Guidelines and Procedures in the Conversion of Accounts Receivable Cases for the Integrated Tax System (ITS)

August 1, 2000 REVENUE MEMORANDUM ORDER NO. 38-00 SUBJECT : Guidelines and Procedures in the Conversion of Accounts Receivable Cases for the Integrated Tax System (ITS) TO : The Assistant Commissioner Large Taxpayers Service, Assistant Commissioner Excise Tax Service, Regional Directors, Revenue District Officers and All Other Officers and Officials Concerned I. BACKGROUND Conversion of accounts receivable is a requisite for the Receivables Capability Rollout to create a single portfolio of A/R cases in Integrated Tax System which will be the focus of monitoring. II. OBJECTIVES This Order is issued to: 1. Prescribe guidelines and procedures in the Conversion of Accounts Receivable/AR. 2. Identify the cases covered by the conversion process. 3. Identify the offices responsible for the implementation of this Order. DTSaHI 4. Provide management the periodic status of A/R Conversion. III. DEFINITION OF TERMS 1. Potentially Collectible Accounts Receivables refers to delinquent accounts that can be collected from taxpayers having the capacity to pay their tax liabilities. To be potentially collectible. the taxpayer must own property whether real or personal, and the A/R case is not over five (5) years old. 2. Current Accounts refers to delinquent accounts whose Assessment Notices were issued from January 1, 9000. 3. Conversion Input Form (CIF) refers to the form that will be used to gather data as required before encoding to ITS records. (Attachment A) IV. GUIDELINES A. Conversion Scope 1. All manually identified potentially collectible accounts receivable with complete information as required by the Conversion Input Form (CIF) shall be converted, with priority to the current accounts. 2. Conversion shall start at least five (5) weeks and end one (1) week prior to the scheduled rollout date of Receivables Capability. 3. All Accounts Receivable cases with incomplete information shall continue to be resolved and converted to ITS at least one (1) month after the rollout but will not exceed (6) six months depending on the volume of A/R to be resolved. B. Conversion Approach 1. A Conversion Team shall be created which will be composed of the following Revenue Officers: Chief, Collection Enforcement Div. Conversion Manager Asst. Chief Coll Enf. Div. NO Conversion Coordinator Asst. Chief LT Coll & Enf Div. LTS Conversion Coordinator Asst. Chief, Collection Div. Regional Conversion Coordinator Asst. Revenue District Officer District Conversion Coordinator Chief, Collection Section District Conversion Unit Head Chief. Collection Enf. Section (LTS) Member Chief. AR Monitoring Sec (NO) Member Chief. AR Monitoring Sec (RO) Member District Seizure Agent (RDO) Member 2. The following offices shall-be responsible for identifying and segregating accounts receivable for conversion based on the following group categories: a) Collection Enforcement Division National Office Account Receivables except Large Taxpayers accounts as herein below described involving basic tax of PhP 1Million and above; Excise Taxpayers Service Accounts Receivables regardless of amounts. b) Collection Division Regional Accounts Receivables including basic tax of Php100,000.01 to PhP999,999.99. aSIDCT c) RDO District Accounts Receivables involving basic tax of PhP100,000 and below. d) Large Taxpayers Service Accounts Receivables of taxpayers under the jurisdiction of LTS regardless of amounts. V. PROCEDURES A. Pre-Conversion Procedures 1. Identify and segregate potentially collectible Accounts Receivable. 2. Determine its assessment date and segregate accounts assessed from 1994 to present. 3. Validate Taxpayer's Identification Number. 4. Ensure an accurate and complete implementation of the conversion of Accounts Receivable according to amounts under Category A, B, C and D as described in part IV (B) (2) above. 5. Prepare a summary of the unresolved Accounts Receivable cases to pursue necessary action. Unresolved cases are those which are lacking in data required in the Conversion Input Form mandatory fields. 6. Ensure an accurate inventory of Accounts Receivable corrected. B. Conversion Procedures 1. Transcribe mandatory information in the Conversion Input Forms (200 cases per case officer). 2. Validate correctness of transcribed information and update if necessary. 3. Encode approved conversion input form using the Account Adjustment Facility of the Taxpayer Accounting System. (TAS) 4. Print Listing (Transaction Listing of TAS) 5. Test Check correctness of encoded information. 6. Update accordingly and as often as necessary. VI. Responsibilities of National, Regional and District Conversion Team A. The Chief, Collection Enforcement Division as Conversion Manager shall : 1. Provide over-all direction to all regarding the Conversion Activities. 2. Resolve all issues and concerns raised by the Conversion Team during the implementation of the conversion plan. B. Asst . Chief, Collection Enforcement Division (CED) Conversion Coordinator of the National Office shall : 1. Review the correctness and completeness of the CIF accomplished by Accounts Receivable Monitoring Section and Analysis Section. 2. Supervise execution of conversion activities in the National Office. 2.1 Update weekly the status column in the A/R Conversion Site Workplan (Annex A) and submit to Information Planning and Quality Service Rollout Assistance Unit (IPQS-RAU) every Monday. 2.2 Submit A/R Conversion Report and the results of verification on Registration (Annex B) to Chief. Collection Enf. Division. 3. Elevate to the Conversion Manager all issues of concern. C. The Chief, Accounts Receivable Monitoring Section, CED shall : 1. Identify dockets with complete information as required by CIF in coordination with the Chief, Warrant Service and Enforcement Section. IEaHSD 2. Fill-in all the information needed in the CIF. 3. Prepare a list of TIN and Branch Code of taxpayers based on reviewed CIF and submit the soft copy of listing to the Computer Operations Network Engineering (CONE) of the concerned Revenue Data Center (RDC). 4. Receive from RDC the results of TIN verification. 5. Encode CIFs of verified registered taxpayers. 