIR, accepting the withdrawal from the BIR collection system and demanding for the payment of penalties and submission of remaining reports; 2.3 Receive instruction/recommendation to disaccredit the AAB; 2.4 Prepare all pertinent communications/documents based on existing policies; 2.5 Cancel in the ITS the Bank Code(s) and RDO Code(s) of the AABs whose accreditation were revoked; 2.6 Compute any remaining penalties on procedural errors/late batches/late collection reports based on the reports submitted by the concerned RDOs/RDCs; 2.7 Temporarily activate the Bank Code(s) and RDO Code(s) Assignment of disaccredited AABs for purposes of uploading collections/remittances in response to the request from RDCs/RDOs/RAD; 2.8 Inform the concerned RDCs/RDOs/RAD of the temporary activation of the Bank Code(s) and RDO Code(s) Assignment and the date the same will be cancelled in the ITS; and 2.9 Conduct field verification of the records of AAB relative to collection of internal revenue taxes in coordination with RDOs. 3. The concerned RDCs/RDOs shall 3.1 Communicate to CPD its recommendation to disaccredit certain AAB(s) for being inactive in collecting internal revenue taxes for six (6) consecutive months; 3.2 Forward all unsubmitted exception reports on procedural errors, late batches/collection reports and Bank Performance Statistics to CPD; and 3.3 Communicate to CPD to temporarily activate the Bank Code(s) and RDO Code(s) previously cancelled in the ITS for purposes of uploading any remaining collections. 4. The RAD shall 4.1 Communicate to CPD through the ACIR Collection Service its recommendation to disaccredit certain AAB(s) for failure to remit internal revenue taxes; 4.2 Compute the penalties on late reporting and remittance of collections by AAB whose accreditation was revoked; 4.3 Send final demand for payment of the outstanding penalties based on item 4.2 above; 4.4 Issue Payment Order to the concerned AAB for Payment of outstanding penalties on late reporting and remittance of collections; 4.5 Prepare communication to BSP to debit the DDA of the concerned AAB for any unremitted collections, outstanding penalties on late reporting and remittance of collections upon failure to pay within four (4) months after the demand; and 4.6 Communicate to CPD to temporarily activate the Bank Code(s) and RDO Code(s) previously cancelled in the ITS for purposes of uploading any remaining collections. 5. The ACIR-Collection Service shall 5.1 Review and initial the communication to AAB accepting withdrawal from the System and demanding for the payment of penalties and communication to BSP to debit the DDA of the concerned AAB for any unremitted collections, outstanding penalties on late reporting and remittance of collections upon failure to pay within four (4) months after the demand; 5.2 Review and sign the communication to RDCs/RDO requiring the submission of any unreported collections, exception report on procedural errors and report on late batches/reports; and 5.3 Review and sign communication to the Prosecution Division through the Legal Service for the institution of judicial action against an AAB, which failed to pay penalties as well as remit collections for violation of the provisions of the MOA. 6. The Prosecution Division shall 6.1 Act on the recommendation of the ACIR-Collection Service for the filing of charges against erring AABs in accordance with the provision of the MOA. 7. The CIR/DCIR-Operations Group/MANCOM shall 7.1 Issue communication/instruction to CPD to revoke the accreditation of certain AAB(s) in the interest of the service; 7.2 Approve the withdrawal from the BIR Collection System of the concerned AAB(s); and 7.3 Sign communication on the revocation of the accreditation of AAB(s) from the System; and 7.4 Sign communication to AAB(s) demanding payment of penalties and settlement of unremmitted collection. C. Merger/Buy-Out Procedures: 1. The AABs shall 1.1 Notify the BIR of the impending merger/buy-out of AAB(s), through the Chief, CPD. The merger/buy-out plan, and other relevant documents should be attached to the notification; 1.2 Attend meeting with BIR-BAC and discuss issues confronting the impending merger/buy-out; 1.3 Send technical representative to the Technical Group that will be created during the AAB-BAC meeting to assist the AAB during the merger/buy-out and transition periods, whenever necessary; 1.4 Undertake to carry out the recommendation/resolution by the Technical Group; 1.5 Stop collecting taxes, submit all outstanding reportorial obligations, settle all unremitted collections and pay all unpaid penalties on delayed reporting of CRDC & remittance of collections/late batches/procedural errors upon receipt of relevant communications from the BIR; and 1.6 The New/Surviving AABs shall provide BIR through CPD with the names and addresses of the new/surviving AABs and facsimiles of rubber stamps enumerated in III.A.1.1.9 of this Order. 