Printing, Distribution, Accountability and Issuance of Certificates of Clearance/Exemption on Transfers of Real Property

November 15, 1982 REVENUE MEMORANDUM ORDER NO. 34-82 SUBJECT : Printing, Distribution, Accountability and Issuance of Certificates of Clearance/Exemption on Transfers of Real Property TO : All Internal Revenue Officers and Others Concerned Information reaching this office is to the effect that Certificates of Clearance/Exemption are being issued in the different revenue regional and district offices by those authorized to do so without proper control and procedure. Because of this, there have been instances uncovered where fake certificates of clearance are presented to Registers of Deeds, thus making it possible for title to real property to be transferred to the buyer even without the payment of the capital gains tax due from the seller. acd In order to clearly define the responsibility of the revenue officials authorized to issue certificates of clearance/exemption and to ensure the collection of capital gains taxes due on sales of real properties, the following procedure is hereby promulgated for compliance by all concerned: I. Certificates of Clearance/Exemption to be Accountable Forms : A. Heretofore, all certificates of clearance and certificates of exemption shall be in printed form with consecutive serial numbers boldly printed at the upper right hand corner thereof. Each of such forms shall be printed in four copies and bound in pads of fifty sets to each pad. The forms shall be printed only upon the written authority and approval of the Commissioner of Internal Revenue and shall be in such forms as shown in ANNEXES 1 and 2 attached hereto and which are made integral parts hereof, and they shall be accountable forms. B. The Accountable Forms Division in the National Office shall be the custodian of the blank forms of certificates of clearance/exemption. It shall maintain a permanent record book where entries are to be made everytime blank forms of such certificates are requisitioned by officials authorized to do so. The record book shall contain the following data: 1. serial numbers of the certificates issued to requisitioning officer 2. date of requisition 3. requisitioning office 4. name and designation of requisitioning officer C. Serial numbers of Certificates of Clearance/Exemption Certificates of Clearance and Certificates of Exemption shall be numbered consecutively, starting from CG-00001-CC and CG-00001-CE, respectively, with the components thereof having the following signification: CG capital gains 00001 main serial number CC Certificate of Clearance CE Certificate of Exemption II. Officers Authorized to Requisition Certificates of Clearance/Exemption A. Only Revenue Regional Directors and Revenue District Officers are authorized to requisition Certificates of Clearance/Exemption. General Form No. 8.05 for requisitioning accountable forms shall be used for this purpose. All such certificates shall be accountable by the above-mentioned officials. B. Requisitions by Revenue District Officers shall be coursed thru the Regional Director for approval. C. It shall be mandatory for the Chief, Accountable Forms Division to fill the requisition of the revenue regional directors/revenue district officers for certificates of clearance/exemption and to forward the requisitioned forms to the Revenue Regional Director after indicating in the record book the pertinent information required. D. Disposition of Copies of the Certificate The authorized revenue official shall prepare the required certificates in four (4) copies to be issued and distributed as follows: Original to the taxpayer for presentation to the Register of Deeds Duplicate to be retained by the issuing revenue official Triplicate to be attached to the docket of the case Quadruplicate to be sent to the National Assessment Office together with the report every month. E. Record Keeping of Certificates of Clearance A certificate register shall be kept by every revenue official authorized to issue certificates of clearance/exemption. All certificates issued shall be listed therein in numerical order. The register shall contain the following information: 1. serial number of certificate 2. date issued 3. name and address of seller and buyer 4. date of sale 5. nature and location of real property sold 6. land area in square meters 7. selling price 8. capital gains tax paid 9. if exempt, reason. F. Report of Certificates of Clearance/Exemption Issued All Revenue Regional Directors and Revenue District Officers shall prepare a list of certificates of clearance/exemption (ANNEX 3) issued during the month which shall be transmitted to the National Assessment Office not later than the 10th day of the succeeding month, together with the quadruplicate copies of the certificates. aisa dc G. Verification of Certificate Register and Monthly Reports The Revenue Service Chief, National Assessment Office, may at any time authorize a spot verification during office hours of the certificate register of any Regional Director or Revenue District Officer, as well as the monthly reports of certificates of clearance/exemption issued, to determine the correct number of certificates issued and of those remaining unissued as of a particular date, so as to make sure that every certificate is duly accounted for. Any provision of Revenue Memorandum Order No. 21-80 dated May 28, 1980 which is inconsistent herewith is hereby revoked or amended accordingly. The procedure and the forms prescribed herein shall be in force beginning January 1, 1983. Strict compliance herewith is enjoined. RUBEN B. ANCHETA Acting Commissioner ANNEX 1 ANNEX 2 ANNEX 3 List of Certificates of Clearance/Exemption Issued