Examination of Books of Accounts and Other Subsidiary and Accounting Records of Taxpayers Retiring from Business

August 6, 1984 REVENUE MEMORANDUM ORDER NO. 30-84 SUBJECT : Examination of Books of Accounts and Other Subsidiary and Accounting Records of Taxpayers Retiring from Business TO : All Internal Revenue Officers and Others Concerned Section 324 of the National Internal Revenue Code, as implemented by Section 22 of the Bookkeeping Regulations, provides that all corporations, partnerships or persons that retire from business shall, within ten (10) days from the date of retirement or within such period of time as may be allowed by the Commissioner in special cases, submit their books of accounts, including the subsidiary books and other accounting records to the Commissioner or any of his deputies for examination, after which they shall be returned. Corporations and partnerships contemplating dissolution must notify the Commissioner and shall not be dissolved until cleared of any tax liability. Also under Section 193 (a) (1) (i) of the Code, any person retiring from a business subject to the percentage tax shall notify the nearest internal revenue officer, file his return or declaration and pay the tax due thereon within twenty (20) days after closing his business. As required in the bookkeeping regulations, the examination of the books of accounts and records of retiring taxpayers shall be conducted immediately to ascertain if all the taxes due from the taxpayer have been paid. In view thereof, and to make certain that the pertinent provisions of the Tax Code and the bookkeeping regulations are complied with, all Regional Directors in the regional offices and the Revenue Service Chief of the audit divisions in the National Office, are hereby authorized to issue Letters of Authority to immediately investigate taxpayers retiring from business, observing at all times, however, the provisions of Revenue Memorandum Order No. 31-83, dated October 7, 1983, as amended by Revenue Memorandum Order No. 32-83 dated October 18, 1983, regarding the respective audit jurisdictions of the national and the regional offices. The Regional Directors and the Audit Division Chiefs shall submit to the National Assessment Office and the Sector Operations Office, respectively, within the first five (5) days of every month a list of retiring taxpayers subjected to investigation in the preceding month, indicating the kind and amount of internal revenue taxes assessed against each of the said taxpayers and if paid, the date and number of the confirmation receipt evidencing such payment. Strict compliance herewith is hereby enjoined. (SGD.) RUBEN B. ANCHETA Acting Commissioner