2. The CPD shall 2.1 Receive AAB notification of impending merger/buy-out; 2.2 Set meeting of AAB(s) with BIR-BAC to discuss issues and resolution brought about by the impending merger; 2.3 Prepare communications, affecting CPD functions, to carry out the agreement/resolution agreed upon by the Technical Group; 2.4 Cancel AAB Bank and RDO Codes in the ITS of the absorbed bank; 2.5 Assign and communicate the new Bank/RDO Codes to the surviving/new AAB, whenever required; and 2.6 Prepare communication relative to unpaid penalties on procedural errors and late batches/reports to AABs, RDCs & RDOs. 3. The RAD shall 3.1 Prepare communication relative to unpaid penalties on delayed reporting of CRDC and remittance of collections. 4. The BAC shall 4.1 Convene and discuss with the AAB(s) concerns/issues re: impending AAB merger/buy-out; 4.2 Create a Technical Group, composed of BIR and AAB representatives to address issues on the impending merger/buy out; and 4.3 Recommend to the CIR/DCIR-Operations Group the approval/disapproval of the actions/recommendation of the Technical Group. 5. The ACIR-Collection Service shall 5.1 Review and sign/initial communications prepared by CPD for his/the CIR/DCIR-Operations Group signature/approval; 6. The CIR/DCIR-Operations Group/MANCOM shall 6.1 Approve/disapprove communications relative to the merger/buy-out. D. Procedures Relative to the Change of AAB's Name(s)/Address(es): 1. The AAB shall 1.1 Communicate to the BIR through the Chief, CPD any change of address/name of AAB(s); 1.2 Register with the new RDO if the change in address resulted in the change of RDO; and 1.3 Update records with LTS, if applicable. 2. The CPD shall 2.1 Receive AAB communication relative to change of name(s)/address(es); 2.2 Update AABs addresses/names in the ITS if there is no change in RDO Code Assignment. Otherwise, coordinate with concerned AAB and assign new Bank and RDO Codes; 2.3 Communicate to AAB, RAD and concerned RDCs/RDOs the new Bank and RDO Codes Assignment; 2.4 Prepare communication to AAB requiring it to submit to all concerned RDOs all remaining reports and transmit to RDC collections (through EDT) using the old Bank and RDO Code; 2.5 Prepare communication requiring concerned RDCs/RDOs to transmit all remaining exception reports, report on late batches and Bank Performance Statistics; 2.6 Compute penalties on procedural errors/late batches/collection reports and demand payment of penalties from the AABs. 3. The RAD shall 3.1 Prepare communication to AAB requiring it to submit all remaining reports and remit all collections under the old Bank and RDO Code; 3.2 Compute penalties on late submission of collection reports/late remittance of collections of AABs and demand payment thereof. 4. The RDCs/RDOs shall 4.1 Transmit all un-submitted Bank Performance Statistics, Exception Report and Report on Late Batches to CPD; 4.2 Update its records. 5. The ACIR-Collection Service shall 5.1 Review and initial/sign communications prepared by CPD/RAD. 6. The CIR/DCIR-Operations Group/MANCOM shall 6.1 Approve/disapprove communications prepared by CPD/RAD. E. Procedures on Penalty Imposition and Performance Evaluation: 1. The RDOs shall 1.1 Submit to CPD the Limited Bank Data Entry (LBDE) Exception Reports and Bank Branch Performance (Form 2841) prepared pursuant to RMO No. 37-99 dated April 18, 1999, RMO No. 13-99 dated October 13, 1998, not later than the 28th day of the following month; 1.2 Prepare and submit to CPD the List of Late Batches (Annex "A" hereof not later than the 28th day of the following month; and 1.3 Prepare and submit to CPD recommendation for the disaccreditation of AABs that are inactive in the collection of internal revenue taxes for six (6) consecutive months. 2. The RDCs shall 2.1 Prepare and submit to CPD copy furnished the Systems Standard & Technology Management Division (SSTMD-IPQS), the List of Late Batches, Bank Performance Statistics and LBDES Exception Report for RDOs with RDC based encoding and Report on Late Batches for EDT transmission for non-ITS RDOs; and 2.2 Prepare and submit to CPD recommendation to disaccredit AABs under RDOs with RDC-based encoding and non-ITS RDO that are inactive in the collection of internal revenue taxes for six (6) consecutive months. 