1999 Audit Program for Revenue District Offices

August 21, 1999 REVENUE MEMORANDUM ORDER NO. 67-99 SUBJECT : 1999 Audit Program for Revenue District Offices TO : All Regional Directors, Revenue District Officers (RDOs), Chiefs of the Assessment Divisions of Regional Offices, and All Internal Revenue Officers Concerned I. OBJECTIVES This Order is issued: 1 To prescribe uniform policies, guidelines and procedures in the audit of tax cases by Revenue District Offices; 2. To enhance to a high level the taxpayers' overall voluntary compliance by encouraging the correct reporting and payment of internal revenue taxes thru the conduct of quality audit; and 3. To effectively monitor the accomplishments of the Regional and District Offices regarding the audit function. cdll II. COVERAGE AND AUDIT SELECTION POLICIES This Audit Program covers investigation of 1998 internal revenue tax returns by Revenue District Offices. including income tax returns of fiscal-period taxpayers whose taxable years ended any day from June 1, 1998 to July 31, 1999. For purposes of this Order, no 1998 tax return shall be audited before September 1, 1999, the effectivity date of this RMO. Likewise, the audit of tax returns for 1997 and prior years shall not be initiated after August 17, 1999, except for cases involving claims for tax credit/refund, estate/donors' tax within the audit threshold, and requests for tax clearance of taxpayers due to retirement of business. In addition to the Audit Program of the Enforcement Service under RMO No. 64-99, the issuance of Letters of Authority by the Special Investigation Division of the Regional Offices, the Tax Fraud Division and other investigating offices/units in the National Office shall be covered by separate revenue issuances. All Letters of Authority to be issued pursuant to this Order shall be based on the following selection criteria with their corresponding case codes: A . Mandatory Category A : 1. For Revenue District Offices (RDOs) covered by Revenue Region Nos. 5, 6, 7 and 8 (Valenzuela, Manila, Quezon City and Makati), except RDO Nos. 35-Romblon, 36-Puerto Princesa, Palawan and 37-San Jose, Occidental Mindoro: a. Estate/donor's tax returns with a gross estate/gift above Ten Million Pesos (P10,000,000.00) (Selection Code: EST/DON ) b. Claims for tax credit/refund of individual taxpayers arising from business income or practice of profession where all the following conditions are present (Selection Code: TCR ): c.1 the amount of the claim exceeds Fifty Thousand Pesos (P50,000.00); and c.2 the gross sales/receipts exceed Ten Million Pesos (P10,000,000.00) 2. For all other RDOs including RDO Nos. 35, 36 and 37 a. Estate/donor's tax returns with a gross estate/gift above Five Million Pesos (P5,000,000.00) (Selection Code: EST/DON ) b. Claims for tax credit/refund of individual taxpayers arising from business income/income from profession where all of the following conditions are present (Selection Code: TCR ): b.1 the amount of the claim exceeds Twenty Thousand Pesos (P20,000.00); and b.2 the gross sales/receipts exceeds Five Million Pesos (P5,000,000.00); 3. Taxpayers retiring from business regardless of amount of gross assets, sales or receipts (Selection Code: RET ); 4. Claims for tax credit/refund of corporate taxpayers, except taxpayers under investigation by the Tax Fraud Division and other investigating division(s)/teams in the National Office, in which case, the audit of the claims shall be consolidated with the package audit of the taxpayers' books of accounts (Selection Code: MCO ); 5. Claims for tax credit/refund arising from withholding tax on purchases made by top 5,000 taxpayers pursuant to RR No. 2-98 where the amount of claim exceeds One Hundred Thousand Pesos (P 100,000.00), subject to the exception as stated in Section II.A.4 hereof (Selection Code: RET ); 6. Other claims for tax credit/refund including claims for VAT credit/refund exceeding One Hundred Thousand Pesos (P100,000.00) for the period(s) claimed, subject to the same exception under Section II.A.4 of this Order (Selection Code: OTR ); 7. Transfer of property in exchange for shares of stocks and other sale, transfer or exchange stocks not listed in the stock market where the zonal value of the property or the book value of the stocks exceeds Ten Million Pesos (P10,000,000.00) (Selection Code: TSS ); and 8. Government withholding agents on the withholding tax liabilities of these agencies (Selection Code: GWA ). Category B : 1. Taxpayers selected for tax audit based on third-party information (Selection Code: TPI ); and 2. Taxpayers selected for tax audit based on the results of the tax-mapping program (Selection Code: TMP ). B . Priority Target Taxpayers : If the mandatory audits described above do not provide sufficient workload for the RDO, the Revenue District Officer shall rank and select the taxpayers for audit as follows: Top Priority : 1. Taxpayers who did not avail of the Economic Recovery Assistance Program (ERAP) under Revenue Regulations No. 2-99 and Revenue Memorandum Order No. 10-99 (Selection Code: EM ). 2. Taxpayers who made partial availment of the ERAP to the extent of the tax liability not covered by the availment (Selection Code: PRP ). 3. Taxpayers in the district who filed break-even returns or with returns showing net loss for at least two (2) consecutive years, where the annual gross sales/income exceeds Three Million Pesos (P3,000,000) for Revenue Region Nos. 5, 6, 7 & 8 (Valenzuela, Manila, Quezon City and Makati ), except taxpayers in RDO Nos. 35-Romblon, 36-Puerto Princesa and 37-San Jose, Occidental Mindoro, and exceeds One Million Pesos (P1,000,000.00) for all other regions and the aforementioned RDOs (Selection Code: BEL ). 4. Top 100 taxpayers in the district in terms of gross sales/receipts where there is no VAT or percentage tax payment for the current year and the immediately preceding year (Selection Code: ZVP ). 5. Taxpayers with substantial reduction in gross sales/receipts/tax payments and/or substantial increase in costs of sales and expenses. For this purpose, the phrase " with substantial reduction in gross sales/receipts/tax payments " will mean at least twenty percent (20%) reduction in current year's gross sales/receipts/tax payments from that of the immediately preceding year's while " with substantial increase in costs of sales and expenses " will mean at least twenty percent (20%) increase in claimed cost of sales and expenses over and above the increase in costs and expenses attributable to increase in gross sales/receipts (Selection Code: SRS ). 6. Taxpayers belonging to the top two industries within the respective area of jurisdiction of the RDO with the lowest percentage of tax compliance subject to the same threshold set in Section II.B.3 of this Order for gross sales/receipts, using the following formula (Selection Code: TOP ): Tax due per return/Gross sales or receipts = Percent of tax compliance 7. Top 100 direct and indirect exporters in terms of gross sales/receipts (Selection Code: DEX ) Other Priority : If the desired number of taxpayers prescribed in the audit workplan could still not be met following the above guidelines, the Revenue District Officer may select taxpayers to be audited from the following industries provided their gross sales/receipts exceed the threshold in Section II.B.3 hereof (Selection Code: PTL ): 1. Information technology consultants and software developers; 2. General professional partnerships (including partners) and individuals engaged in the practice of profession; 3. Wholesale and retail traders, including multi-level marketing and home TV shopping companies; 4. Utility companies (water, power and telecommunication); 5. Pawnshops and money changers; 6. Operators of franchised establishments (supermarkets, distilled water companies, etc. but excluding food chains) including franchisees; 7. Freight and cargo forwarders and parcel post couriers; 8. Import traders; 9. Movie and television producers, talents and personalities; and 10. Professional athletes, coaches and sport celebrities The taxpayers to be selected for audit for industries listed above shall be those falling in the lowest ten percent (10%) of the list in terms of tax compliance, as defined in Section II.B.6 hereof. Top Management's Policy Cases : From time to time, top management may identify group(s) of taxpayers not yet included in the above guidelines for immediate audit. The authority to issue LAs for these cases shall be embodied in written orders from the Commissioner or the Deputy Commissioner for Operations (Selection Code: NOM ). Revenue District Officer's Discretion : The Revenue District Officer is given the opportunity to select taxpayers which do not fall within the guidelines established above but the total selected audit candidates shall not exceed ten percent (10%) of the annual work plan assigned to the RDO (Selection Code: RDO ). The above selection criteria are listed according to order of priority. Lower priority tax returns shall not be audited until all higher priority audits are assigned and distributed to the Revenue Officers. C . Exceptions : The following 1998 tax returns, however, shall be excluded from audit and investigation by the RDOs: 1. Taxpayers who were granted immunity from audit and investigation under the Economic Recovery Assistance Payment Program, including taxpayers who increased their tax payments for 1998 by 20 % but did not file the prescribed Immunity Availment Form (BIR Form No. 2103). 