Issuance of Warrant of Distraint and Levy and/or Garnishment

October 22, 1962 REVENUE MEMORANDUM ORDER NO. 54-62 SUBJECT : Issuance of Warrant of Distraint and Levy and/or Garnishment TO : Revenue Operations Head (Assessment), Chief, Delinquent Accounts Division, Chief, Records Control Section, Regional Directors, Chiefs, Accounting Machines Branches, Chiefs, Collection Branches, Provincial Revenue Officers, Collection Agents and Others Concerned In order to avoid erroneous issuance of warrant of distraint and levy against any taxpayer for previous tax deficiency assessments, the following steps should be taken preparatory to the summary procedures prescribed by Sections 317 to 330 of the National Internal Revenue Code, viz: A. As stated in the two form letters now being used by the National Office in transmitting to the Regional Directors copies of the letters of demand and/or assessment notices issued by the National Office, the follow-up of such cases for collection, irrespective of amounts involved, is the function of the Collection Branch of each region as in the case of letters of demand and/or assessment notices issued by the Regional Office. In other words, the follow-up of assessments and demands issued by both the Regional and National Offices is the function of the Collection Branch. cdlex 1. National Office . When a letter of demand and/or assessment notice is prepared in the National Office copies thereof should be furnished: (a) The Regional Director of the Region where the place of business or residence of the taxpayer is located; (b) The Chief of the Accounting Machines Branch of the said region; (c) The Chief of the Collection Branch of the same region; (d) The Collection Agent of the City or Municipality concerned; (e) The Chief, Records Control Section should see to it that these corresponding copies are sent to the Regional Director with the usual covering letter; (f) The fact, that copies of such demands and/or assessment notices are actually sent to the Regional Director with the covering letter should be shown on the docket; 2. Regional Office When the letter of demand and/or assessment notice is prepared in the Regional Office, the distribution of the copies thereof shall be as follows: (a) A copy of the letter of demand and/or assessment notice involving any taxpayer should be furnished the Chief, Accounting Machines Branch, Chief, Collection Branch and Collection Agent for the municipality or city where the taxpayer is residing or having his business. In forwarding these copies to the Chief, Accounting Machines Branch, Chief, Collection Branch and Collection Agent concerned a mimeographed acknowledgment receipt with a blank space provided for the signature of the receiving Chief, Accounting Machines Branch, Chief, Collection Branch and Collection Agent should invariably be sent along with such copies, with the instruction that upon receipt of such copies the duly signed acknowledgment receipt should be sent to the Chief, Administration Branch who shall attach the same to the docket of the case. (b) To insure the mailing or delivery of such copies of the letters of demand and/or assessment notices to the Chief, Accounting Machines Branch, Chief, Collection Branch and Collection Agent, the Chief, Administrative Branch should take a hand in the actual mailing or delivery of such copies to the parties concerned instead of entrusting this particular work to his clerks who may not be as assiduous as the Chief, Administrative Branch; (c) Copies of such letters of demand and/or assessment notices should be furnished the Chief, Accounting Machines Branch in order that the accounting cards thereof may be prepared for submission to the National Office. The Chief, Accounting Machines Branch of Regional District No. 3, Manila, is not required to submit the account cards to the National Office; (d) The Collection Agent concerned should submit report of collection made on account of any deficiency assessment, as herein above indicated, to the Chief, Collection Branch who in turn should requisition the corresponding docket of the case for the Chief, Administration Branch for notation of payment, the Chief, Collection Branch, receiving the report and evidence of payment of any such deficiency assessment should in turn inform the Chief, Accounting Machines Branch in order that the payment may be posted in the corresponding account card previously prepared and the case is considered closed. (e) If for any reason, report of payment of such deficiency or the evidence of such payment is erroneously submitted to any branch in the region other than the Chief, Collection Branch, the Chief of the Unit receiving such report and evidence of payment should forward the same to the Chief, Collection Branch and the Chief, Accounting Machines Branch for posting of the payment and the eventual elimination of the taxpayer concerned from the list of unpaid accounts. (f) The Chief, Administrative Branch, upon receipt of a copy of this Revenue Memorandum Order should go over all the dockets of cases on which efficiency assessments have been released and find out whether the Chief, Collection Branch, Chief, Accounting Machines Branch and the Collection Agent concerned have been furnished with copies of the deficiency assessment notice and/or letters of demand. If a docket indicates that copies thereof where furnished the various units wherein mentioned but there is no record of such copies having been actually mailed or delivered to the different units referred to above, the Chief, Administrative Branch should prepare the corresponding copies of the letters of demand and/or assessment notices and furnish copies thereof to the units concerned for corresponding action as above indicated. casia B. Coordinated action in the meanwhile should be taken by the Chief, Collection Branch and the Collection Agent towards the Collection of the amounts indicated in their respective copies of the letters of demand and/or assessment notices. The Chief, Administrative Branch of the region holding likewise a copy of the letter of demand and/or assessment notices should see to it that upon the expiration of the date specified therein on which the tax should be paid, the Chief Collection Branch is advised to take the necessary steps toward the collection thereof by distraint and levy, unless the National Office or the Income and Business Tax Branch informs the Chief, Collection Branch that the previous assessment or demand is being contested, or that a bond to secure the payment thereof has been filed and approved; C. Step by Step in the Issuance of Warrant of Distraint and Levy . 