Procedure in Implementing R.A. 2070 as Further Amended by R.A. 5268 Regarding the Processing of Tax Census Statements and the Preparation of National Tax Register

November 16, 1970 REVENUE MEMORANDUM ORDER NO. 62-70 SUBJECT : Procedure in Implementing R.A. 2070 as Further Amended by R.A. 5268 Regarding the Processing of Tax Census Statements and the Preparation of National Tax Register TO : All Regional Directors and others concerned In order to insure an effective control and uniform method in the processing of tax census statements which shall be received in all internal revenue offices and to comply strictly with the provisions of R.A. 2070 as further amended by R.A. 5268 regarding the preparation and updating of the national tax register, the following procedure shall be followed by all Regional Directors and others concerned: I. Processing of Tax Census Statements A. Receipt and Transmittal of Statements All tax census statements which shall be filed must be received in all offices of the revenue district officers, collection agents, Tax Register Division and other offices which may be assigned to receive the same. These statements as well as all the attachments thereto should bear the stamp or notation of the date the statements were filed in said offices. All tax census statements received in the National Office shall be transmitted to the Tax Register Division. Those received by the Collection Agents shall be transmitted to the Regional Offices under whose jurisdiction they belong. Those offices which may be designated to assist during the filing period shall also transmit the statements filed with them to their respective Regional Offices. All statements must be bundled into 100 each and accompanied by a block control sheet prepared in duplicate (Annex A). This must be done in all internal revenue offices in the region which will receive the tax census statements. The law provides that the Collection Agents shall retain one (1) copy of the tax census statement and shall transmit the original and one (1) copy of the statement to the Regional Director who shall in turn send the original to the Commissioner of Internal Revenue. Instead of retaining one copy, the Collection Agents and other officers concerned shall transmit all three copies to the unit to be created for the purpose in the Regional Office which shall take charge of processing the statements. The Regional Director shall create a temporary unit from the personnel of the different offices of his region which shall be charged with the processing of the tax census statements. This Unit shall be abolished after the completion of its job. Thereafter, the processing of the tax census statements to be filed subsequently by new tax census filers shall be done in the Revenue District Offices. B. Sorting and Numbering of Tax Census Statements All tax census statements transmitted to the Tax Register Division shall be sorted thereat by segregating the tax census statements of the individuals, partnerships and corporations and classifying them according to Revenue Region. The basis or reference of classifying these statements shall be the legal residence or business address of the declarant. After sorting, the Tax Register Division shall immediately transmit the tax census statements to the office of the Regional Director of the region concerned accompanied by the corresponding block control sheet showing the name and address of the filer. The original transmittal should accompany the bundle and the duplicate thereof should be retained as file copy. All the census statements received and transmitted to the Regional Offices must be processed immediately. The tax census statements shall be sorted by individuals, partnerships and corporations according to Revenue Region as done by the Tax Register Division. The out-of-region tax census statements shall be transmitted immediately to the Revenue Region concerned accompanied by a block control sheet prepared in duplicate. The tax census statements pertaining to a particular Revenue District Office as segregated according to individuals, partnerships and corporations shall be numbered and bound by the thousand. The number of each statement shall be in triplicate. There is a symbol for each particular classification as to whether it is an individual, partnership or a corporation and preceded by the number of the district (Please see attached Annex B). The symbols that shall be used are as follows: I Individual P Partnership C Corporation Thus, Nos. l, 2, 3, etc. shall be used to identify the number of a particular Revenue District Office which, in this case, is Revenue District No. 1, Revenue District No. 2, Revenue District No. 3, respectively, and so forth up to Revenue District No. 93. The next three digits shall be used to identify the number of thousands of tax census statements. Thus 001 represents the first thousand; 002 as the second thousand; 003 as the third thousand, and so forth and so on. The last three digits shall be used to designate the number of the tax census statements in any group or bundle of thousand. It begins with 001 then 002, 003 and so on and up to the last number to complete one thousand which shall be 001-000. Thus in Revenue District Office No. 26, Quezon City, the first tax census statement of an individual shall bear the following number: 26-I-001-001 The last statement in the first one thousand of tax census statements shall be numbered 26-I-001-000. All the tax census statements, therefore, shall be bound by thousand, one binding for the original copies, one for the duplicate copies and another for the triplicate copies for individuals, partnerships or corporations to be placed together and sorted as one classification and shall be distributed as follows: cd 1. Original Data Processing Center 2. Duplicate Revenue Region (Administrative Branch) 3. Triplicate Revenue District Officer C. Listing of Tax Census Statements 1. From the original tax census statements transmitted to the Data Processing Center, there shall be prepared alphabetical IBM listings of tax census statements in the following forms: a. Over-all national alpha-listing b. Over-all alpha listing by region c. Over-all alpha listing by district 2. The Data Processing Center shall make the following distributions of the listings: a. To the Tax Register Division (1) The original copies of the tax census statements (2) The original IBM alphabetical listing of tax census statements b. To the Regional Offices Duplicate IBM listing of the tax census statements of 1-b and 1-c c. To the Revenue District Offices Triplicate IBM listing of tax census statements of 1-c. II. Responsibilities and Functions of Offices Concerned A. Regional Offices The responsibility for the processing of tax census statements shall be vested on the Regional Directors. Processing as described earlier should start as soon as the statements are received. The Regional Offices shall utilize the services of the available personnel under their supervision. As provided for by R.A. 2070 as further amended by R.A. 5268, every Regional Director in Regional District shall keep and maintain an appropriate national tax register of the persons residing in his jurisdiction with corresponding subsidiaries for each inspection district based upon the data and information given in the statement required in Section one hereof and from other sources. In this connection, every revenue examiner, shall upon receipt of an authority to conduct a package audit of the books of accounts and other related business records of any taxpayer in order to determine accurately his tax liabilities, shall utilize the tax census statements and/or the latest updated national tax register as his reference or aid in his/her investigation. Likewise, all revenue examiners assigned in the regional and national offices shall make the latest updated national tax register as a reference or aid while conducting the investigation. They shall also prepare or accomplish in triplicate an updated tax register form after the investigation of every tax case is terminated. This set of national tax register shall contain the additional data as required in the tax register form. Where the investigation is at the national level, all the three copies of the national tax register as accomplished shall be attached to the Field Audit Report upon the termination of the investigation and before it is forwarded for approval. If approved, the docket together with the three copies of the tax register shall be forwarded to the Records Control Division which shall take charge of the distribution of the copies of the tax register. The original should be forwarded to the Tax Register Division, the duplicate to the Regional Office and the triplicate to the Revenue District Office. For investigations conducted at regional and district level, the same procedure should be followed. After the report has been approved, the original tax register as updated shall be forwarded to the Tax Register Division, the duplicate to be retained at the Revenue District Office and the triplicate to be attached to the docket of the case which will finally go to the Administrative Branch. All updated tax registers as prepared in the Assessment Branch shall follow the same procedure, the original to the Tax Register Division, the duplicate to the corresponding Revenue District Office and the triplicate with the docket of the case. No field audit report and letter of confirmation shall be acted upon by any superior officer without the corresponding national tax register duly accomplished. The Revenue District Offices shall use the IBM listing of the tax census statements to ferret out non-filers of income tax returns, fixed and percentage tax returns, tax census statements and the like. In future investigation of tax returns, the national tax register as filed and updated shall be used and after the termination thereof, a new set of national tax register in triplicate prepared. In all offices where the national tax register is accomplished or transmitted, the offices concerned should consolidate the latest national tax register with the statements filed on BIR Form 180 and 181. In all cases, the national tax register shall serve as a confidential information in the course of the investigation. B. Tax Register Division The Tax Register Division shall analyze the National Tax Register for the purpose of flushing out those taxpayers whose networth have increased beyond their reported income, in which case, the Chief, Tax Register Division shall forward to the Regional Director concerned those tax registers with indications of fraud for appropriate action. To insure an effective follow-up and for statistical purposes, the Regional Director to whom the tax registers have been referred for action shall submit a report of his findings within a reasonable period to the Commissioner of Internal Revenue. A report shall be submitted to the Commissioner of Internal Revenue within 120 days of statements received as consolidated into a tax census, who in turn shall transmit to the Secretary of Finance with the end in view of formulating tax policies and recommending reforms in the tax system and in revenue administration to achieve efficiency and honesty in the collection of taxes. Strict compliance with this Revenue Memorandum Order is hereby enjoined. CONRADO P. DIAZ Acting Commissioner of Internal Revenue