6. Furnish Taxpayer Service Section (TSS) of the concerned RDO/ET Assistance Division with the list of unregistered TINs and safekeep list of TINs registered in another RDO for future verification if to be transferred to the proper RDO. 7. Generate list of account adjustments. D. The Asst . Chief, Large Taxpayers Collection and Enforcement Division shall : 1. Review the correctness and completeness of the CIF accomplished by Collection Enforcement Section. 2. Supervise execution of conversion activities of LTs. 1.1 Update weekly the status column in the A/R Conversion Site Workplan (annex A) and submit to IPQS-RAU every Monday. 1.2 Submit A/R Conversion Report and the results of verification on Registration (Annex B) to Chief, Collection Enf. Division. 3. Elevate to the Conversion Manager all issues of concern. E. The Chief, Collection Enforcement Section, Large Taxpayers Collection & Enforcement Div . shall : 1. Identify dockets with complete information as required by CIF. 2. Fill-in all the information needed in the CIF. 3. Prepare a list of TIN and Branch Code of taxpayers based on reviewed CIF and submit the soft copy of listing to ISOS Data Center. 4. Receive from ISOS Data Center the results of TIN verification. 5. Encode CIFs of verified registered taxpayers. 6. Generate list of account adjustments. F. Asst . Chief Collection Division Conversion Coordinator of the Region shall : 1. Supervise and coordinate with the Conversion Coordinator of even District in identifying and resolving conversion issues. 2. Coordinate with the District Conversion Team on conversion activities, time scheduling, procedures to be performed and other issues of concern. 3. Supervise execution of conversion activities in the Regional Office. 3.1 Update weekly the status column in the A./R Conversion Site Workplan (Annex A) and submit to IPQS-RAU every Monday. 3.2 Submit A/R Conversion Report and the results of verification on Registration (Annex B) to Chief, Collection Enf. Division. 4. Review the correctness and completeness of the CIF accomplished by SA of the Region. 5. Elevate to the Conversion Manager all issues of concern. G. The Chief, Accounts Receivable Monitoring Section and Analysis section (RO) shall : 1. Identify dockets with complete information as required by CIF. HcSETI 2. Fill-in all the information needed in the CIF. 3. Prepare a list of TIN and Branch Code of taxpayers based on reviewed CIF and submit the soft copy of listing to the Computer Operations Network Engineering (CONE ) of the Revenue Data Center (RDC). 4. Receive from RDC the results of TIN verification. 5. Encode CIF of verified registered taxpayers. 6. Furnish Taxpayer Service Section (TSS) of the concerned RDO with the list of unregistered TINs and safekeep list of TINs registered in another RDO for future verification if to be transferred to another RDO. 7. Generate list of account adjustments. H. The Asst . Revenue District Officer (ARDO) shall : 1. Ensure an accurate and complete implementation of the conversion of identified Accounts Receivable. 2. Coordinate with the Regional Conversion Coordinator in resolving identified conversion issues. 3. Supervise execution of conversion activities within the district. 3.1 Update weekly the task/activity status column in the A/R Conversion Site Workplan (Annex A) and submit to IPQS-RAU through the Collection Division every Monday. 3.2 Submit A/R Conversion Report (Annex B) and the results of verification on Registration (Annex C) to Chief, Collection Enf. Division. I. The Chief, Collection Section as Conversion Unit Head of the RDO shall : 1. Review the correctness and completeness of CIFs accomplished by Seizure Agent (SA) of the RDO. 2. Submit the soft copy of listing of TIN and Branch Code to the Computer Operations Network Engineering (CONE) of the Revenue Data Center (RDC). 3. Receive from RDC the results of TIN verification. 4. Furnish Taxpayer Service Section (TSS) of the concerned RDO with the list of unregistered TINs and forward the list of registered TINs to District Seizure Agent for encoding of CIFs. 5. Safekeep list of TINs registered in another RDO for future verification if to be transferred to the proper RDO. 6. Verify/check the accuracy of the list of account adjustments. For discrepancy, make the necessary adjustments. J. The District Seizure Agent (SA) shall : 1. Identify dockets with complete information as required by CIF. 2. Fill-in all the information needed in the CIF. 3. Prepare a list if TIN and Branch Code of taxpayers based on reviewed CIFs. 4. Encode CIFs of verified registered taxpayers. 5. Generate list of account adjustments. K. The Computer Operations Network and Engineering (CONE), RDC shal l: 1. Receive soft copy of the List of TIN and Branch Code from AR Monitoring Section (NO), Collection Division (RO) and Collection Section (RDO). 2. Verify thru script if TINs are registered in their respective RDO SCaTAc 4. Classify the verified TINs into registered, unregistered or registered in another RDO and forward the results to the concerned offices. 5. Generate/Print List of Account Adjustments where transaction is limited only to AR Conversion. L. The ISOS Data Center shall : 1. Receive soft copy of the List of TIN and Branch Code from Collection Enforcement Section, Large Taxpayers Collection & Enforcement Division. 2. Verify thru script if TINs are registered. 3. Classify the verified TINs into registered, unregistered or registered in another RDO and forward the results to the concerned offices. 4. Generate/Print List of Account Adjustments where transaction is limited only to AR Conversion. M. The Taxpayers Service Section (TSS) of the District shall : 1. Communicate with unregistered taxpayers (based on the listing given by AR Monitoring Section (NO), A/R Monitoring Section (RR) and District Seizure Agent) and require them to register. 2. Provide the concerned offices with a new list of registered taxpayers for encoding purposes. VII. REPEALING CLAUSE : This Order supersedes all revenue issuances and/or portion thereof inconsistent herewith VIII. EFFECTIVITY This Order shall take effect immediately. EHaDIC (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue