Implementation of RR 8-83 Prescribing the Policies, Guidelines and Procedures in the Manner of Issuing Refunds or Credits in Excess of Taxes Withheld on Individual Incomes

September 22, 1983 REVENUE MEMORANDUM ORDER NO. 30-83 SUBJECT : Implementation of RR 8-83 Prescribing the Policies, Guidelines and Procedures in the Manner of Issuing Refunds or Credits in Excess of Taxes Withheld on Individual Incomes TO : The Revenue Service Chiefs (Collection, Financial and Management, Administrative and Personnel, Assessment), the Chiefs Withholding Tax Division, General Services Division and Others Concerned In keeping with the policy of the Government to render the highest quality of service to the taxpaying public and with the end-view of simplifying the processing and release of tax refunds to individual refundees, the following guidelines and procedures are hereby promulgated. I. GENERAL POLICIES The following policies shall be observed by all concerned: A. Effective immediately, the Bureau hereby appoints the Philippine National Bank (PNB) as its Tax Refund Disbursing Agent. B. Prescribed documents are the following: 1) Refund Notice (RN) - shall mean the individual notices to be sent by BIR to individual refundees on the basis of which they can claim payment of their tax refund from the PNB Disbursing Office in accordance with the terms of said notice. 2) Tax Credit Certificate (TCC) - refers to the certificate of refund issued to an individual refundee entitled to payment in accordance with said certificate. cd i 3) Tax Refund Payment Voucher (Refund Voucher) - refers to the prenumbered non-negotiable instrument to be issued by BIR to PNB (for distribution to the PNB Disbursing Offices), which will serve as authority for PNB to deduct from the BIR main or sub-accounts the amount indicated on the Refund Vouchers and pay the same to the individual refundees concerned. 4) Refund Check - refers to the Treasury Warrant to be delivered by BIR from time to time, to the PNB coordinating office. The Refund Check shall be (i) drawn in favor of PNB, (ii) in such amount equal to the aggregate of the tax refunds payable under the schedules of disbursement, and (iii) dated as of delivery of said check. 5) Schedule of Disbursements - shall mean the list to be sent, from time to time, by the BIR to PNB Coordinating Office for distribution by the latter to PNB Disbursing Offices, which list shall include names of individual taxpayers entitled to Tax Refunds and corresponding amount payable to each taxpayer. Each schedule of disbursement shall contain the names of not more than 2,000 individual refundees. 6) Post Office Listing (POL) - shall mean the list to be prepared by the Revenue Computer Center containing the names of the individual refundees and their respective home addresses stated in their Income Tax Returns (ITR's) and which shall be used by the General Services Division in transmitting the tax refund notice through the Post Office. 7) Refund Register - shall mean the computer printed list of the refundees including their TAN, amount of refunds due to them which shall be sent to the Accounting Division as their basis for preparing the General Voucher. 8) Taxref Alpha List - shall mean the master list of all individual refundees, the amount of tax refunds, name of employers, home address and TAN of the refundees. 9) Tax Refund Report Sheet - is a summary of each refund issuance and shall contain among others the following: (i) PNB Branch; (ii) inclusive serial number of corresponding Refund Vouchers; (iii) number of payees; and (iv) total amount of refund. 10) Computer Report of Discrepancies - shall mean the computer listing of employers to include the discrepancies between the Annual Return of Income Tax Withheld on Compensation (W-3) and the Employee's ITR. It will also include among others additional data that are required to be submitted. 11) Report of Deviations - shall mean the computer listing of individual taxpayers whose declared income and taxes withheld did not match the amounts as reported by the employers in their W-3. C. From time to time, BIR shall deliver to the PNB Coordinating Office the (i) Schedule of Disbursement; (ii) Refund Vouchers for the taxpayers named in the Schedule of Disbursements; (iii) The Tax Refund Report Sheet; and (iv) The Refund Check. The Refund Check shall be deposited to the BIR Main Account. D. BIR shall begin sending out the Refund Notices to the taxpayers two (2) calendar weeks after delivery of the documents mentioned in "C" above. E. The authorized PNB Disbursing Office shall pay the Tax Refund of the individual refundee provided that: 1. He presents his Refund Notice prior to the Payment Expiry Date; 2. He submits such form of identification acceptable to PNB such as, but not limited to, the acknowledged copy of his ITR, Tax Account Number card, Office ID, Driver's License; and 3. There is no discernible discrepancy whatsoever in the data indicated in the refundee's ITR and in the Schedule of Disbursement with respect to information relative to the refundee's identification; and there is no discernible discrepancy whatsoever in the data indicated in the Refund Notice and in the Refund Voucher with respect to the amount of the Tax Refund Payable and the Payment Expiry Date. In meritorious cases, and with the approval of the Commissioner of Internal Revenue or the Regional Director or the Revenue District Officer, refunds may be claimed through an authorized representative of the refundee. F. If the requirements above are met, the PNB Disbursing Office shall pay the Tax Refund in cash. The refundee shall acknowledge receipt of said payment by signing the acknowledgment portion of the Refund Voucher and surrenders the same with the corresponding Refund Notice to the PNB Disbursing Office. G. If the refundee fails to claim his refund before expiry date, another Refund Notice shall be issued upon written request and surrender of the expired Refund Notice. H. If the amount of excess withholding tax is Two Hundred Pesos (P200.00) or less, the refund or credit shall be made with the issuance of the Tax Credit Certificate (TCC). The TCC authorizes the employer to credit the said amount against the income tax which would otherwise be withheld from the employee for the year in which payment or application is made, or serves as an authority for the refundee to use the tax refund in payment of his income tax obligations with the BIR. I. Before the individual refundee is credited for the amount of refund, he shall be required to affix his signature on the original copy of the TCC. The employer who credited the amount thereof against the tax required to be withheld from the refundee shall attach said signed certificate to its return, BIR Form W-1, for the quarter in which credit was made. J. The TCC shall be valid for one (1) year from date of issue. After the lapse of such period, but within five years from date of issue, the refundee may request the Commissioner of Internal Revenue for its reissuance. II. PROCEDURE The foregoing Procedures/Guidelines shall be observed by the following: A. Collection Agent 1. Receive, segregate and classify income tax returns as follows: a) Exempt b) Even c) Refundable d) Plain Taxable e) Taxable with Tax Credit 2. Batch the classified returns at one hundred (100) returns per batch. 