1. As a rule warrants of distraint and levy and/or garnishment to enforce the collection of internal revenue tax demanded and/or assessed by the National Office shall be issued by the National Office subject to the following conditions: (a) Where the Regional Director determines that in the collection of delinquent account a warrant of distraint and levy and/or garnishment must be issued to enforce the collection and/or stop the running of the statute of limitation, be should so recommend in writing addressing his request to the Revenue Operations Head (Collection), Attention: Chief, Delinquent Accounts Division. If the docket of the case happens to be in the Regional Office the same should be attached to the request and sent by registered mail; (b) Upon receipt of such request and if found in order the docket of the case, if not attached, will be secured from the Records Control Section and the warrant of distraint and levy and/or garnishment will be prepared by the Chief, Delinquent Accounts Division for the signature of the Commissioner of Internal Revenue or Deputy Commissioner of Internal Revenue, depending upon the amount involved, in accordance with Memorandum Order No. V-862. Such warrant, if prepared should be attached to the docket of the case to be released with a letter addressed to the Regional Director with the instruction to execute the same. The docket of the case shall be retained in the Records Control Section. (c) The warrant of distraint and levy and/or garnishment should then be executed in accordance with Sections 317 to 330 of the National Internal Revenue Code; (d) Thereafter, the follow-up of the case will continue to be the responsibility of the Chief, of the Collection Branch; (e) If for any valid reason the execution of the warrant of distraint and levy and/or garnishment should not be carried out and civil action shall be instituted in lieu thereof, the same procedure outlined above for other cases shall be followed; (f) Upon the termination and closing of the case, the docket shall be returned to the Regional Office, if the same has been previously forwarded to the National Office, to serve as reference in the investigation of the same taxpayer, or as a sort of information in the investigation of other taxpayers. 2. In cases of deficiency tax assessments where the letters of demand and/or assessment notices have been issued by the Regional Office, the following procedures shall be followed: (a) The docket or the records of the case should be available in the Regional Office and the same examined as to whether the circumstances of the case warrant the issuance of a warrant of distraint and levy and/or garnishment; (b) Warrants of distraint and levy and/or garnishment for cases involving amounts not exceeding P10,000.00 shall be issued by the Regional Director for the Commissioner of Internal Revenue and this Office should be advised of such action within 48 hours after issuance thereof; (c) Whenever the Regional Office finds it necessary to issue warrants of distraint and levy and/or garnishment to enforce the collection of accounts not exceeding P10,000.00 a prior verification should be made from the Collection Agent for the City or municipality indicated as the place of business or residence of the taxpayer in the letter of demand and/or assessment notice, as well as from the Accounting Machines Branch of the region as to whether the amount due has not really been paid; (d) Before the issuance of the warrant of distraint and levy and/or garnishment the Regional Director should first send a letter to the Taxpayer concerned about the settlement of his case in a form letter which should substantially be as follows: Date ____________ Mr. or Mrs. ___________ ____________________ Thru the Collection Agent ____________________ (City or Municipality) Sir/Madam: In order to complete our records kindly indicate by a check mark on the proper space below the status of the case involving the amount of P __________ as __________________ due from you, (1) I have paid this amount under Official Receipt No. ________________ dated _____________ at ________________. I have not as yet paid the above-mentioned amount. Very truly yours, __________________ Signature of Taxpayer Certified correct: ______________________ (Collection Agent) (e) Upon accomplishment of the above form letter the same should be returned immediately by the Collection Agent to the Regional Office, Attention: Chief, Collection Branch for corresponding action; (f) Warrants of distraint and levy and/or garnishment issued by the Regional Office should be serially numbered and recorded in a Log Book to be maintained by the region, c/o Chief, Collection Branch. (g) The procedures outlined for deficiency assessments made by the National Office as indicated above should be followed thereafter. D. It is also desired that in every case for which a warrant of distraint and levy and/or garnishment has been issued and served upon the taxpayer or his representative, a progress report of the action taken thereon together with a descriptive list of properties distrained and/or levied upon should be submitted to the Commissioner of Internal Revenue immediately. casia E. Strict adherence to this Revenue Memorandum Order is hereby enjoined. F. Copies of this Revenue Memorandum Order, which takes effect immediately and supersedes all other orders or circulars inconsistent herewith, should be furnished all parties concerned. SGD. JOSE B. LINGAD Acting Commissioner of Internal Revenue