Amending Revenue Memorandum Order No. 35-74, Revenue Memorandum Order No. 41-75 and Revenue Memorandum Order No. 53-75, all relating to the procedures in processing Corporate Annual Income Tax Returns Involving Refunds/Credits of Excess Income Taxes Paid on Corporate Quarterly Declarations of Net Income

June 11, 1976 REVENUE MEMORANDUM ORDER NO. 32-76 SUBJECT : Amending Revenue Memorandum Order No. 35-74, Revenue Memorandum Order No. 41-75 and Revenue Memorandum Order No. 53-75, all relating to the procedures in processing Corporate Annual Income Tax Returns Involving Refunds/Credits of Excess Income Taxes Paid on Corporate Quarterly Declarations of Net Income TO : All Internal Revenue Officers and others concerned I. Receipt and Transmittal of Returns : Corporate annual income tax returns showing refundable amounts arising from overpaid quarterly income taxes received in all field offices should be immediately segregated and transmitted to the Assessment Branch of the region. All "out-of-region refundable returns" should be immediately transmitted by the Assessment Branches to the corresponding Regional Offices having jurisdiction over the taxpayers. To insure prompt action on these returns all transmittal letters should be appropriately flagged with "Rush" slips with the word "REFUNDABLE" written in bold letters to catch the attention of all those involved in their processing. (Annex "A") II. Pre-Audit of Returns : All corporate annual income tax returns showing refundable amounts falling within the jurisdiction of the Revenue Region shall be pre-audited in the Assessment Branch upon receipt of the same. The originals of the three quarterly returns of the corporation together with xerox copies of the official receipts of the quarterly payment shall be attached thereto and pre-audited at the same time as the annual return. Pre-audit shall consist mainly of checking mathematical accuracy of the figures in the return. No disallowances of expenses or inclusion of additional income shall be made during pre-audit, unless the deduction shown on the return are patently unallowable or unless any taxable income declared in the return was not included in the computation of the taxable income. Checking the accuracy of the computations shall extend up to and including the refundable amount. The "Audit Sheet for Corporate Annual Income Tax Returns showing overpayment of Income Taxes Paid" attached as Annex "B" shall be accomplished for every return regardless of whether or not any adjustment was made. All the blanks in the audit sheet should be filled in with pertinent information. cdt The Audit Sheet shall be prepared in duplicate. The original shall be attached to the original copy of the Income Tax Return and the duplicate copy of the audit sheet to the duplicate of the return. III. Numbering : To avoid delay in the processing of refundable corporate returns, all such returns need not be segregated from the other returns of the same classification for separate numbering. After pre-audit, all refundable corporate income tax returns shall be numbered immediately in accordance with existing procedures. The original copies of these refundable returns should be immediately pulled out of the block of returns and a xerox copy or a dummy sheet (Annex "C") containing pertinent data like name of taxpayer, TAN, address of principal place of business, kind of business, gross income, total deductions, net income, amount of tax due, tax credit, balance of tax due, total quarterly payments and total amount refundable thereof, shall be inserted in this place to give notice to the Data Processing Center that the same is being processed for refund purposes. The duplicate copies shall remain with the block of duplicate returns and shall be processed in the same manner as all other duplicate corporate returns. IV. Processing by the Direct Taxes Division The refundable returns duly pre-audited and numbered, together with the original pre-audited three quarterly returns and its attachments of xerox copies of official receipts of quarterly payments and the corresponding audit sheet shall be transmitted to the Direct Taxes Division. This Office shall prepare the "Authority for Tax Refund" attached hereto as Annex "D" for the signature of the Deputy Commissioner of Internal Revenue after having verified the correctness of the audit sheet prepared in the regional office. cd V. Processing by the Accounting Division The "Authority for Tax Refund" attached hereto as Annex "D" together with the annual return, quarterly returns and audit sheet shall be forwarded to the Accounting Division for processing of the refund and the preparation of the refund check. The Accounting Division shall be responsible for verifying the quarterly tax payments. Unless the corporate taxpayer specifically requests for a tax credit of the amount refundable as shown in the annual return, overpayment shall be refunded. After preparation of the refund check, the voucher and all papers will be sent to the Assistant Commissioner of Internal Revenue for signature on the voucher and the refund check after which all the papers should be returned to the Accounting Division. After the refund check and corresponding papers have been returned, the Accounting Division shall separate the refund check and the voucher and forward the same to the Office of the Auditor for countersignature. The rest of the papers and the docket will be retained by the Accounting Division until the refund check has been countersigned and returned by the Office of the Auditor. The Accounting Division will then forward all the papers to the Assessment Service. VI. Tax Credit If the corporate taxpayer specifically requests for a tax credit, the Direct Taxes Division, after reviewing the papers as audited, shall forward the same to the Accounting Division for verification of the quarterly tax payments, after which, the papers should be returned to the Direct Taxes Division for the preparation of the "Tax Credit Memo" (Annex "E"). The papers then should be forwarded to the Deputy Commissioner of Internal Revenue for the approval of the Tax Credit Memo. After approval, the Tax Credit Memo, together with all the papers thereof, shall be returned to the Accounting Division, which will retain copy of the Tax Credit Memo and then forward all the papers to the Assessment Service. VII. The Assessment Service will take care of the release to the corporate taxpayer of the refund check and/or Tax Credit Memo thru the Direct Taxes Division. A copy of the Tax Credit Memo will be forwarded to the Revenue Service Chief, Collection. The Direct Taxes Division will prepare for record purposes a record book or register containing pertinent data of all Tax Credit Memos and/or refund checks approved and issued to the corresponding taxpayers. At the end of every month, the Direct Taxes Division thru the Revenue Service Chief will furnish the Collection Service and Accounting Division a list of names of corporate taxpayers who were issued Tax Credit Memos and the corresponding amount of Tax Credit as well as refund checks released to the taxpayers. After delivery of the refund check and/or Tax Credit Memo, all the papers will be forwarded to the Data Processing Center for computer processing after which, the Center will return all the papers to the respective regions concerned. VIII. Effectivity : The provisions of this Memorandum Order will take effect immediately and supersede all previous Memorandum Orders and issuances relative to procedures in processing refundable returns of corporations arising from excess payments of quarterly taxes. All concerned are enjoined to be guided accordingly. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN 1456-040-3 ANNEX A TAX CREDIT NOTIFICATION ________________ Date _____________________ ________________ Corporate Taxpayer Taxpayer Account No. _____________________ Address Gentlemen : Pursuant to your request for a tax credit, representing overpayment of income taxes paid for the calendar/fiscal year ending _______________, please be informed that a tax credit in the amount of P____________ has been approved in your favor. Application of this tax credit to any internal revenue tax liability may be made by presenting the enclosed tax credit Memo to the Chief, Receivable Accounts Division, Finance Building, Manila. Very truly yours, ________________________ Commissioner of Internal Revenue By: __________________ Revenue Service Chief (Assessment) Encls. : Tax Credit Memo No. TAX REFUND NOTICE ________________ Date _____________________ ________________ Corporate Taxpayer Taxpayer Account No. _____________________ Address Gentlemen : Please be informed that your claim for a tax refund, representing overpayment of income taxes paid for the calendar/fiscal year ending ___________ in the amount of ______________ has been approved. You may now send your duly authorized representative to the Chief, Direct Taxes Division, Finance Building Manila, to take delivery of the check. Very truly yours, ________________________ Commissioner of Internal Revenue By: __________________ Revenue Service Chief (Assessment) ANNEX B No. ___________ (Prepare in Duplicate) AUDIT SHEET FOR CORPORATE ANNUAL INCOME TAX RETURNS SHOWING OVERPAYMENT OF INCOME TAXES PAID __________________________ _________________________ Corporate Name Taxpayer Account No. __________________________ _________________________ Address Assessment No. Notice Covered: CALENDAR/FISCAL Year Ending _____________ Gross Income for Annual Return P__________ Total Deductions __________ Net Income per Annual Return __________ Add/Deduct: Adjustments P__________ Nature Amount ____________ P_________ ____________ _________ ____________ _________ ____________ _________ ____________ _________ ____________ _________ ____________ _________ ____________ _________ ____________ _________ ____________ _________ Total/Net Adjustments P_________ Net Income as Audited P_________ Amount of Tax Due P_________ Less: Tax Credits (Specify) P________ Balance of Tax Due __________ Deduct: Quarterly Tax Payments P_________ Net Income Amount * Quarter for the quarter O.R. No. Date of Tax _______ ___________ ______ _______ P_____ _______ ___________ ______ _______ P_____ _______ ___________ ______ _______ P_____ _______ ___________ ______ _______ P_____ Total P_____ Deduct: Delinquency Penalties Paid _____ Total Amount to be Credited P_______ Amount for Refund/Credit P========= Audited by: ________________ Examiner Date: ________________ Recommending Approval: ________________ Regional Director APPROVED: ________________ Revenue Operations Head (Assessment) * (Attached Xerox copies of Official Receipt) ANNEX C Dummy Sheet Corporate Refundable Return Assessment No. _______ 1. Name of Corporation ______ TAN ________ 2. Address of Principal Place of Business 3. Kind of Business 4. Gross Income or Gross Receipts 5. Total deductions 6. Net Income 7. Tax Due 8. Tax Credit 9. Balance of tax due 10. Total Quarterly Payments 11. Amount Refundable ANNEX D AUTHORITY FOR TAX REFUND _________________ Date Subject: _________________________ ________________ Corporate Taxpayer T.A.N. _________________________ ________________ Address Assessment No. Period Covered: Calendar/Fiscal Year Ending _______________ Amount Refundable: _______________ ________________ (in figures and words) MEMORANDUM FOR: The Chief, Accounting Division Bureau of Internal Revenue Manila Please prepare the refund check in the amount of _______ in favor of the aforementioned corporate taxpayer, representing overpayment of income taxes paid for the period indicated above, after ascertaining the authenticity of the official receipts presented. The computation of the amount refundable is shown in the attached audit sheet. cdta ________________________________ Deputy Commissioner of Internal Revenue