Modifying and Consolidating the Procedures in Receiving, Handling and Processing of All Tax Returns by the Collection and Document Processing Sections of the Revenue District Office

June 3, 1994 REVENUE MEMORANDUM ORDER NO. 55-94 SUBJECT : Modifying and Consolidating the Procedures in Receiving, Handling and Processing of All Tax Returns by the Collection and Document Processing Sections of the Revenue District Office TO : All Internal Revenue Officers and Others Concerned I. Objectives This Order is issued to: A. State the revised delineation of functions of the Collection and Document Processing Sections in the Revenue District Office in receiving, handling and processing of all tax returns and ATAPs. B. Provide a uniform and efficient system and procedures for receiving, handling and processing of all tax returns by the Collection and Document Processing Sections of the Revenue District Office. II. Policy Guidelines A. Collection Section (CS) 1. Responsible for receiving directly all 1701A and 1701C without cash/check payment and those to be paid through a tax debit memo (TDM) either fully or on second installment as provided for in RMOs 43-91, 5-92, 12-92. It shall also receive the monthly VAT returns without cash/check payment or to be paid fully through a TDM as provided for in Revenue Regulations 5-93. 2. Direct the taxpayer, however, to an accredited bank within the district or to the Collection Officer (CO)/deputized Municipal Treasurer in places where there are no accredited banks if those kinds of returns as enumerated above are filed late or are out of district and the taxpayer is willing to pay the corresponding penalties at the time of filing. 3. The Section Head shall be responsible for the requisition of blank Authority to Accept Payment (ATAP)/Authority to Accept Payment of Excise Tax (ATAPET) forms through the Administrative Section. 4. The Section Head shall also be responsible for the maintenance of a permanent record book for unissued ATAPs/ATAPETs indicating the following: a. name of requisitioning Collection Officer b. date of requisition c. serial numbers of requisitioned blank form d. number of pads requisitioned 5. Prepare ATAPs for approval of the Revenue District Officer (RDO) or his duly authorized representative for the second installment payments of 1701 and 1701A returns on or before July 15. 6. Prepare an ATAP/ATAPET for approval of the RDO or his duly authorized representative to be presented to an accredited bank or to the Collection Officer (CO)/deputized Municipal Treasurer in places where there are no accredited banks for payment of taxes that do not require tax returns, e.g. documentary stamp tax, deficiency taxes, excise tax on liquor, etc. The taxpayer shall be required to furnish Collection Section (CS) with a photocopy of the validated ATAP/ATAPET as proof of payment. Note: a. Refer taxpayer to Registration and Regulatory Section (RRS) for the computation of the correct excise tax before the preparation of ATAPET. b. Request the taxpayer to furnish RRS with a photocopy of the validated ATAPET. c. Use the regular ATAP (BIR Form 2319A), in case ATAPET (BIR form 2319A-E) is not available, by indicating the words EXCISE TAX above the form number of follows: EXCISE TAX BIR Form 2319A 7. Maintain a logbook of ATAPs/ATAPETs issued to taxpayers. 8. Transmit all returns, whether received directly from the taxpayer or from accredited banks, in required batches with the corresponding batch control sheet (BCS) report undisturbed and intact to the Document Processing Section after recording pertinent data of collection in the BCS Register. 9. Furnish the CS of another district, an advance photocopy of the BCS-A report where this district has taxable returns/ATAPs/ATAPETs on the following day from receipt. B. Document Processing Section (DPS) 1. Responsible for transmitting these out-of-district returns/ATAPs/ATAPETs to the revenue district office concerned not later than three (3) working days from receipt. 2. Continue to receive directly the annual information returns of taxes withheld (BIR Form 1743IR/1745A). 3. Responsible for segregating the tax returns received from the CS according to kind of tax (i.e. income tax, VAT, non-VAT, withholding tax, excise tax and other kinds of tax). 