Procedure in the Implementation of Presidential Decree No. 68, Dated November 24, 1972, as Implemented by Revenue Regulations No. 14-72 Dated December 8, 1972, the Subject Matter of which is "Condonation of Delinquent Tax Accounts and Tax Amnesty on Contested Assessments Subject to Certain Conditions"

December 11, 1972 REVENUE MEMORANDUM ORDER NO. 38-72 SUBJECT : Procedure in the Implementation of Presidential Decree No. 68, Dated November 24, 1972, as Implemented by Revenue Regulations No. 14-72 Dated December 8, 1972, the Subject Matter of which is "Condonation of Delinquent Tax Accounts and Tax Amnesty on Contested Assessments Subject to Certain Conditions" TO : All internal revenue officers, employees and others concerned. In order to achieve maximum results in the implementation of Presidential Decree No. 68, dated November 24, 1972 and Revenue Regulations No. 14-72 dated December 8, 1972, the following procedures are hereby prescribed for the guidance of all concerned: I. Preparation and Disposition of Update List of Unpaid Tax Accounts (Delinquency Listings): A. Preparation of Lists 1. The Data Processing Center shall immediately prepare the following lists: a. List of unpaid tax accounts as of November 24, 1972 with amounts of P100 or less, by revenue region; b. List of unpaid tax accounts (clean collectibles as of November 24, 1972 with amounts of more than P100, by revenue district; c. List of protested tax cases as of November 24, 1972 involving amounts of more than P100, by revenue region; d. List of deferred cases as of November 24, 1972 except protested cases, by revenue region; e. List of unpaid accounts of second installment for the years 1967, 1968, 1969, 1970, and 1971 by revenue region; 2. The Accounting Division shall forward a list of dishonored checks as of November 24, 1972 including those dishonored checks from the banks to the Data Processing Center, which shall prepare: a. List of those involving amounts of more than P100, by cities or municipalities; b. List of those involving amounts of P100 or less, by revenue region. B. Disposition of Lists 1. Four (4) copies of the list of unpaid tax accounts as of November 24, 1972 with amounts of P100 or less, including that of protested cases shall be forwarded to the Assessment Branch of Revenue Regional Offices for preparation of Authority to Change Assessment (ATCA); 2. The list of unpaid tax accounts with amounts of more than P100 shall be forwarded to the Revenue District Office for preparation of Notices to taxpayers listed therein; 3. The list of protested cases involving amounts of more than P100 shall be forwarded to the Collection Branches of Revenue Regional Offices for the preparation of necessary Notices to taxpayers; 4. The list of dishonored checks in excess of P100 shall be forwarded to the Collection Agent concerned for preparation of Notices to the taxpayers; 5. The list of dishonored checks in amounts of P100 or less shall be forwarded to the Assessment Branch for preparation of ATCA; 6. The list of deferred cases involving those in court shall be forwarded to the Legal Branch for appropriate action; 7. The list of deferred cases covered by Warrants of Distraint and/or Levy shall be forwarded to the Collection Branch; 8. The list of deferred cases involving transfers of taxpayers with unknown addresses shall be forwarded to the Collection Branch for determination of the present addresses of the taxpayers concerned; 9. The list of second installment unpaid accounts shall be forwarded to the Chief, Assessment Branch for appropriate checking, processing and sending of Notices if they are still unpaid. II. Preparation and Disposition of Unpaid Accounts Already Assessed or Demanded but Not Yet Listed. A. Preparation of List All dockets in the National or Regional Offices which have been assessed and/or demanded but not yet listed; not yet entered in Form 40.00; already entered in Form 40.00 but said form has not yet been forwarded to the Data Processing Center; or which were overlooked in the preparation of Form 40.00 should be compiled and listed and a copy of the list forwarded to the Data Processing Center for processing. B. Disposal of Dockets and Lists. Dockets which are Regional Office cases should be forwarded to the Revenue District Office of origin and those which are National Office cases should be forwarded to the Tax Accounts Division for processing. The lists prepared shall be attached to the dockets sent to the different units. III. Cases Not Covered by the Amnesty. The following cases are not covered by Presidential Decree No. 68: A. Income taxes withheld on salaries and wages of employees by the employer where the latter has not yet remitted the withheld taxes to the bureau; B. Taxes withheld by disbursing officers of government agencies, government owned or controlled corporations under R.A. 1051; C. Income tax withheld at source pursuant to Section 53 of the National Internal Revenue Code which were not remitted to the Bureau of Internal Revenue at the time they became due and are now delinquent as of November 24, 1972; IV. Preparation or Sending of Notices by the Tax Accounts Division and Collection Branches A. As soon as the list of unpaid tax accounts as stated in the preceding paragraphs of this memorandum order which consist of those listed by the Data Processing Center or those assessed or demanded but not yet listed, the Notice to Taxpayer shall be prepared and sent to the taxpayer listed therein. B. The Notices should be sent thru the most expeditious manner available in the locality, personal delivery whenever possible, so that all taxpayers concerned may be informed of their unpaid tax accounts and the concessions granted by Presidential Decree No. 68. V. Suspension of Proceedings or Action A. Delinquent Accounts Which Are Not Protested. Action towards collection thereof shall be suspended until February 28, 1973; instead, the docket pertaining to the account shall be charged to the Collection Branch in the Regional Office or the Tax Accounts Division in the National Office which will inform the taxpayer accordingly. B. Delinquent Tax Accounts Protested. 1. If the protest, reconsideration or reinvestigation has not been finally decided by the Commissioner, action towards the collection of taxes still due thereon shall be suspended until February 28, 1973. 2. In such case, the docket involving the account should be charged immediately to the Collection Branch of the Regional Office concerned or the Tax Accounts Division, as the case may be, so that the taxpayer will be properly informed. C. Delinquent Accounts Protested But Not Yet Resolved. If the resolution of the protest is pending in the Bureau as of November 24, 1972, action on the protest shall be suspended until February 28, 1973; instead the Tax Accounts Division or Collection Branch taking action on the case shall send a letter to the taxpayer. D. Court Cases. As regards delinquent tax accounts which are still the subject of civil action for collection in the ordinary courts or still pending adjudication in the Court of Tax Appeals, or which are on appeal in the Appellate Courts, as of November 24, 1972, proceedings thereon shall be suspended until February 28, 1973. In such case, the Litigation Branch in the National Office or the Legal Branches in Regional Offices shall move for postponement of hearings on the case until after February 28, 1973. The Litigation Division or Legal Branch shall cause the issuance of a letter to the taxpayer. VI. Preparation of Tax Payment Acceptance Order (TPAO) and Acceptance of Payment A. The Notice to taxpayer with attached computation shall serve as authority to prepare the TPAO in places where payment thru banks is prescribed. B. In places where payment thru banks is not prescribed, then the Official Receipt (BIR Form No. 25.24) should be issued. C. If an assessment notice or demand had already been issued on or before November 24, 1972 or a notice of delinquency is presented by a taxpayer who wishes to avail of the provisions of Presidential Decree No. 68, the amount of tax to be collected or paid shall be computed in accordance with the following procedure: The amount of unpaid tax account including surcharge and interest computed from the date of demand and/or assessment up to November 24, 1972 shall be reduced by 40% if paid in full on or before January 31, 1973 or by 20% if paid in full on or before February 28, 1973. To illustrate:1 1. paid on January 31, 1973 The deficiency income tax liability of Jose Santos in 1968 was assessed as follows: Basic Tax Due P200.00 Deficiency Interest 14.00 Total Tax Due P214.00 ======= Date assessment was issued June 15, 1970 Due Date July 15, 1970 Mr. Santos failed to pay the deficiency assessment up to the issuance of Presidential Decree No. 68 on November 24, 1972. If he pays the tax on or before January 31, 1973 and desires to avail of the amnesty, the amount shall be computed as follows: Tax Due on 7/15/70 P214.00 5% surcharge on P200.00 10.00 1% interest from 6/15/70 to 11/24/72 on P214.00 62.13 Total amount due on 11/24/72 P286.13 Less: 40% thereof 114.45 Amount to be paid on or before Jan. 31, 1973 P171.68 ===== 2. Paid on February 28, 1973 If the delinquent account is for the underpayment of C-8 for 1970, demanded on November 15, 1972, as follows: C-8 due 1970 P500.00 C-8 paid 300.00 Deficiency P200.00 25% surcharge 50.00 Total Amount Due P250.00 ====== If the taxpayer pays on February 28, 1973, the amount he shall pay is computed as follows: Tax due including surcharges P250.00 Less: 20% thereof 50.00 Amount to be paid on 2/28/73 P200.00 ====== VII. Cancellation of Accounts A. Unpaid Tax Accounts Condoned. 1. All unpaid tax accounts involving P100 or less shall be cancelled by ATCA to be prepared in the Assessment Branch. 2. Only one ATCA should be prepared for all accounts appearing in the DPC list which shall be distributed in accordance with existing procedures. 3. A copy of the listing should be attached to every copy of the ATCA. 4. In the case of unlisted cases which have been demanded and/or assessed amounting to P100 or less, the listing prepared by the unit of origin should be distributed in the same manner as the DPC listing and corresponding ATCA prepared and distributed in the same manner as accounts of P100 or less listed by DPC. 5. Closing of Docket. The Collection Branch shall request for the dockets of all accounts condoned in the list attached to the copy of the ATCA received by them and said dockets shall be stamped with the following notation: "Closed under Presidential Decree No. 63 ATCA No. _____________ Dated ________________" 6. Filing of Docket. The docket so stamped shall then be sent to the Administrative Branch for file. B. Unpaid tax accounts in excess of P100 which were reduced pursuant to Presidential Decree No. 68. 1. As soon as the reduced amount is paid in full, the docket of the tax case shall be forwarded to the Assessment Branch in Regional Offices or to the Assessment Department in the National Office for preparation of ATCA. 2. The ATCA which cancelled or reduced a portion of the tax account that were condoned under the provisions of Presidential Decree No. 68 shall be distributed in accordance with prescribed procedures. 