2. Taxpayers to be examined by the Assessment Division under the Office Audit Program; 3. Taxpayers selected for audit/investigation by the Special Investigation Divisions of Regional Offices. the Tax Fraud Division and other audit divisions/teams in the National Office; and 4. Top 500 Large Taxpayers being monitored by the Large Taxpayers Division in the National Office and other taxpayers/industries covered by the Audit Program of the Enforcement Service pursuant to RMO No. 64-99, including the audit of all claims for tax credit/refund and other possible tax liabilities of the said taxpayers. llcd III. AUDIT POLICIES AND GUIDELINES 1. The Revenue District Officer shall draw a list of taxpayers selected for audit under Section II.B above, following the format prescribed under Annex "A" hereof. The list shall state the name of taxpayer selected for audit, the nature of business, the amount of gross sales/receipts declared by the taxpayer for year 1998, the selection code, the Philippine Standard Industrial Classification (PSIC), and the corresponding amount of income tax paid for the period. The said list shall be submitted by the Revenue District Office to the Regional Director on or before August 31, 1999 for pre-approval. The pre-approved list shall be submitted by the Regional Director to the Assistant Commissioner, Assessment Service (ACIR, Assessment Service) not later than September 15, 1999 for final approval. 2. The Regional Director and ACIR, Assessment Service shall ensure that the taxpayers to be audited/investigated by the RDOs under this program are not among those to be audited by the Assessment Division under the Office Audit Program and by the investigating division/teams in the National Office, respectively. For this purpose, the Assessment Service shall match the lists of taxpayers submitted by the RDOs with the lists of taxpayers to be investigated by the audit division(s)/teams in the National Office prior to approval to preclude multiple issuance of LAs to the same taxpayer for the same taxable year. 3. All Letters of Authority (LAs) shall be issued and approved by the Regional Director. However, no LAs for the investigation of taxpayers falling under the priority target taxpayers shall be issued by the Regional Director without prior written approval of the ACIR, Assessment Service. LibLex 4. The policy on the simultaneous investigation of all liabilities of the taxpayer shall be followed. One Letter of Authority (LA) shall be issued for each taxable year to include all internal revenue tax liabilities of the taxpayer. However, for purposes of verifying tax liabilities of a decedent, one LA shall be issued to cover the estate tax liability and the income tax liability of the deceased taxpayer for the immediately preceding year up to the time of his death. The investigation of tax cases of General Professional Partnerships, including that of the partners, shall be undertaken by the Revenue District Office where the partnership is registered. However, where any of the partners belong to another jurisdiction, the following guidelines shall be observed: 4.1 Where the examination of the partner's return has been previously terminated by another RDO or investigating office, the terminated case shall no longer be re-opened except when fraud has been established; and 4.2 If the examination of the partner's return is still on-going, such audit shall be continued by the RDO who is examining the return of the General Professional Partnership. In this case, the former shall immediately desist from pursuing the examination of the partner's return and shall cause the immediate transmittal to the latter of all the returns and documents gathered in connection therewith upon receipt from the latter of a written request for its transmittal and machine/photo copies of the LAs authorizing such simultaneous investigation. 5. The practice of issuing mission orders, correspondence letters, or any other similar orders for the purpose of audit examination and assessment of internal revenue taxes is hereby strictly prohibited. However, this excludes orders for purposes of surveillance, data gathering under the Third Party Information Program, or any similar purpose. cdlex 6. LAs shall not be issued and the Regional Director shall not initiate audits on tax returns that do not match the selection criteria outlined in this Order unless prior written approval is secured from the ACIR, Assessment Service. 7. Verification and processing of the following non-LA cases shall be covered by Tax Verification Notices (TVNs) (Annex "B") pursuant to Revenue Memorandum Order No. 33-99: a. Tax returns of taxpayers below audit thresholds set under II.A of this Order a.1 Capital gains tax returns a.2 Withholding tax returns involving sale or transfer of properties. a.3 Estate/donor's tax returns below the audit threshold a.4 Claims for tax credit/refund of individual taxpayers a.5 Other claims for tax credit/refund including claims for VAT credit/refund below the audit threshold b. Protested cases for re-investigation Cases covered by TVNs shall be processed within thirty (30) days from receipt thereof by the Revenue Officer except for capital gains and withholding tax cases which shall be processed within five (5) working days counted from the receipt of the TVNs and tax returns. 8. Verification of claims for tax refund/credit on purely compensation income shall not be covered by LAs or TVNs. Since verification of these returns is more or less limited to the checking of the mathematical accuracy of the figures reflected in the tax return, and/or the reconciliation of income taxes withheld at source under the Tax Reconciliation System for ITS RDOs, processing of claims for refund/credit from purely compensation income earners may be handled by Document Processors or other similar personnel in the district office. The processed claims for tax refund/credit emanating from purely compensation income shall not be subject to review by the Assessment Division in the Regional Office except where such claims verification resulted to deficiency tax assessments. 9. The provisions of Sections II.A.1.a and II.A.2.a above notwithstanding, a Letter of Authority shall be issued to cover the examination of the following tax returns: a. Estate tax returns where the decedent has properties located in at least two areas under the jurisdiction of different Revenue District Offices even if the gross estate does not exceed Ten Million Pesos (P10,000,000.00) for Revenue Region Nos. 5, 6, 7 and 8 (Valenzuela, Manila, Quezon City, and Makati) except RDO Nos. 35, 36 and 37 (Romblon, Puerto Princesa, Palawan and San Jose, Occidental Mindoro) and Five Million Pesos (P5,000,000.00) for all other RDOs including RDO Nos. 35, 36 and 37; b. Donor's tax returns where the properties donated are located in areas under the jurisdiction of at least two Revenue District Offices, even if the gross gift during the same calendar year does not exceed the above-threshold; c. Where after the verification of the estate tax return not covered by a Letter of Authority has commenced, it was found out that there was omission/misdeclaration of the properties of the decedent in the return or where after the verification of the donor's tax return has started, it was ascertained that there was omission of prior donations made during the same calendar year or that there was misdeclaration of the value of the properties declared in the donor's tax return, the Regional Director shall, upon recommendation of the concerned Revenue Officer favorably endorsed by the Revenue District Officer, issue a Letter of Authority for a more in-depth examination of the case. For the purpose of this Order, the terms specified below shall have the following meanings: a. Gross estate means the value of all real and personal properties as declared in the estate tax return; b. Gross gift means the value of all real and personal properties declared in the donor's tax return; and c. There is omission/misdeclaration when the value of the properties omitted or misdeclared are: (1) For real properties Lower than the zonal value in places where there are zonal values or actual fair market value in places where no zonal values are established. cdlex (2) For personal properties Lower by more than 50% of the actual fair market value. d. Where no return has been filed on properties transmitted by the decedent/donor, the Revenue District Officer shall prepare the corresponding return on the basis of the best evidence obtainable pursuant to Section 6(B) of the National Internal Revenue Code and issue a Letter of Authority if found to be above the threshold limits set by this Order. 10. Taxpayers selected for audit under the "RDO Discretion" category during the immediately preceding taxable year shall not be the subject of audit under this Program, unless there is a compelling reason to audit such taxpayers, in which case, a written justification therefor shall be submitted by the Revenue District Officer concerned to the Regional Director, subject to approval by the ACIR, Assessment Service, prior to the Issuance of LA. 11. Taxpayers who have been examined for the prior year shall not be investigated for the immediately succeeding period by the same Revenue Officer and/or Group Supervisor except when there is only one Group Supervisor or at most four Revenue Officers in one district. 