Clarifications on Sections II-A of Revenue Memorandum Order No. 27-85

December 24, 1985 REVENUE MEMORANDUM ORDER NO. 32-85 SUBJECT : Clarifications on Sections II-A of Revenue Memorandum Order No. 27-85 TO : All Revenue Officials and Others Concerned I. This Order is issued to amplify on the policy enunciated in RMO 27-85 discouraging the payment of tax liabilities before the issuance of formal assessment notice or demand letter in all cases under investigation. Taxes determined upon investigation of tax cases may be paid even before the issuance of a formal assessment notice or demand letter under the following instances: 1. Where the issuance of certificates of clearance has been delegated to the Revenue District Officer as in cases of transfer of real properties subject to the: aisa dc a. Capital gains tax - considering that the certificate has to be issued within ten (10) days after filing the return and the tax has to be paid prior to the issuance of said certificate; b. Estate tax - where the fair market value of real and personal properties do not exceed P100,000 for Classes A1 and A Revenue Districts and P50,000 for Classes B, C and D Revenue Districts; 2. When during the investigation it is discovered that the taxpayer failed to withhold taxes required to be withheld, whether only penalties shall be collected since the recipient has declared the income and paid the tax thereon or where the taxpayer agrees to pay the taxes that should have been withheld including penalties; and 3. Where the taxpayer has agreed to pay the compromise penalties for violations of PDs 1254 and 1255 as amended by PD 1937. II. In view of the above, Section II.E.1.(a) is hereby amended to read as follows: II.E.1.(a) The dockets shall be transmitted by the National Audit Review Division, Refund Audit Division, Sector Audit Review Division, International Operations Division (for audit sheets on returns of non-resident citizens) or Assessment Branches to the offices of the approving officials in batches of not more than ten cases to a batch. Cases wherein the deficiency tax liabilities were paid immediately after investigation but prior to the final approval of the report allowed under Paragraph I hereof, or under the policies effective prior to the issuance of this Order, shall be batched and listed separately. cd i III. Effectivity This Order shall take effect immediately. (SGD.) RUBEN B. ANCHETA Acting Commissioner