Waiver of Surcharges and Criminal Prosecution in Case of Voluntary Disclosure

September 10, 1962 REVENUE MEMORANDUM ORDER NO. 50-62 SUBJECT : Waiver of Surcharges and Criminal Prosecution in Case of Voluntary Disclosure TO : All Internal Revenue Officers and Others Concerned In connection with the intensification of the collection of internal revenue taxes, it is believed that taxpayers deserve another opportunity to report and pay their taxes correctly. In view thereof, any taxpayer who shall voluntarily disclose his correct tax liability on or before November 30, 1962 shall not be prosecuted, nor surcharges prescribed in Section 72 of the Tax Code be imposed on taxes assessable against him. A voluntary disclosure occurs where a taxpayer of his own free will and accord, and before an investigation is initiated against him, reveals his true tax liability, or corrects his return in order to pay the taxes really due from him. There is no special form for making the disclosure. Of course, it is better to present an amended return or other written statement which is adequate for computing the correct tax liability. If possible, the disclosure should be accompanied by payment of the tax which is known to be due, but this is not a prerequisite. In order to be considered voluntary, a disclosure must be made before an investigation is initiated on the case. An investigation is initiated when an internal revenue officer is assigned a return for examination or where an investigating officer has requested information with respect to the filing of a return or the payment of taxes by a taxpayer. Where a disclosure is made either by the filling of an amended return or by ordinary correspondence, the internal revenue officer receiving the same shall immediately refer the matter to the Regional Director or Commissioner who shall cause the immediate computation of the tax and collection thereof. Any tax thus computed shall include the statutory interests but exclusive of surcharges. No amount shall be demanded by way of compromise, except the nominal amount of P5.00 for failure to file a return. If the taxpayer making the disclosure is not ready to pay the tax, he may be allowed to pay in installments. Should the tax, or any installment, be not paid within the period agreed, the entire amount of the tax remaining unpaid shall be collected. After November 30, 1962, all persons violating internal revenue laws and defrauding the Government of its lawful revenue are liable for prosecution, depending upon the gravity of the offense. All internal revenue officers are enjoined to give this Order as much publicity as possible. aisadc This Order takes effect immediately. (SGD.) JOSE B. LINGAD Acting Commissioner of Internal Revenue APPROVED: (SGD.) RODRIGO D. PEREZ Acting Secretary of Finance