12. LAs shall be issued only when the duplicate copy of the tax returns of the taxable year covered by the LA-is attached thereto, except in the following cases: 12.1 Where the return of a taxpayer selected for audit cannot be located in the Revenue District Office, the LA shall be issued only when there is a certification to that effect by the Head, Revenue Data Center for taxpayers covered by ITS RDOs, and the Assistant Commissioner, Information Systems Operations Service for taxpayers covered by non-ITS RDOs; and 12.2 Where the basis for the issuance of the LA or tax case is the result of the Tax Mapping Program and the Third-party Information Program and the concerned taxpayer was found to have failed to register with the Bureau and/or failed to file the applicable tax returns and pay the corresponding taxes thereon. 13. Only Revenue Officers-Assessment Group shall be authorized to conduct audit and investigation of tax cases, whether in a principal or assisting capacity. 14. The number of cases to be handled by each Revenue Officer involving old pending cases (cases due to prescribe within one year or less), tax refund/credit cases, cases under re-investigation, estate and donor's tax cases, and cases involving taxpayers retiring from business should not exceed twenty percent (20%) of his total number of cases at any time during the year. This policy must be observed to ensure that these cases are given top priority. 15. No new tax case shall be assigned to Revenue Officers until they have completed the audit and have reported the following cases pending with them within one (1) month from the effectivity of this Order: a. Prescribing cases/dockets b. Cases for re-investigation c. Cases involving claims for tax refund/credit assigned before April 30, 1999 d. Third-party information cases e. Cases of retiring taxpayers assigned before April 30, 1999 f. Cases held for more than twelve (12) months 16. The initial workload for every Revenue Officer will be a minimum of ten (10) cases and maximum of twenty (20) cases. In no case shall the number of cases handled by a Revenue Officer exceed twenty (20) cases at any one time during the year, subject to replenishment after the submission of the report of investigation/closure of each case. Each LA is counted as one case of each and every Revenue Officer assigned to the case, as discussed in detail in Section III.17 of this Order. Pending cases covered by LAs as of August 31, 1999 shall be counted as part of the initial workload of the Revenue Official. Cases or tax dockets returned to the Revenue Officer for re-investigation after the taxpayer was found to have filed a valid written protest on the reported deficiency tax assessment(s) shall not be counted as one case for the purpose of computing his pending workload. On the other hand, cases returned after review by the Chief, Assessment Division, the Regional Director and his assistant, or any head of office in the National Office, whenever applicable, for compliance with certain documentary audit requirements or for further conduct of audit to meet some procedural requirements shall be considered as an addition to his existing workload upon receipt of the returned case or docket. In all cases, these returned cases requiring compliance with certain review requirements shall be immediately acted upon and returned to the Chief, Assessment Division within thirty (30) days from receipt of the docket from the reviewing office. This shall be strictly observed in order to ensure the conduct of quality audit and that top priority action shall be given by the concerned Revenue Officer on these returned cases. cdll In addition, cases returned to the Revenue Officer by the Legal Division for continuation of audit/investigation after rendering the desired resolution/opinion on certain legal issues shall likewise be considered as part of his pending inventory or workload. Where the Revenue Officer's workload at any given time exceeded the maximum allowable limit of twenty (20) cases upon his receipt of the returned cases upon review by higher authority, the excess thereon shall not be attributed to the Regional Director and/or Revenue District Officer as a violation of this Order. However, no new case shall be assigned to the concerned Revenue Officer until such time that his workload shall fall below the maximum 20-case limit. Likewise, a Revenue Officer shall not be assigned new cases where the number of his returned cases is more than five (5) at any one time, even if he has a pending inventory of less than twenty (20) cases. 17. One tax case shall be assigned to one Revenue Officer. For large and complex tax cases, more than one Revenue Officer in the same RDO may be assigned to conduct the audit. For LAs issued in the name of two or more Revenue Officers, each case shall be considered to have been assigned to all Revenue Officers whose names appear on the issued LA. For the purpose of determining the workload of each Revenue Officer, each case shall be counted as his individual accountability, notwithstanding the number of Revenue Officers stated in the LA. Thus, one case assigned to five (5) Revenue Officers shall be reported as inventory of each of the five Revenue Officers. 18. Revenue Officers shall strictly follow the audit procedures and techniques provided for under Revenue Audit Memorandum Order Nos. 2-95 and 1-99 and shall comply with the reporting requirements prescribed under Revenue Memorandum Order No. 53-98. The Group Supervisors and Revenue District Officers shall see to it that substantial compliance with these issuances are observed by all Revenue Officers to ensure quality audit of tax returns in the exercise of their supervisory duties and functions. All reports of investigation to be submitted shall satisfy all the requisites of a quality report to meet the approval of any reviewing office, both internal and external, on a regular review, performance audit or post-audit basis. 19. The Revenue Officer shall utilize data obtained from Third Party Information (TPI) sources or any record available in the Bureau that may provide valuable basis for the determination of the taxpayer's true tax liabilities prior to the finalization of the audit. It shall be incumbent upon the concerned Revenue District Officer and Regional Director to ensure that this procedure is strictly observed prior to case closure and approval of the corresponding reports of investigation. cdll 20. Audits of all cases covered by LAs shall be completed and corresponding reports thereon shall be submitted by the Revenue Officer within one hundred twenty (120) days from the issuance of LAs. In case the report can not be rendered within the prescribed period due to constraints attributable to the taxpayer, the Revenue Officer may request for the revalidation of the LA by preparing a progress report on the case duly noted by the Group Supervisor and approved by the Revenue District Officer. In all cases, however, only one revalidation of I-A shall be allowed. The Revenue District Officer shall transmit the entire docket of the case to the Regional Director for revalidation of the LA. The previously issued LA shall be stamped "Revalidated on ____" and shall be signed by the Regional Director. Reports of investigation on closed and terminated cases wherein the deficiency taxes per investigation were paid at the RDO level shall be prepared and submitted to the Chief, Assessment Division for appropriate review within ten (10) days from the date-of taxpayers' payment of such deficiency tax assessments. Reports of investigation/verification on cases for assessment shall be submitted to the Assessment Division for review at least SLS (6) months before the prescription date of the cases. 21. Revenue Officer's Audit Reports (BIR Forms 0500 series for ITS RDOs and BIR Forms 1717 series for non-ITS RDOs) shall be prepared for all reports of verification or audit, whether or not covered by Letters of Authority. 22. The Assessment Division shall review all dockets covered by LAs and TVNs prior to the issuance of a preliminary/final assessment notice, termination letter, confirmation letter, tax credit certificate or refund check. In case the reviewers in the Assessment Division discover certain additional deficiency taxes as a result of their audit review or find that the taxpayers are excessively assessed, the docket of the case shall be returned to the originating investigation office for appropriate action. The reviewing officer shall, in no case, be allowed to make any adjustments to the audit reports submitted by the investigating offices. 23. The RDOs shall transmit to the Assessment Division the duplicate copies of all 1998 tax returns not selected for audit under Section II.B hereof These transmitted returns shall, be the basis for audit selection by the Assessment Division under the Office Audit Program. Likewise, all 1997 and prior year's duplicate tax returns not currently under audit except estate and donor's tax returns and those involving claims for tax credit/refund and which are not part of the Audit Program for 1999 shall be transmitted to "the Assessment'' Division in the Regional Office for safekeeping. Transmittal of 1997 and 1998 returns shall be done later than September 30, 1999. The official duplicate copies of tax returns transmitted to the Assessment Division shall be stored and arranged :.thereat chronologically by taxable year, and thereafter alphabetically, for facility and ease of retrieval. In case the RDO cannot audit all the returns previously selected for audit, the unaudited returns shall be transmitted to the Assessment Division provided prior written approval is secured from the Assistant Commissioner, Assessment Service, thru the concerned Regional Director. These transmitted returns may, in turn, be selected for audit by the Assessment Division as long as the guidelines, policies and procedures set forth in the Office Audit Program are observed. 24. The preparation, approval and release of Assessment Notices and Demand Letters as well as the preparation of BIR Form 40.00 shall be in accordance with the provisions of Revenue Memorandum Order No. 37-94, as amended by Revenue Memorandum Order No. 36-99. All protests on assessment shall be evaluated and acted upon in accordance with the provisions of Revenue Regulations No. 12-85. cdll 25. The Regional Director shall maintain an LA Register for all LAs issued by him. All issuances, revalidations, cancellations, case closures, assessments and other matters in relation to LAs should be entered in the LA Register. Entries in the LA register must be complete and updated at all times. IV. 1999 AUDIT WORK PLAN The 1999 Audit Work Plan shall run from September 1, 1999 up to August 31, 2000. In order to maximize the capability and full potentials of each Revenue District Officer in the district office, the Revenue District Office shall set the number of audit cases that must be completed by each Revenue Officer within the audit period consistent with the policies and guidelines set in this Order. In estimating his audit plan, the Revenue District Officer must consider his pending inventory as of August 31, 1999, the number of Revenue Officers-Assessment in his district, and the audit capability of each Revenue Officer to ensure quality audit of tax returns. However, before the commencement of audit, each Revenue District Officer, thru the Regional Director, shall secure written approval of his audit plan from the ACIR, Assessment Service. Depending on the efficiency of the individual Revenue Officer, the amount of inventory on hand at any time may be equal to or less than the maximum of 20 cases as specified in Section III.16 above. The Revenue District Officers and the Regional Directors must perform ongoing workload reviews to ensure that Revenue Officers are effectively managing their inventories and the time being spent in the conduct of audit. The 1999 Audit Work Plan counts the accomplishment of cases/dockets with Letters of Authority closed during the audit period. Since there is only one audit plan in effect at any given time, audit closures shall be counted towards the completion of the audit plan for the year in which they are closed and not when the case was created. For example, if a case is started in August 1998 (during the 1998 audit program) and is closed in October 1999 (during the 1999 audit program), the closure is counted for 1999 audit program and not 1998. In addition to adherence to the policies and guidelines set forth in this Order, the actual accomplishments of the concerned Revenue Officers, Group Supervisors and Revenue District Officers in relation to the approved audit plan, shall have significant weight in the evaluation of their performance and in determining their place of assignment. V. DEVIATION FROM POLICY Circumstances may occur during the current audit year (September 1, 1999 up to August 31, 2000) that may affect the accomplishment of the approved audit plan. Such circumstances include the increase or decrease of assessment Revenue Officers assigned to the Revenue District Office, existence of special project(s) initiated/prescribed by the National Office which necessitates diversion of assessment Revenue Offices from assessment work or suspension of audit and investigation to give way for the conduct of other priority activities. Since this Order cannot cover all possible situations in Revenue District Offices throughout the country, deviation from these policies, may be allowed only upon prior written authorization from the ACIR, Assessment Service as recommended by the Regional Director. However, deviations from this Order other than those affecting the work plan shall require written authorization from the Commissioner. In these cases, the Revenue District Officers, thru the Regional Directors, shall submit a written request to the ACIR, Assessment Service for any deviation from the policies and guidelines set in this Order, including the upward or downward revision to the 1999 Audit Work Plan affecting their respective RDOs. No revisions in the RDO's audit work plan shall be effected by the Regional Directors and the Revenue District Officers without first securing prior written approval from the ACIR, Assessment Service. VI. REPORTING REQUIREMENTS In order that uniform information will be submitted by the Regional Directors, Revenue District Officers, Chiefs of Assessment Divisions in the Regional Offices, Group Supervisors and Revenue Officers in the district office, the submission of the following reports are hereby prescribed: 1. For Regional Directors 1.1 Monthly List of Letters of Authority Issued (Annex "C") This report shall contain the name of the taxpayer to whom the Letter of Authority was issued, LA Number, date of issuance of LA, the audit case selection code, and the taxable period covered This report shall be accomplished on a per RDO basis and shall be submitted to the ACIR, Assessment Service not later than the 10 th day of the month immediately following the month of issuance. prcd 1.2 Regional Accomplishment Report on Assessment Activities (BIR Form 40.21 Revised) (Annex "D") This report constitutes Part II of the Regional Accomplishment Report prescribed under RMO No. 4-82, as amended by RMO No. 34-94. The Monthly Summary of Assessment and Collection Activities of the Revenue District Offices and the Assessment Division of Regional Offices consolidates the assessment and collection activities of these offices based on the individual Revenue Officer's monthly performance reports. This monthly report shall be submitted directly to the ACIR, Assessment Service on or before the 15 th day of the following month. 1.3 Monthly Report of Tax Credit/Refund Approved and Granted (Annex "E") This report contains all claims for tax credit/refund processed in the RDOs which have been approved and granted by the Regional Office. This report shall be submitted to the Assessment Service not later than the 10 th day of the following month. 2. For the Revenue District Officers 2.1 Monthly Report of Closed Cases/Dockets (Form 0603, formerly Form 19.71) (Annex "F") This report shall contain the total number of dockets closed during the month segregated by tax year, type of tax, Audit Selection Codes, and the details of the monthly report of closed cases/dockets. The Audit Selection Codes under RMO Nos. 26-94, 17-95, 12-96, 11-98 and 12-98 shall continue to be used for 1999. Other selection codes have been added to the 1999 Audit Program This report shall be submitted directly to the ACR, Assessment Service not later than the 10 th day of the following month. A copy of this report shall also be submitted to the Revenue Regional Director. Section E of this report captures the data on closed cases/dockets not covered by Letters of Authority. The summary report of Form 0603 will show the number of cases closed during the month with Letters of Authority on Lines 1 through 4 and without Letters of Authority on Lines 5 and 6. Cumulative figures are required for both types of cases/dockets. For the 1999 Audit Program, the reporting period shall begin on September 1, 1999 and will end on August 31, 2000. Accomplishment of the 1999 Audit Plan will be based on the number of closed cases as reflected on Line 2 of Form 0603. Only the revised Form 0603 prescribed in this Order shall be accomplished by the RDOs. Prior versions of this form are considered obsolete. The instructions for the accomplishment of BIR Form 0603 are shown as part of Annex "F-1" hereof. 2.2 Monthly Status of Letters of Authority Issued and Acted Upon (Annex "G") In addition to the list of LAs issued as prescribed in Annex "C", this report will reflect any reassignment, loss, cancellation, or spoilage of LAs, referrals to other Offices, and reporting of cases covered by LAs during the particular month. Cases still pending audit or investigation as of the end of the month and/or terminated cases where no official reports thereon have yet been rendered and duly transmitted to the Assessment Division in the Regional Office shall not be included in this report. The column "Code" under "Status" reflects information on LAs issued classified and coded as: (A) LA for which a report of investigation has been submitted; (B) LA canceled after it has been issued and served to the taxpayer; (C) revalidated LA; (D) LA reassigned to another Revenue Officer; (E) Spoiled LA, canceled before being issued are served; (F) LA referred to Legal Division, SID, or other Offices; (G) lost or missing LA; and (H) Others (to be specified), not covered in Status (A) to (G). The column "Date Action was Taken" indicates the date the report of investigation was submitted, LA was canceled, revalidated, reassigned, referred to other office, or reported as lost/missing or spoiled. In the "Remarks" column, indicate (a) reason for cancellation of LA which was issued to the taxpayer such as investigation was terminated by another audit/investigating unit, taxpayer cannot be located, or availed of amnesty or last priority in audit, or other reasons; (b) the new LA number issued, if LA was revalidated; (c) name of Revenue Officer currently handling the audit or investigation for which LA has been issued and reassigned; (d) name of Office to whom the case was referred and reasons for such referral; and (e) reason why the LA was lost or missing. This report shall be submitted directly to the ACIR, Assessment Service, copy furnished the Regional Director, not later than the 10 th day of the immediately following month. 2.3 Monthly Summary of Assessment and Collection Activities (Annex "H") This is the district report on the accomplishments made pertaining to assessment matters. The report contains detailed information on the results of the audit/investigation conducted per case and per tax type, including the processing of claims for tax credit/refunds. This report also reflects the summary of the number of tax cases acted upon and closed by the Revenue District Office during the given month including original investigation/verification cases, and dockets returned by the Assessment Division for compliance of certain reporting requirements. Only cases/dockets actually transmitted for review to the Assessment Division as of the end of each month shall be included in this report. This report shall not include collections arising from the voluntary payment of capital gains, estate and donor's taxes. This report shall be submitted to the ACIR, Assessment Service on or before the 10 th day of the following month A copy of this report shall likewise be submitted to the Regional Director on or before the same date as basis for the preparation of the monthly Regional Accomplishment Report on Assessment Activities (BIR Fore 40.21). 2.4 Monthly Inventory of Pending Cases (Form 19.64S) (Annex "I") This district report is a summary of the Revenue Officer's Monthly Report of Pending Inventory (BIR Form 19.64) being accomplished individually by Revenue Officers for both original investigation and reinvestigation cases. It reflects the number of pending cases per tax year, the inventory of pending cases at the beginning of each month, the number of new dockets/cases started during the month, the number of closed/reported cases, and the total number of pending inventory as of the end of the month covered by the report. In addition to these information, this report also shows an aging analysis in number of months of the pending cases/dockets. BIR Form 19.64S, Inventory of Pending Cases/Dockets, is divided into four sections: Income Tax-Individuals; Income Tax-Corporations and Partnerships; Value-Added Tax, Other Percentage Taxes, and Documentary Stamp Tax; and Other Taxes. This report shall be submitted directly to the ACIR, Assessment Service not later than the 10 th day of the following month. A copy of this accomplished form shall also be submitted to the Revenue Regional Director. 2.5 Monthly Report of Tax Credit/Refund Processed (Annex "J") This report provides details on LA and non-LA cases involving claims for all types of tax credit/refund which are being processed at the RDO level. This report shall be transmitted to the Assessment Service on or before the 10 th day of the following month. cdlex 3. For Group Supervisors 3.1 Records of Investigation (BIR Form 40.01-B) (Annex-"K") This report contains the summary of accomplishments of Revenue Officers under the direct supervision of each group supervisor as reported in BIR Form Nos. 40.01-C Series. This monthly report shall be submitted to the Revenue District Officer together with all the duly accomplished Form 40.01-C Series not later than the 6 th day of the following month. 4. For Revenue Officers 4.1 Monthly Report on Pending Inventory of Cases/Dockets (BIR Form 19.64) (Annex "L") This report shall be accomplished individually by Revenue Officers and shall contain information on the cases or dockets still pending in their possession at the end of each month This inventory report shall contain, among others, the name and address of taxpayer, the LA number, the date of issuance of the letter of authority or date of case assignment, kind of tax and taxable period involved, and the status thereof. This report shall also contain the age of each case/docket in terms of the number of months being held in the inventory by each Revenue Officer. This report shall be submitted by the Revenue Officers to the Revenue District Officers not later than the 5 th day of each month which shall in turn, be used as basis by the RDO in accomplishing BIR Form 19.64S. 4.2 Records of Investigation (BIR Form 40.01 C Series) (Annex "M") Each Revenue Officer shall accomplish this form monthly. BIR Form 40.01.C1 shall contain detailed information on the results of audit/verification for each tax case across all tax types. Separate list of accomplishments on cases covered by LAs and TVNs/RVOs shall be reported by the concerned Revenue Officer. In addition to BIR Form 40.01.C1, the Revenue Officer shall likewise accomplish detailed report on the results of audit/verification conducted for each tax type as follows: Tax Type Form No. Income tax Form 40.01-C2 Value-added tax Form 40.01-C3 Percentage tax Form 40.01-C4 Transfer tax Form 40.01-C5 Withholding tax Form 40.01-C6 Excise tax Form 40.01-C7 Documentary stamp tax Form 40.01-C8 The reports on investigation/verification of income, transfer and documentary stamp tax shall not include collections arising from the voluntary filing of capital gains, estate, donor's and documentary stamp tax returns of taxpayers. Records of Investigation on Claims for Tax Credit/Refund (BIR Form 40.01-C9) shall be accomplished for all processed claims for tax credit/refund. However, pre-audited tax returns involving claims for tax refunds arising from purely compensation income shall not be included in this report. BIR Form 40.01-C10 contains the Summary of Records of Investigation Per Tax Type (BIR Form Nos. 40.01-C2 up to 40.01-C9) including the summary of cases handled and closed during the month and the pending cases as of the end of each month in terms of number of cases. All these reports shall be submitted by each Revenue Officer to his Group Supervisor not later than the 5 th day of the following month These reports shall be the basis of the Group Supervisor in accomplishing BIR Form 40.01-B. 4.3 Revenue Officers Audit Reports - BIR Forms 1717/0500 Series (Annexes N-1 to N-25) These report forms shall be clearly and accurately accomplished by Revenue Officers for all investigation/verification of cases closed/assessed, whether or not they are covered by Letters of Authority. The form shall be accomplished in duplicate and attached to the case docket. 4.4 Revenue Officer's Field Report (BIR Form 1951) (Annex "O") This is a record of the conduct of the audit/verification and shows the date, time, taxpayer name and address, nature of work done and remarks. This provides data on the number of hours spent to be entered in the BIR Forms 1717/0500 Series. This report should be signed by the Revenue Officer, verified by the Group Supervisor and submitted to the Revenue District Officer on or before the 5 th day of each month. 5. For Chiefs, Assessment Division 5.1 Monthly Report on Cases/Dockets Received from Investigating Offices for Review (Annex "P") This report shows the list of dockets/cases received from the investigating divisions for appropriate review by the Assessment Division. The dockets received may consist of reports of investigation submitted for review for the first time, reports of re-investigation on protested cases, and reports of investigation on returned cases after compliance of certain review requirements. This report also contains a summary of the number of reports/dockets received from each investigating office under the jurisdiction of the Regional Office for any given month. The total number of reports/dockets received reflected in this report must tally with the total number of cases received by the Assessment Division as indicated in Annex "Q" hereof. This report shall be submitted to the ACIR, Assessment Service, copy furnished the Regional Director, on or before the 10 th day of the following month. 5.2 Monthly Report on Reviewed Cases (Annex "Q") This report shall contain a list of the cases/dockets reviewed by the Assessment Division per tax case. A separate list shall be made for cases recommended for approval by the Regional Director and the cases returned to the concerned investigating office for necessary adjustments and/or compliance of certain report deficiencies. The report shall also contain information on the corresponding recommendation(s) made by the Assessment Division relevant to each reviewed tax case/docket. The Report on Reviewed Cases shall reflect the inventory of cases for review by the Assessment Division classified per Revenue District Office. It contains information on the number of cases in the inventory as of the beginning of the month, the number of reports of investigation received for both original reports and returned cases/dockets, the number of cases reviewed and recommended for approval by the Regional Director, the number of cases received and returned for compliance to the investigating offices, and the number of cases still in the inventory as of the end of the month The percentage of the number of approved reports of investigation per review in relation to the total number of reviewed cases shall also be reflected in this report. For the purpose of accomplishing this report, the number of reports of investigation shall refer to the number of LAs and TVNs/RVOs and not the number of Revenue Officer's Audit Report (BIR Forms 1717/0500 Series) prepared and submitted for each tax case. LibLex This report shall be submitted to the ACIR, Assessment Service not later than the 10 th day of the following month. The Regional Director shall be furnished with a copy of this report to be used as basis in preparing the monthly Regional Accomplishment Report on Assessment Activities. 5.3 Monthly Summary of Taxes Assessed (BIR Form 40) (Annex "R") This report contains the list of taxpayers to whom letters of demand and final assessment notices have been issued. It shows basic information on the assessments issued per taxpayer such as taxpayer's TIN, kind of tax assessed, assessment number, taxable period, due date for payment, and amount assessed. Two separate BIR Form 40 shall be accomplished for disputed assessments and for final and executory collectible account. The duly accomplished BIR Form 40 for disputed assessments shall be submitted to the Regional Director, copy furnished the ACIR, Assessment Service. On the other hand, BIR Form 40 for final and executory collectible accounts shall be submitted to the Collection Division in the Regional Office, the Office of the Regional Director, the Information Systems Operations Service, and the Assessment Service. These reports shall be submitted to these offices on or before the 10 th day of the following month when the assessments become due and demandable or when the taxpayer filed his valid letter of protest, if any, whichever comes earlier. 5.4 Approved Duplicate Copy of BIR Forms 1717/0500 Series The duplicate copy of approved Revenue Officers Audit Reports (BIR Forms 1717/0500 Series) shall be detached from the case docket by the Assessment Division and transmitted to the Assessment Service not later than the 15 th day of each month. VII. VIOLATIONS Any unauthorized deviation from the foregoing policies and instructions and/or violation of any provision of this Order will result in the imposition of disciplinary action to the concerned revenue officers and officials. For this purpose, any violation and/or unauthorized violation hereof shall be referred by the concerned revenue official thru the ACIR, Assessment Service to the Internal Affairs Service for the appropriate investigation. In this regard, the ACIR, Assessment Service may recommend to the Commissioner the relief, reassignment, or transfer of any revenue official violating any of the provisions and instructions prescribed in this Order. The Regional Director may also recommend to the Commissioner the replacement of Revenue District Officers removed for non-compliance with this Order. VIII. REPEALING CLAUSE Revenue Memorandum Order Nos. 36-99, 33-99, 12-98, 11-98, 12-96, 29-95, 17-95, 34-94, 26-94, 9-90, 12-89, 4-89, 4-82, 3-82, 14-81 and all other issuances inconsistent herewith are hereby modified or repealed accordingly. IX. EFFECTIVITY This Order shall take effect on September 1, 1999. (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue List of Reports to be Prepared/Submitted under the 1999 Audit Program No. Name of Report Reference Distribution of Report Due Date of Office/Division Remarks Submission Responsible 1 Monthly List of Annex C 1. AS 10th day of Regional Office The format, due date of submission Letters of Authority 2. AD the month and office to prepare the report as issued 3. File copy immediately prescribed under RMO No. 4-89 were following the changed. month of issuance 2. Regional Annex D 1. AS 15th day of Regional Office The format prescribed under RMO Accomplishment Form 40.21 2. File copy the month No. 4-82 is revised to include Report on Assessment information required/needed by top Activities management. The submission of report on Regional Director Performance Report prescribed under RMO No. 9-90 shall be discontinued since the information contained in the said report is already incorporated in the report prescribed herein. 3. Monthly Report on Annex E 1. AS 10th day of Regional Office The submission of report on Monthly Tax Credit/Refund 2. File copy the month Value- Added Tax Credit/Refund Approved and Granted Approved and Granted (Annex B) prescribed under the unnumbered memorandum of the CIR dated October 14, 1998 shall be discontinued. The information contained in the said report is already incorporated in the report prescribed herein. 4. Monthly Report of Annex F Form 1. AS 10th day of Revenue District Closed Cases/Dockets 0603 (formerly 2. RO the month Office 19.71) 3. File copy 5. Monthly Status of Annex G 1. AS 10th day of Revenue District The due date of submission was Letters of Authority 2. RO the month Office changed from weekly to monthly. Issued and Acted Upon 3. AD 4. File copy 6. Monthly Summary of Annex H 1. AS 10th day of Revenue District The submission of the following Assessment and Form 40.01-A 2. RO the month Office reports shall be discontinued: Collection Activities 3. File copy a. Revenue District Officer Performance Report prescribed under RMO No. 9-90; b. Monthly Report of Value-Added Tax Credit/Refund Processed (Annex A) prescribed under unnumbered memorandum of the CIR dated Oct. 14, 1998; c. Assessments and Collections as a Result of the Audit Effort (Section A) prescribed under unnumbered memorandum of DCIR-OG dated September 8, 1998; and d. Summary of Assessment and Collection Activities of the Revenue District Offices (BIR Form 40.01). The information contained in the above- mentioned reports is already incorporated in the report prescribed herein. 7. Monthly Inventory of Annex I 1. AS 10th day of Revenue District Pending Cases Form 19.64S 2. RO the month Office 3. File copy 8. Monthly Report on Annex J 1. AS 10th day of Revenue District The submission of report on Monthly Tax Credit/Refund 2. AD the month Office Value- Added Tax Credit/Refund Processed 3. File copy Processed (Annex A) prescribed under the unnumbered memorandum of the CIR dated October 14, 1998 shall be discontinued. The information contained in the said report is already incorporated in the report prescribed herein. 9. Monthly Report on Annex P 1. AS 10th day of Assessment Division Cases/Dockets 2. RO the month Received from 3. File copy Investigating Offices for Review 10. Monthly Report on Annex Q 1. AS 10th day of Assessment Division The report on Actual Reviewed Cases 2. RO the month Accomplishment on Selective Audit 3. File copy Program prescribed under the unnumbered memorandum of the DCIR-OG dated March 25, 1999 shall be discontinued since information contained in the said report is incorporated in report prescribed herein. 11. Monthly Summary of Annex R 1. RO 10th day of Assessment Division Taxes Assessed Form 40 2. AS the month (Disputed 3. File copy Assessments) 1. Collection Division Monthly Summary of 2. RO Taxes Assessed (Final 3. ISOS and Executory 4. AS Collectible Accounts) 5. File copy 12. Records of Annex K 1. RDO 6th day of the Group Supervisor Investigation Form 40.01-B 2. File copy month 13. Monthly Report on Annex L 1. RDO 5th day of the Revenue Officer Pending Inventory of Form 19.64 2. File copy month Cases/Dockets 14. Records of Annex M 1. RDO 5th day of the Revenue Officer The Records of Investigation Investigation Form 40.01-C 2. File copy month (Appendices C1, C2, C3, C4 and C5) prescribed under RMO No. 14-81 shall be discontinued and instead the report prescribed herein shall be accomplished by the Revenue Officers. 15. Revenue Officer's Annex N 1 - N 25 1. Attached to the Revenue Officer Audit Report Form 1717/0500 docket Series 2. to be detached by the AD after approval of the report for transmittal to AS on the 15th day of the month 16. Revenue Officers Annex O 1. RDO 5th day of the Revenue Officer Field Report Form 1951 2. File copy month AD Assessment Division AS Assessment Service RDO Revenue District Office RO Regional Office ANNEX A Revenue Region No. ____ _____________________ Revenue District Office No. ____ _________________________ LIST OF TAXPAYERS SELECTED FOR AUDIT Name of Taxable Gross Income/Estate Selection PSIC Taxpayers Year Sales/Receipts Donor's Tax Code Estate/Donations Paid/Declared Per Return ________________________________ Revenue District Officer Date: ________________________ ANNEX B Tax Verification Notice ANNEX C MONTHLY LIST OF LETTERS OF AUTHORITY ISSUED Revenue Region No. ____,____________ For the Month of ______________ RDO No. ____, ________ LA No. Date Name of Taxpayer Taxable Selection Revenue Officer Issued Period Code Assigned LA No. Date Name of Taxpayer Taxable Selection Revenue Officer Issued Period Code Assigned LA No. Date Name of Taxpayer Taxable Selection Revenue Officer Issued Period Code Assigned ____________________________ Regional Director Signature Over Printed Name Note: 1. In case there is no issuance of LA for the month, the Regional Director will still submit the above report with the notation, "No LA issued for the Month". 2. The codes to be indicated under the Selection Code column refer to the Selection Codes outlined in the Revenue Memorandum Order on the 1999 Audit Program 3. Additional tables must be provided to coincide with the Revenue District Offices under the jurisdiction of the Regional Office. ANNEX D REGIONAL ACCOMPLISHMENT REPORT ON ASSESSMENT ACTIVITIES ANNEX E Monthly Report of Tax Credit/Refund Approved and Granted ANNEX F MONTHLY REPORT OF CLOSED CASES/DOCKETS ANNEX F-1 Instructions for BIR Form 0603 1. BIR Form 0603 will be completed monthly by Revenue District Offices in triplicate. The form is a district wide summary of the cases/dockets closed by individual Revenue Officers. The original form will be forwarded to the Assistant Commissioner, Assessment Service, one copy will be sent to the Revenue Regional Office and one copy will be retained by the Revenue District Office. The form will be completed and forwarded to the National Office and Regional Office on the 10 th day of the month immediately following the reporting period. llcd 2. BIR Form 0603 is divided into five sections. Section A through D apply to closed cases/dockets with Letters of Authority. Section E applies to closed cases/dockets without Letters of Authority. income tax-individuals including withholding returns income tax-corporations and partnerships including withholding returns value-added tax and excise tax estate tax, donor's tax and capital gains tax closed cases not covered by Letters of Authority The sections on income tax returns also include withholding tax investigations. Each Letter of Authority issued is counted as one audit. Under the package audit concept, Letters of Authority are applicable to all types of tax. In the event an excise tax return or a VAT return is audited before filing of the annual income tax return, the Letter of Authority will be issued for the applicable tax type (VAT or Excise). 3. Specific Instructions for BIR Form 0603 Heading Enter the revenue district office number and the name and the month covered by the report. Column 1 Tax Year information on reported cases (dockets) will be provided by tax year. Tax years 1999, 1998, 1997 and 1996 will be shown in separate lines. Data for the tax years 1995 and prior years will be combined and entered on single line. Column 2 Total Reported Dockets Enter the total number of dockets/cases closed during the month including original and reinvestigation audits. For purposes of this report, a docket is considered closed when it is forwarded to management for review consisting of the Chief, Assessment Unit, ARDO and the RDO. The data in this column should match the total of the data in Columns 4a and 4b Form 19.64S. Column 3 Breakdown of Closed Cases/Dockets This column breaks down the number of original audit investigation closed cases/dockets based on the Audit Work Plan Selection Code. The Audit Work Plan Selection Codes are outlined below. Note: Not all selection codes are applicable to each section of the report. Enter the total cases/dockets closed based on the selection code in each of the applicable columns. Each closed case will be entered in only one column. LibLex Column 3a Enter the number of tax refund/TCC (TCR) cases closed during the month in this column. Column 3b Enter the number of the third party information (TPI) audits that were closed during the month. Column 3c Enter the number of audits closed during the month that were selected on the recommendation of the Revenue District Officer (RDO). Column 3d Enter the number of audits closed during the month for taxpayers retiring from business with annual gross sales/receipts of P5,000,000.00 (RET). Column 3e Enter the number of audits closed during the month for claims for VAT credits/refunds exceeding P100,000 for the period(s) claimed. Column 3f Enter the number of audits closed during the month for taxpayers selected for audit based on the results of the tax mapping the program (MAP). Column 3g Enter the number of audits closed during the month for taxpayers subject to excise tax (EXT). Note: Audits of excise tax returns may occur before the filing of the annual income tax return. In those instances, the audits of the excise tax return would be shown in Section C, Value-Added Tax and Excise Tax. If the audit of the excise tax returns occur as part of a package audit originating with the audit of the income tax return of the taxpayer, the audit would be noted in Section A or Section B, Income Tax (Individual or Corporate). Column 3h Enter the number of audits closed during the month for taxpayers engaged in the Hotel and Motel industry (PSIC No. 9820) (HTL). Column 3i Enter the number of audits closed during the month for taxpayers engaged in the construction industry (PSIC No. 5011 through 5030) (CON). Column 3j Enter the number of audits closed during the month for taxpayers with the lowest percentage of tax payment based on gross sales/receipts for the top two industries within the RDO (TOP). Column 3k Enter the number of audits closed during the month for estate tax returns for which Letters of Authority were issued (EST). LibLex Column 3l Enter the number of audits closed during the month for donor's tax returns for which Letters of Authority were issued (DON). Column 3m Enter the number of audits closed during the month for VAT Tax Returns (VTR) audited under RMO No. 11-98, Priority Audit of 1996 and 1997 VAT Returns. Column 3n Enter the number of audits closed during the month for claims for tax credit/refund of corporate tax payers (MCO). Column 3o Enter the number of audits closed during the month for other claims for tax credit/refund, except VAT claims, exceeding P100,000 for the period covered (OTR). Column 3p Enter the number of audits closed during the month for 1996 tax returns of taxpayers who availed of the Voluntary Assessment Program but are referred for investigation by the National Office Voluntary Assessment Committee (VAP). Column 3q Enter the number of audits closed during the month for government withholding agents on the withholding tax liabilities of these agencies (GWA). Column 3r Enter the number of audits closed during the month for taxpayers whose tax due per return is less than 2% of the gross sales/revenue (TDR). Column 3s Enter the number of audits closed during the month for manufacturers/wholesalers (MFW). Column 3t Enter the number of audits closed during the month for recreational and cultural services (RCS). Column 3u Enter the number of audits closed during the month for claims for tax credit/refund arising from withholding tax on purchases made by top 5,000 taxpayers pursuant to RR No. 2-98 where the amount of claim exceeds P100,000.00(RLT). Column 3v Enter the number of audits closed during the month for claims for transfer of property in exchange for shares of stocks and other sale, transfer or exchange of stocks where the zonal value of the property or the book value of the stocks exceeds P10,000,000.00 (TSS). LibLex Column 3w Enter the number of audits closed during the month for taxpayers selected in the district who filed break-even returns or with returns showing net loss for at least two consecutive years (BEL). Column 3x Enter the number of audits closed during the month for top 100 taxpayers in the district in terms of gross sales/receipts where there is no VAT or percentage tax payment for the current year and the immediately preceding year (ZVP). Column 3y Enter the number of audits closed during the month for taxpayers with twenty percent (20%) reduction in the current year's gross sales/receipts over that of the immediately preceding year (SRS). Column 3z Enter the number of audits closed during the month for taxpayers who are top 100 direct and indirect exporters in terms of gross sales/receipts (DEX). Column 3aa Enter the number of audits closed during the month for taxpayers selected by the RDO to be audited from the priority target industries prescribed under this RMO (PTL). Column 3ab Enter the number of audits closed during the month for taxpayers selected for tax audit based on the results of the tax mapping program. (TMP). Column 3ac Enter the number of audits closed during the month for taxpayers who did not avail of the Economic Recovery Assistance Program (ERAP) under Revenue Regulations under 2-99 and Revenue Memorandum Order No. 10-98 (ERP). Column 3ad Enter the number of audits closed during the month for Taxpayers who made partial availment of the ERAP to the extent of the Tax liability not covered by the availment (PRP). Column 3ae Enter the number of audits closed during the month for taxpayers identified by top management (NOM). llcd Column 3f Enter the number of audits closed during the month for taxpayers selected for taxpayers selected for audit based on previous selection criteria outlined under prior Audit Programs that were not identified in any of the selection codes in this RMO. Column 4 Enter the number of reinvestigations/protested cases closed during the month (REV). Note: The sum of Columns 3 and 4 should equal Column 2. Breakdown of Closed Cases/Dockets Not Covered by Letters of Authority (Section E) Column 1 Tax Year Information on reported cases (dockets) will be provided by tax year. Tax years 1999, 1998, 1997, and 1996 will be shown on separate lines. Data for tax years 1995 and prior years will be combined and entered on single line. Column 5 Total Reported Dockets Enter the total number of dockets/cases closed