Guidelines and Procedures in the Conversion of Audit Cases for the Integrated Tax System (ITS) Implementation

March 4, 1997 REVENUE MEMORANDUM ORDER NO. 32-97 TO : The Regional Directors and Chiefs of the Assessment Divisions of Its Regional Offices The Revenue District Officers of Its Revenue District Offices All Other Revenue Officers and Officials Concerned SUBJECT : Guidelines and Procedures in the Conversion of Audit Cases for the Integrated Tax System (ITS) Implementation I. OBJECTIVES This Order is issued: A. To prescribe the guidelines and procedures in the conversion of existing audit cases. B. To identify the cases covered by the conversion process. C. To capture the audit assessments in the taxpayer ledger. D. To effect the generation and issuance of ITS Audit Result/ Final Assessment Notice. LLphil II. GUIDELINES A. Conversion Scope Audit Cases covered by Letters of Authority (LAs) and forwarded to the Assessment Division will be converted as follows: 1. Cases with issued Preliminary Assessment Notice (PAN) on the old form which have not been paid or protested within the prescribed period; 2. Cases with issued PAN on the old form with invalid protests; and 3. Cases with issued Final Assessment Notice-(FAN) on the old form which are under protest. No other case will be converted other than the above mentioned cases. B. Conversion Approach The Account Adjustment Screen of the Taxpayer Accounting System will be used in the conversion process. LLpr C. Conversion Team A Conversion Team (Annex "A") is created which will be composed of the following revenue officials and officers with their designated responsibilities: 1. Audit Project Steering Committee (PSC) Chairman The PSC Chairperson will oversee the administrative aspect which includes but is not limited to resource allocation and time scheduling. He will, likewise, resolve or raise to the Management Committee relevant issues and concerns raised by the Chairman of the Conversion Team or any of its members which may be encountered during the implementation of the conversion plan. 2. Chairman, Conversion Team The Chairman of the Conversion Team is tasked to: a. Supervise the Conversion Team in pre-conversion activities, data gathering, data entry and production support processes. b. Coordinate with the RDOs and Assessment Divisions regarding conversion requirements. c. Coordinate with AC-PS, Inc. on the application and technical architecture requirements. d. Elevate to the PSC Chairperson conversion issues and concerns. e. Provide timely status reports to the PSC Chairperson. 3. Conversion Support Group The conversion support group shall be composed of three members, one of whom must be a BIR expert user. The other two must come from the pool of BIR personnel who assisted in the development of the Audit System. Their function is to assist the chairman in the overall implementation of the conversion plan. The ITS consultants, AC-PS, Inc. will assist the Conversion Team in identifying system-related conversion issues, recommend solutions to issues, ensure availability of programs needed, oversee site preparation, hardware acquisition and installation, grant access and technical support. prLL 4. Conversion Unit Heads The Conversion Unit Heads shall be composed of the Group Supervisors in the Assessment Divisions who will: a. Supervise Revenue Officers in the pre-conversion and conversion processes b. Check the correctness of converted data. c. Raise to the Conversion Coordinator issues and concerns identified by the Revenue Officers Reviewers. 5. Regional Conversion Coordinator The Assistant Chief of the Assessment Division shall act as the Conversion Coordinator to: a. Ensure that tasks for pre-conversion and conversion activities are performed as scheduled. b. Provide quality check on converted data. c. Coordinate with the other Group Supervisors/ Conversion Unit Heads on conversion activities, time scheduling, procedures to be performed and other issues. d. Coordinate with the Chairman, Conversion Team on issues and concerns raised by the Conversion Unit Heads and their Revenue Officers- Reviewers. 6. Conversion Team Members The Conversion Team Members consist of the Reviewers at the Assessment Division. III. PROCEDURES 1. Pre-Conversion Procedures A. At the RDOs a. The Revenue District Officer shall: a.1. Disseminate this RMO to the different Group Supervisors and Revenue Officers of the Assessment Unit upon its effectivity. a.2. Direct the Revenue Officers in the Assessment Unit through their Group Supervisors to identify and segregate cases with issued FAN on the old form and under reinvestigation for immediate submission to the Assessment Division. a.3. Direct the Registration Unit to verify if the taxpayers contained in the list submitted by the Group Supervisors in the RDO and those coming from the Assessment Division are registered with the ITS. If not, effect registration of these taxpayers. b. The Revenue Officers will: b.1. Group their-dockets into those with LAs and those-without