3. The Information Systems Operations Service-Data Center (ISOS-DC) 3.1 Forward to CPD the List of Late Batches of AABs servicing LTS. 4. The RAD shall 4.1 Prepare preliminary notice, for signature of the ACIR-Collection Service, to AABs for delayed remittance of collections within fifteen (15) days upon discovery of the violation; 4.2 Receive, analyze and evaluate AABs responses to issued Notification Letters and prepare reply thereto; 4.3 Submit evaluation report on the waiver of penalties to BAC; 4.4 Compute penalties on late remittance of collections by AABs in accordance with the schedule of penalties as embodied in Annex "A-2" of the MOA between the BIR and the AABs, and prepare demand letters for payment thereof; 4.5 Issue Payment Order to AABs upon presentation of the demand letter and payment of penalties; 4.6 Prepare and submit, to the DCIR-Operations Group, ACIR-Collection Service and CPD, an AABs Consolidated Performance Evaluation Report (Annex "B" hereof) on or before the 28th day of the following month; 4.7 Prepare communication to BSP to debit the DDA of the concerned AAB for any outstanding penalties on delayed reporting of CRDC and outstanding obligation for the unremitted collection if the AAB failed to pay within four (4) months after the demand; 4.8 Submit to CPD through the ACIR Collection Service recommendation to disaccredit AABs; and 4.9 Prepare report and communication to Prosecution Division through the Legal Service for the signature of the ACIR Collection Service, for institution of judicial action in accordance with the provisions of the MOA between BIR and AAB. 5. The CPD shall 5.1 Receive, analyze and evaluate the Exception Reports, Bank Performance Statistics and List of Late Batches ( Annex "A" hereof ) from the RDOs/RDCs/ISOS-DC for LTS and the Bank Performance Statistics on Reporting and Remittances of Collections from RAD every 28th day of the following month; 5.2 Prepare preliminary notice, for signature of the ACIR-Collection Service, to AABs (HO) for errors/violations committed within thirty (30) days upon receipt of the Exception Reports, Bank Performance Statistics and List of Late Batches ( Annex "A" hereof ) from the RDOs and RDCs; 5.3 Receive, analyze and evaluate AABs' response to issued Notification Letters and prepare reply thereto; 5.4 Submit evaluation report on waiver of penalties to BAC; 5.5 Compute penalties on late batches/transmission and procedural errors in accordance with the schedule of penalties as embodied in Annex "A-2" of the MOA between the BIR and the AABs, and prepare demand letters for payment thereof; 5.6 Issue Payment Order to AABs upon presentation of the demand letter and payment of penalties; 5.7 Prepare communication to BSP to debit the DDA of the concerned AAB for any outstanding penalties for procedural errors/late batches/late collection reports if the AAB failed to pay within four (4) months after the demand; 5.8 Prepare and submit, to the DCIR-Operations, ACIR-Collection Service and other concerned Offices, an AABs Consolidated Performance Evaluation Report ( Annex "B" hereof ) on or before the 20th day of the next following month; 5.9 Prepare report and communication to Prosecution Division for the signature of the ACIR Collection Service, for judicial action in accordance with the provisions of the existing MOA between BIR and AAB and this RMO; and 5.10 Conduct field verification on the documents/records of the AABs pertaining to its collections and remittances of internal revenue taxes in coordination with the RDOs. 6. The BAC shall 6.1 Deliberate issues and concerns elevated by CPD & RAD and make recommendation to the CIR/DCIR-Operations Group/MANCOM; 7. The AAB shall 7.1 Receive preliminary notice from the BIR explaining the details of the exceptions/violations committed by AAB; 7.2 Respond to the BIR preliminary notice within 15 working days from receipt thereof; and 7.3 Pay the penalties demanded by the BIR or submit to the BAC, thru its Secretariat, its formal offer of compromise for the penalties, surcharges and/or interests within thirty (30) days upon receipt of demand letter. 8. The General Services Division shall 8.1 Accept payment of penalties on delayed reporting/remittance of collections, procedural errors and late batches/report from AABs; 8.2 Issue Official Receipts to AAB(s); and 8.3 Prepare and submit monthly Report of Collection of Penalties imposed on AABs ( Annex "C" hereof ) for delayed reporting/remittance of collections to RAD and monthly report of collections from penalties on procedural errors and late batches/reports to CPD; 9. The ACIR-Collection Service shall 9.1 Review and sign the preliminary notice to AABs prepared by CPD and RAD; 9.2 Review and initial the demand letter to AABs prepared by CPD and RAD for signature of the CIR/DCIR-Operations; and 9.3 Receive the Consolidated Report on AABs violations from CPD. 10. The CIR/DCIR-Operations Group/MANCOM shall 10.1 Approve/disapprove the demand letter prepared by CPD and RAD; and 10.2 Approve/disapprove recommendation of BAC on waiver of penalties. IV. REPEALING CLAUSE. All issuances or parts thereof, which are inconsistent with the provisions of this Order, are hereby repealed/modified/amended accordingly. V. EFFECTIVITY CLAUSE. This Order shall take effect immediately. (SGD.) RENE G. BAEZ Commissioner of Internal Revenue ANNEX A List of Late Batches ANNEX B Authorized Agents Banks (AABs) Consolidated Performance Evaluation Report ANNEX C Report of Collections of Penalties Imposed on AABs