3. Transmit to the RDO the batched returns B. Revenue District Office 1. Receive and collate all Income Tax Returns from all its Collection Agents. 2. Transmit to the Assessment Branch giving priority to all refundable returns. C. Assessment Branch (Regional Office) 1. Receive documents from RDO. 2. Assign Assessment Numbers giving first priority to refundable returns. 3. Transmit immediately ITRs on Purely Compensation Income (1701-A) to the Revenue Computer Center (RCC). 4. Conduct Pre-audit of Refundable Returns or returns of those declaring Mixed or Purely Business Income (1701) before transmittal to the Revenue Computer Center. 5. Receive Report of Discrepancies from RCC and direct the investigation on the violations of Withholding Agents. 6. Prepare Assessment of Deficiency in taxes withheld and impose the penalties as provided by law. D. Revenue Computer Center (RCC) 1. Receive the returns from the Assessment Branch. 2. Process all refundable returns employing normal computer procedures with the following computer outputs: a) Tax Refund Report Sheet b) Refund Register c) Disbursement Schedule d) Tax Refund Payment Voucher e) Refund Notice f) Tax Credit Certificate g) Post Office Listing h) Tax Refund Alpha List i) Computer Report of Discrepancies j) Report of Deviations 3. Transmit two (2) copies of Tax Refund Report Sheet and Refund Register to the Accounting Division. cd 4. Transmit the Disbursement Schedule and the corresponding Tax Refund Payment Vouchers to the General Services Division for transmittal to PNB Coordinating Office. 5. Forward one copy of the Refund Register to General Services Division for transmittal to the proper Revenue District Offices. 6. Seal the Tax Refund Notices or Tax Credit Certificate in individual envelopes and transmit the same together with 2 copies of the Post Office Listing to the General Services Division for mailing on the specified date. 7. Receive from General Services Division Refund Documents consisting of: a) "PAID" Refund Vouchers (with the "ACKNOWLEDGMENT" portion signed by the refundee) and the corresponding Refund Notices surrendered by the refundees. b) The 'CANCELLED' Refund Vouchers cover the Refund Notice which remains unclaimed by the refundee after the Payment Expiry Date. 8. Prepare reconciliation of returns issued/unissued for each refund issuance and forward the same to the Accounting Division. 9. Transmit the Tax Refund Alpha List, report of deviations and the corresponding ITRs to the Refund Audit Division. 10. Transmit one copy of the report of discrepancies and the Tax Refund Alpha List to the Withholding Tax Division. E. Accounting Division 1. Receive two copies of the Tax Report Sheet and Refund Register from RCC. 2. Prepare the corresponding General Voucher for each Tax Refund Report Sheet. 3. Transmit the General Voucher with the required attachments to the General Services Division. 4. Record in the books of accounts of the BIR the amount deposited with PNB for individual Income Tax Refunds using journal entries indicated in Attachment A. 5. Record Tax Refund Payment Vouchers of claimed/unclaimed tax refunds based on the reconciliation report submitted by RCC, using prescribed journal entries. F. General Services Division 1. Receive the General Voucher with the attachments from the Accounting Division. 2. Prepare and issue a check in favor of PNB corresponding to the aggregate amount of income tax refunds as indicated in the General Voucher. 3. Receive disbursement schedules and tax refund payment vouchers from RCC for transmittal to PNB coordinating office. 4. Transmit Refund Register to the respective RDOs. 5. Receive sealed envelopes containing the Refund Notices or Tax Credit Certificates with PO listing from RCC. Mail said notices or TCC on specified date after checking the notices or TCCs with the PO listing. 6. Coordinate with the RCC representative on the following: A. Transmittal to the PNB Coordinating Office of the following: a) Refund Check b) Disbursement Schedule c) Tax Refund Payment Vouchers d) Tax Refund Report Sheet B. Receipt from PNB of: a) Check corresponding to cancelled tax payment vouchers b) Cancelled tax refund payment vouchers c) Paid refund vouchers with corresponding Refund Notices. 7. Issue Official Receipt for the check and remit the same to the Bureau of Treasury furnishing as copy of the remittance advice to the Accounting Division for recording. 8. Mail all Refund Notices or Tax Credit Certificates making sure that the file copy of the Post Office list is stamped with the date of mailing. 9. Maintain a separate record of all transactions pertaining to individual income tax refunds for control purposes. G. Refund Audit Division 1. Receive the Computer Report of deviations, tax refund alpha list and the refundable income tax returns from RCC. 2. Direct the Post-Audit of refundable income tax returns H. Withholding Tax Division 1. Receive the Tax Refund Alpha List and a copy of the report of deficiencies from RCC. 2. Verify deficiencies as reported and determine appropriate measures to correct such deficiencies. 3. Answer queries from the taxpayer with regards to released refunds. III. REPEALING CLAUSE All issuances, orders or portions thereof which are inconsistent with the provisions of this Revenue Memorandum Order are hereby amended or revoked accordingly. IV. EFFECTIVITY This order shall take effect immediately. (SGD.) RUBEN B. ANCHETA Acting Commissioner