LAs. b.2. Identify cases with LAs which were paid with the new payment form and cases with issued FAN on the old form which are under reinvestigation. b.3. Provide the Group Supervisor with the list of Taxpayers together with their Tax Identification Numbers (TIN) on the above cases for verification with the Registration System. After the taxpayer in the list have been registered with ITS, the memorandum report for each case should state that the taxpayer has been included in the ITS Registration database. b.4. Submit the list to the Group Supervisor within one (1) month from the effectivity of this Order. b.5 Prepare the report on the reinvestigation of cases with FAN on the old form. c. The Group Supervisors at the Assessment Unit of the RDOs, within three days from receipt of the dockets, shall: c.1. Check the names of the taxpayers and their TIN as stated on the list given by the Revenue Officers if they are registered in the ITS. c.2. For taxpayers who are not registered in ITS, request the RDOs to direct the Registration Unit to register these taxpayers. c.3. After all the taxpayers in the list have been registered, instruct the Revenue Officers to note in the report of investigation that the taxpayer is already included in the ITS database. B. At the Assessment Division a. The Chief of the Assessment Division shall: a.1. Disseminate this RMO to all Reviewers, Group Supervisors and concerned personnel of the division at the time of its effectivity. a.2. Assign to the different Group Supervisors the unassigned cases for review from the RDOs immediately upon the effectivity of this Order. b. The Assistant Chief of the Assessment Division shall act as the Conversion Coordinator c. All Group Supervisors shall: c.1. Act as Conversion Unit Heads. c.2. Assign to the Reviewers the cases for review from the RDOs given by the Chief of the Assessment Division within 24 hours from receipt thereof. c.3. Review the dockets submitted to them by the Reviewers. c.4. Submit the list of taxpayers with their Tax Identification Numbers (TINs) to the Regional Conversion Coordinator. d. The Reviewers will: d.1. Segregate the dockets with LAs and without LAs. d.2. Identify the dockets which are covered by the conversion scope. d.3. Ascertain if the taxpayer is registered with ITS based on the report of the investigating Revenue Officer. d.4. List the names and TINs of the unregistered taxpayers and submit the list to the Group Supervisor. d.5. Review all dockets for conversion, check the completeness of the dockets and verify if the tax type is stated. Check also if the original return and revenue officer's audit report have been completely and accurately filled up and are attached to the docket. Submit the report together with the Transcript of Assessment to the Group Supervisor for signature or appropriate action. e. The Regional Conversion Coordinator shall: e.1. Collate all the lists and submit these to the RDOs for verification with the Registration System. 2. Conversion Procedures a. All conversion procedures will be performed only at the Assessment Division by using the Account Adjustment of the Taxpayer Accounting System. b. The Reviewers will accomplish and sign one copy of the "Request for Account Adjustment" (RAA) form on every docket for conversion that they are handling based on the approved Transcript of Assessment. LLjur c. The Reviewers will submit the duly accomplished RAA form for approval of the Chief of the Assessment Division. d. The concerned Group Supervisor and Assistant Chief of the Assessment will affix their initial on the RAA form after which the Chief of the Assessment Division will approve/sign the requests. e. The dockets with the approved RAA will be returned to the concerned Reviewer through their Group Supervisors. f. The Reviewer shall refer to the ITS Operations Manual on how to enter the account adjustments and generate the Audit Results/Final Assessment Notice (FAN). g. The Audit Results/FAN will be verified by the Reviewer against the approved RAA. h. The procedures provided in the Operations Manual for the sending of the FAN will thereafter be followed. IV. REPORTING REQUIREMENTS On the 7th, 15th, 22nd and last day of each month from the effectivity of this Order, the Regional Conversion Coordinator shall submit a status report on the conversion process to the Chairman of the Conversion Team using the form prescribed in Annex "B" and "B1" hereof. The report shall include any issue/concern that need to be resolved, in consultation with the PSC Chairperson, the application team consultants, AC-PS, Inc. and/or the Management Committee. The Chairman, Conversion Team shall then submit a consolidated status/report on the conversion process for all ITS RDOs to the Audit PSC Chairperson. A bi-monthly status report together with the issues to be raised to the Integration Committee will be rendered by the PSC Chairperson. V. EFFECTIVITY This order takes effect immediately. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue ANNEX A ANNEX B ANNEX B1