4. Maintain ledger cards and provide folders or envelopes for filing 1701, 1702, 1702A-1, 1704 ITRs, VAT returns, non-VAT returns, withholding tax returns and excise tax (BIR Form 2223) ATAPET (BIR Form 2319A-E) returns only. Ledger cards are not required to be maintained for 1701A and 1701C returns as well as those kinds of tax returns not mentioned here but these must be filed by sub-classification/kind of BIR Form in alphabetical order. 5. Its Section Head shall be the custodian of the Ledger Books where the name of taxpayer and DLN are recorded for 1701, 1702, 1702A-1 and 1704 returns only, as well as for the manual masterlists of taxpayers generated by the Section for income tax, VAT, non-VAT, withholding tax and excise tax. 6. Forward encoded diskettes with back-up diskettes of the masterlists of taxpayers to the Administrative Division (AD) for safekeeping. 7. Give priority to the processing of refundable returns over other kinds of income tax returns (ITRs) as provided for in RMO 39-94. 8. Transmit not later than May 15 1701 and 1701A ITRs with second installments to the CS for collection. 9. Indicate the same DLN that was used in a tentative return in numbering an amended return. 10. Prepare a "Monthly Summary of Tax Returns" as amended (Annex D) in three (3) copies to be distributed as follows: Original - Statistical Analysis Division Duplicate - Information Systems Operations Service (ISOS) Triplicate - File copy III. Procedures A. Collection Section (CS) For returns without payment in cash or check or to be paid fully through a TDM: 1. Returns Received Directly: a. Receive from the taxpayer properly accomplished tax returns in triplicate; b. Check completeness of tax returns and release duplicate to taxpayer; c. Batch returns into 25 or less and prepare in three (3) copies BCS-B for each batch of returns received during the day and number these BCS-Bs in accordance with RMO 31-91; d. Record pertinent information in the BCS Register; e. Maintain a separate BCS Register for these returns received directly; f. Forward to: (1) ISOS - Original BCS report/returns (2) Document Processing Section - Duplicate of BCS report/triplicate of returns; (3) Collection Section - Triplicate of BCS 2. Returns/ATAPs/ATAPETs received through the accredited banks and CO/deputized Municipal Treasurer in places where there are no accredited banks: a. Receive BCS-B reports with corresponding tax returns/ATAPs/ATAPETs; b. Stamp "Received" and initial copies of BCS reports and indicate the date of receipt; c. Check the completeness and correctness of the reports/documents received; Note: Complete/correct reports must conform to the following requirements: (1) Triplicate copies of the returns have complete information on the space provided for tins or a notation that TIN is still in process and signed by the RDO or his authorized representative; (2) The returns are machine validated if there are payments made; (3) BCS reports bear the required data such as; . name/address of bank . bank code number . BCS number . date of collection . date of preparation (4) All taxpayers listed on the BCS reports have corresponding tax returns/ATAPs; and (5) BCS reports submitted are signed by the concerned bank personnel. For returns/ATAPs/ATAPETs with Payment in Cash or Check: 3. Return/ATAPss/ATAPETs received through accredited banks: a. Receive BCS-As with corresponding returns/ATAPs/ATAPETs; b. Stamp "Received" and initial copies of the BCS reports and indicate the date of receipt; c. Send advance photocopy of BCS-A to CS of concerned district for out-of-district taxable returns/ATAPs/ATAPETs that are with the others in the batch for follow-up of said documents with the district where the documents were actually filed; d. Check the completeness and correctness of the reports/documents received; e. Record pertinent information of returns/ATAPs/ATAPETs by kind of tax in the BCS Register which shall become the basis for the 12.09 Collection Report; f. Exclude recording of collection data for out-of-district returns/ATAPs/ATAPETs in the BCS Register to prevent the occurrence of double reporting of collection; g. Forward BCS-A with triplicate copies of tax returns/ATAPs/ATAPETs to DPS undisturbed and intact; 4. Returns/ATAPs/ATAPETs received through the CO/deputized Municipal Treasurer. a. Observe the same steps as III.A.3 above; b. Forward to: ISOS - Original BCS-A report/returns/ATAPs/ ATAPETs of those received by the COs Document Processing Section - Duplicate BCS-A/ triplicate returns/ATAPs/ATAPETs Collection Section - File copy of BCS; In General: a. Maintain for each bank branch or Office of CO/Deputized Municipal Treasurer in places where there are no accredited banks, a Register of BCS Reports received; b. Apportion BCS Register into the following for: (1) BCS-B Annex A1 (2) BCS-A (Income Tax) Annex A2 (3) BCS-A (VAT) Annex A3 (4) BCS-A (Non-VAT) Annex A4 (5) BCS-A (Withholding Tax) Annex A5 (6) BCS-A (Excise Tax) Annex A6 (7) BCS-A (Other Taxes) Annex A7 c. Prepare monthly NPCS Exception Report and Batch Discrepancy Report in four (4) copies to be distributed as follows: NPCS Exception Report: Original - Collection Programs Division (CPD) Duplicate - Bank Head Office (through CPD) Triplicate - ISOS Quadruplicate - File copy Batch Discrepancy Report: Original - Revenue Accounting Division (RAD) Duplicate - Bank Head Office (through RAD) Triplicate - ISOS Quadruplicate - File copy; d. Receive 1701/1701A ITRs with second installments from the DPS for collection and send reminder letters not later than June 15; e. Prepare ATAPs for payment of 1701/1701A second installments; f. Prepare ATAPETs for payment of excise tax; g. Maintain a logbook for ATAPs/ATAPETs issued reflecting the following information; (1) ATAP/ATAPET serial number (2) name of taxpayer (3) amount payable (4) date issued (5) date of receipt of triplicate copy from accredited banks/CO/deputized Municipal Treasurer (6) amount paid (7) bank concerned h. Segregate 1701/1701A ITRs with second installments into those that have been paid from those that have remained unpaid and forward all to the DPS not later than August 15; A. Document Processing Section (DPS) 1. In General : a. Receive BCS-Bs and BCS-As with the corresponding triplicate tax returns from the Collection Section; b. Cross-check the tax returns with the BCS for correctness and completeness of reports/documents received; c. Except for the Income Tax Returns (ITRs), number the other tax returns/ATAPs in a batch before segregating and sorting by kind of tax and type of return as follows: Bank Branch Code - BCS Number - Line of Taxpayer in BCS d. Segregate out-of-district tax returns; e. Prepare transmittal list for out-of-district returns/ATAPs received during the week indicating therein the bank branch code and the BCS number of the batch where the tax returns were taken and attach corresponding tax returns/ATAPs, not later than three (3) working days from receipt; f. Segregate the returns from the ATAPs/ATAPETs. Sort the returns according to kind of tax: Income - BIR Forms 1701, 1701Q, 1701A, 1701C, 1702, 1702Q, 1702A-1, 1704 VAT/Non-VAT - BIR Forms 2550, 2550A, 2529A-Q, 2551, 2001 Withholding Tax - BIR Forms 1743-W, 1745, 750A Excise Tax - BIR Form 2223 Others - BIR Forms 1701E, 1701E-1, 1701E-2, 1701E2-1, 1801, 1805 g. Segregate BIR Form 2319A (ATAP) from BIR Form 2319A-E (ATAPET); h. File ATAPs sequentially according to serial numbers; ATAPETs according to industry and product line; 2. Income Tax : a. Classify the ITRs into: (1) Individual (including estates and trusts) - BIR Forms 1701, 1701Q, 1701A, 1701C (2) General Professional Partnership - BIR Form 1704 (3) Corporations - BIR Forms 1702, 1702Q, 1702A-1 b. Sub-classify ITRs into: (1) taxable (a) taxable break-even (b) taxable collectible Note: Segregate taxable collectible returns with second installment. (2) exempt (3) refundable (a) refundable taxable (b) refundable exempt c. Segregate 1701A returns with gross compensation of P60,000 and below provided that tax due equals tax withheld and transmit to AD for safekeeping; d. Alphabetize all other ITRs after segregation and sorting; e. Number triplicate of ITRs following the guidelines in RMO 9-91 as amended by RMO 39-94; f. Transmit 1701/1701A ITRs with second installment to CS for collection; g. Record the name of taxpayer and DLN in the Ledger Book for 1701, 1702, 1702A-1, and 1704 ITRs only; Example: Name of Taxpayer DLN ABC Corporation 47-14-93-000001 h. Record the necessary information in the ledger cards (Annex B1) before filing these returns in the respective folders or envelopes; i. File folders or envelopes by sub-classification (i.e. taxable break even, taxable collectible, refundable, etc.) for ITRs only enumerated in step III.B.2.g above. j. Transfer data from ledger cards to worksheet (Annex C1) and input said data into the computer which shall be the basis for the Masterlist of Taxpayers and updating such list by identifying stop-filers/non-filers; k. Keep on file photocopies of 1701, 1702, 1702A-1 and 1704 ITRs only before releasing these documents for the issuance of Letters of Authority or other official reasons; l. Observe the same steps as III.B.2.g to III.B.2.k under Income Tax for ITRs with second installment originally transmitted to CS for collection. m. Transmit all 1701/1701A ITRs with second installment that have remained unpaid to the Assessment Section for the preparation of the BIR Form 1717 and compliance with existing regulations in making an assessment within fifteen (15) days from receipt; n. Forward triplicate copies of 1701A and 1701C to Assessment Section for pre-audit giving priority to refundable returns over other types of ITRs; o. Prepare transmittal list of pre-audited perfect refundable 1701A and 1701C returns in three (3) copies indicating therein the names of taxpayers and the corresponding DLNs; attach original copy of transmittal list to the triplicate copies of pre-audited perfect refundable 1701A and 1701C returns; Original - ISOS Duplicate - RDO Triplicate - File copy p. Transmit triplicates of pre-audited perfect taxable break-even or exempt 1701A and 1701C returns to AD for safekeeping and future reference; retain duplicate copy of transmittal list for file; q. Keep on file all ITRs except for the triplicates of pre-audited perfect taxable break-even or exempt 1701A and 1701C; and 1701A P60,000 and below where the tax due equals the tax withheld; 3. VAT : a. Sort returns according to economic activity (i.e. Vm. Vc, Vt, Vb, etc.); b. Alphabetize and record in ledger card (Annex B2) before filing in the respective folders/envelopes; c. Transfer data to worksheet (Annex C2) and input said data into the computer which shall be the basis for the Masterlist of Taxpayers and updating of the list by identifying the stop-filers/non-filers; d. Keep returns on file for future reference and audit. 4. Non-VAT : a. Sort returns according to kind of tax (i.e. 3%, 5% GRT, Insurance Premium Tax, etc.) b. Observe the same steps as III.B.3.b to III.B.3.d under VAT above; 5. Withholding Tax : a. Sort returns according to kind of BIR Form on withholding tax (i.e. 1743W, 750AV and 1745) and file by withholding agent; b. Receive directly BIR Form 1743IR and 1745A filed in triplicate by withholding agent; c. Forward original of 1743IR and 1745A with transmittal sheet (BIR Form W-6) to ISOS. Also furnish BIR Form W-6 to Withholding Agents Monitoring Division; d. Observe the same steps as III.B.3.b and III.B.3.c under VAT above; e. Transmit returns/annual information returns on taxes withheld to Assessment Section for pre-audit; f. Keep pre-audited perfect returns on file. 6. Excise Tax : a. Sort returns/ATAPETs according to industry (i.e. minerals, oil products, alcohol, petroleum products, manufacturer/assembler of automobiles, etc.); b. Sub-classify returns/ATAPET into product lines per industry: Example: Minerals a. metallic b. non-metallic Oil Products a. premium b. diesel Alcohol Products a. distilled spirits b. wines c. fermented liquors Etc.; c. Observe the same steps as III.B.3.b to III.B.3.d under VAT above; 7. Other Taxes a. Segregate returns from ATAPs; b. File ATAPs sequentially according to the serial number; c. Sort returns according to kind of tax (i.e. 1701E, 1701E-F, 1701E2-I, 1801, 1805, etc.); d. Keep returns according to kind of tax and ATAPs arranged sequentially on file. IV. REPEALING CLAUSE Portions of Revenue Memorandum Order 38-94 and all other issuances and/or portions thereof inconsistent herewith are hereby repealed and amended accordingly. V. Effectivity This Order shall take effect upon approval. LIWAYWAY VINZONS-CHATO Commissioner ANNEX A1 ANNEX A2 ANNEX A3 ANNEX A4 ANNEX A5 ANNEX A6 ANNEX A7 ANNEX B1 ANNEX B2 ANNEX B3 ANNEX B4 ANNEX D