3. Every case falling under this group shall be covered by one ATCA. C. The Data Processing Center shall close the accounts on the basis of the ATCAs received. VIII. Effectivity. The provisions of this memorandum order are effective immediately and all those concerned are hereby enjoined to follow strictly the provisions thereof. MISAEL P. VERA Commissioner of Internal Revenue A-1 Encl: Annex A Notice & Computation (Over P100 but not exceeding P300,000) Annex B Notice & Computation (Over P300,000) ANNEX A ____________ Date ____________ ____________ ____________ Sir/Madam: This refers to your unpaid delinquent tax account in the amount of P____________ under Assessment/Demand No. ____________ dated ____________. Under Presidential Decree No. 68, dated November 24, 1972, granting tax amnesty to taxpayers with delinquent tax accounts in this Bureau which remain unpaid as of the date of said decree, the unpaid account which shall include the surcharges and interest due up to November 24, 1972 shall be reduced: (1) By 40% if said delinquent tax is paid in full on or before January 31, 1973; (2) By 20% if said delinquent tax is paid in full on or before February 28, 1973; If you decide to avail of the concessions of the said decree, please present this Notice with the attached computation of the tax due to the Tax Accounts Division, National Office, Room 317, 3rd Floor, Finance Building, Manila; to the Collection Branch of the Revenue Regional Office having jurisdiction over your tax case; to the Revenue District Office having jurisdiction over your tax case; or to the Office of the Collection Agent of the City or Municipality where you are residing or holding office for payment or for the issuance of a Tax Payment Acceptance Order (TPAO) if payment of the account has to be made to any authorized bank. Upon full settlement of said account, you shall be free of any civil, criminal or administrative liability related thereto. However, if you fail to avail of the concessions abovementioned, the delinquent tax account shall be collected by court action or summary remedies, or both simultaneously. Meanwhile, other collection proceedings are suspended until February 28, 1973. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue By: ________________ COMPUTATION OF TAX Tax Due P________ ___% Surcharge ________ 1% monthly interest from ________ to November 24, 1972 ________ Amount Due P======== Amount Due: (1) If paid in full on or before January 31, 1973 (reduced by 40%) P======== (2) If paid in full on or before February 28, 1973 (reduced by 20%) P======== ANNEX B __________ Date ____________ ____________ ____________ Sir/Madam: This refers to your unpaid delinquent tax account in the amount of P____________ under Assessment/Demand No. ______ dated ______. Under Presidential Decree No. 68, dated November 24, 1972, granting tax amnesty to taxpayers with delinquent tax accounts in this Bureau which remain unpaid as of the date of said decree, the unpaid account which shall include the surcharges and interest due up to November 24, 1972 shall be reduced: (1) By 40% if said delinquent tax is paid in full on or before January 31, 1973; (2) By 20% if said delinquent tax is paid in full on or before February 28, 1973; Since your unpaid tax account exceeds P300,000, the same, at your option, may be paid in two equal installments, the first to be paid on or before the dates under items (1) and (2), as the case may be, and the second installment not later than May 15, 1973. If you decide to avail of the concessions of the said decree, please present this Notice with the attached computation of the tax due to the Tax Accounts Division, National Office, Room 317, 3rd Floor, Finance Building, Manila; to the Collection Branch of the Revenue Regional Office having jurisdiction over your tax case; to the Revenue District Office having jurisdiction over your tax case; or to the Office of the Collection Agent of the City or Municipality where you are residing or holding office for payment or for the issuance of a Tax Payment Acceptance Order (TPAO) if payment of the account has to be made to any authorized bank. Upon full settlement of said account, you shall be free of any civil, criminal or administrative liability related thereto. However, if you fail to avail of the concessions abovementioned, the delinquent tax account shall be collected by court action or summary remedies, or both simultaneously. Meanwhile, other collection proceedings are suspended until February 28, 1973. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue By: _________________ COMPUTATION OF THE TAX Tax Due P________ ___% Surcharge ________ 1% monthly interest from _____ to 11/24/72 ________ Amount Due P======== Amount Due: (1) If paid in full on or before Jan. 31, 1973 (reduced by 40%) P======== If paid in full on or before Feb. 28, 1973 (reduced by 20%) P======== [To be accomplished by a taxpayer with an unpaid delinquent tax account of more than P300,000 who exercises the option to pay by installments] I hereby elect to pay the above amount in two installments as follows (Please indicate date of payment by checking appropriate box): [] First half of amount in No. (1) above if paid on or before January 31, 1973 P________ [] First half of amount in No. (2) above if paid on or before February 28, 1973 P________ Second half of either amount due on or before May 15, 1973 P======== ______________ Signature _______________ Name of Taxpayer ________________ Address _________________ Taxpayer Account No