during the month not covered by Letters of Authority. For purposes of this report, a docket is considered closed when it is forwarded to management for review (i.e. group supervisor or Chief, Assessment Unit). Column 6a Enter the number of capital gains tax return (CGT) audits not covered by Letters of Authority that were closed during the month in this column. Column 6b Enter the number of estate tax return (EST) audits not covered by Letters of Authority that were closed during the month in this column. Column 6c Enter the number of donors tax return (DON) not covered by Letters of Authority that were closed during the month in this column. Column 6d Enter the number of audits not covered by Letters of Authority closed during the month for taxpayers retiring from business where the annual gross sales/receipts was less than P5,000,000.00 (RET) in this column. Column 6e Enter the number of protested cases (PRO) not covered by Letters of Authority that were closed during the month in this column. Column 6f Enter the number of claims for VAT credit/refund (VAT) audits not covered by Letters of Authority that were closed during the month in this column. Column 6g Enter the number of tax refund/TCC (TCR) audits not covered by Letters of Authority that were closed during the month in this column. Report Summary Line 1 Enter the total number of cases/dockets closed this month with Letters of Authority. (Sum of Column 2, Sections A through D.) Line 2 Enter the total number of cases/dockets year to date (August 1, 1999 through the current month) with Letters of Authority. Line 3 Enter the 1999 Annual Audit Work Plan as prescribed under this Order. Line 4 Enter the percentage of completion on the prescribed Annual Audit Work Plan. Line 5 Enter the total number of cases/dockets closed this month without Letters of Authority. (Sum of Column 5, Section E.) Line 6 Enter the total number of cases/dockets closed this year to date (August 1, 1999 through the current month) without Letters of Authority. Approval The Revenue District Officer shall require the Chief of the Assessment Unit to take responsibility in the preparation of BIR Form 0603 and ensure its completeness and accuracy by comparing the data in Column 2 with the data in Column 4 of BIR Form 19.64S. The Assistant RDO will review, approve, and sign BIR Form 0603 certifying its correctness and indicating thereon the date of its approval. BIR Form 0603 must be submitted to the Assistant Commissioner, Assessment Service not later than the 10 th day of the following month. A copy of this report shall also be submitted to the Revenue Regional Director. 4. The data on this form will be periodically checked as to accuracy by the Revenue Officers in the Assessment Service from the National Office. Timeliness of submission and accuracy of this form and all other BIR management information reports will be considered during the performance evaluation of Revenue District Officers and Revenue Regional Directors. ANNEX G MONTHLY STATUS OF LETTERS OF AUTHORITY ISSUED AND ACTED UPON ANNEX H MONTHLY SUMMARY OF ASSESSMENT AND COLLECTION ACTIVITIES ANNEX I MONTHLY INVENTORY OF PENDING CASES/DOCKETS ANNEX J Monthly Report of Tax Credit/Refund Processed ANNEX K RECORDS OF INVESTIGATION ANNEX L INVENTORY OF PENDING CASES/DOCKETS ANNEX M RECORDS OF INVESTIGATION ANNEX N BIR Forms ANNEX N-2 BIR Forms 501 ANNEX N-3 BIR Forms 502 ANNEX N-4 BIR Forms 503 ANNEX N-5 BIR Forms 504 ANNEX N-6 BIR Forms 505 ANNEX N-7 BIR Forms 506 ANNEX N-8 BIR Forms 507 ANNEX N-9 BIR Forms 508 ANNEX N-10 ANNEX N-11 BIR Forms 510 ANNEX N-13 BIR Forms 512 ANNEX N-14 BIR Forms 513 ANNEX N-15 BIR Forms 514 ANNEX N-16 Revenue Officer's Audit Report on Income Tax ANNEX N-17 Revenue Officer's Audit Report on Income Tax ANNEX N-18 Revenue Officer's Audit Report on Income Tax ANNEX N-19 Revenue Officer's Audit Report on Income Tax ANNEX N-20 Revenue Officer's Audit Report on Income Tax ANNEX N-21 Revenue Officer's Audit Report on Income Tax ANNEX N-22 Revenue Officer's Audit Report on Income Tax ANNEX N-23 Revenue Officer's Audit Report on Income Tax ANNEX N-24 Revenue Officer's Audit Report on Income Tax ANNEX N-25 Revenue Officer's Audit Report on Income Tax ANNEX N-26 Revenue Officer's Audit Report on Income Tax ANNEX O REVENUE OFFICER'S FIELD REPORT ANNEX P Assessment Division Revenue Region No. ___, _____________ MONTHLY REPORT ON CASES/DOCKETS RECEIVED FROM INVESTIGATING OFFICES FOR REVIEW For the Month of ___________ Date of Receipt RDO No. Name of Taxpayer Authority/Notice/No. Kind of Tax Period Name of Case Remarks Covered Investigating Code* Revenue Officer LA TVN/RVO case classification: OR- Cases/dockets transmitted for review by the investigating office for the first time RI- Cases/dockets reinvestigated by RDOs RR- Cases/dockets previously returned to the investigating office for compliance with review requirements Assessment Division Revenue Region No. ___, _____________ MONTHLY REPORT ON CASES/DOCKETS RECEIVED FROM INVESTIGATING OFFICES FOR REVIEW For the Month of _______________ Summary of Cases Dockets Received RDO. No. ____ Number of Cases/Dockets RDO. No. ____ RDO. No. ____ RDO. No. ____ RDO. No. ____ Original Report Reinvestigat Returned Total ion Report Dockets/ Cases Total ___________________________________ Chief, Assessment Division Signature Over Printed Name ANNEX Q Assessment Division Revenue Region No. ___, _____________ MONTHLY REPORT ON REVIEWED CASES For the Month of ___________ A. Cases Recommended for Approval A.1 Paid/Closed (at the RDO level) and Assessed Cases RDO Number Date Indicate Name of Tax Revenue Deficiency Tax Per Review Findings No. Issued whether Taxpayer Type Officer RDO Approved OR, RR Assigned Upon Review or RI* LA TVN/RVO Assessments Collections Code* Remarks Total OR - refers to report of investigation reviewed for the first time RR - refers to reviewed report of investigation previously returned for compliance to the investigating office RI - refers to report of investigation previously returned to the investigating office for reinvestigation Indicate the code corresponding to the recommendation made under the Code column - A For issuance of assessment notice B For issuance of termination letter C For issuance of confirmation letter D Others (please specify) A.2 Claims for Tax Credit/Refund Cases RDO Number Date Indicate Name of Nature Type of Revenue Amount Amount Recommended for No. Issued whether Claimant of tax Officer Claimed Approval and Issuance of OR, RR Claim Claimed Assigned Tax Credit/Refund by or RI* (TC or TR) LA TVN/R BIR BOC VO Total TC - refers to claim for tax credit TR - refers to claim for tax refund B. Returned Cases B.1 Paid/Closed (at the RDO level) and Assessed Cases RDO Number Date Indicate Name of Tax Revenue Deficiency Tax Per Deficiency Tax Per Review Findings No. Issued whether Taxpayer Type Officer RDO Review OR, RR Assigned or RI* LA TVN/RVO Assessments Collections Assessments Collections Code* Remarks Total the return of the docket to the RDO under the code column - A Mandatory assessment B Deficient in reporting requirements C For further investigation/verification D For reinvestigation E Others (please specify) B.2 Claims for Tax Credit/Refund Cases RDO Number Date Indicate Name of Nature Type of Revenue Amount Recommended by Amount No. Issued whether Claimant of tax Officer the RDO for Approval and Recommended OR, RR Claim Claimed Assigned Issuance of Tax by the or RI* (TC or Credit/Refund by Assessment TR) Division for Issuance of Tax Credit/Refund LA TVN/R BIR BOC BIR BOC VO Total C. Summary of Reviewed Cases 1. With Letters of Authority RDO No. ____ RDO No. RDO No. RDO No. Total ____ ____ ____ No. of reports of investigation (ROIs) for review, beginning of the Month Add: No. of ROIs received during the month: Cases previously returned to RDO for compliance with review requirements Original investigation Total ROIs received Less: No. of ROIs reviewed during the month: ROIs returned to RDOs for compliance with review requirements ROIS approved Total ROIs reviewed NO. of ROIs for review, end of the month % of approved ROIs over total ROIs reviewed during the month RDO No. ____ RDO No. RDO No. RDO No. Total ____ ____ ____ No. of reports of investigation (ROIs) for review, beginning of the Month Add: No. of ROIs received during the month: Cases previously returned to RDO for compliance with review requirements Original investigation Total ROIs received Less: No. of ROIs reviewed during the month: ROIs returned to RDOs for compliance with review requirements ROIS approved Total ROIs reviewed NO. of ROIs for review, end of the month % of approved ROIs over total ROIs reviewed during the month Note: The number of reports of investigation refers to the number of LAs and TVNs/RVOs and not the number of Revenue Officer's Audit Report (BIR forms 1717/0500 Series). ______________________________ Chief, Assessment Division Signature Over Printed Name ANNEX R BIR REPUBLIKA NG PILIPINAS FORM NO. 40 KAGAWARAN NG PANANALAPI REVISED: AUGUST, 1994 KAWANIHAN NG RENTAS INTERNAS PAGE ____ OF ___ SHEETS NATIONAL OFFICE/REVENUE REGIONAL OFFICE? MONTHLY SUMMARY OF TAXES ASSESSED FOR THE MONTH OF ______________, 19___ NAME AND ADDRESS OF TAXPAY KIND ASSESS PERIO DUE AMOUNT ASSESSED TOTAL REMA TAXPAYER (1) ER OF MENT D DATE AMOUNT RKS IDENTIFI TAX NUMBER COVE (6) DUE (9) CATION (ATC) (4) RED (5) (7 + NUMBER (3) 8) (2) DEFICIENCY TAX PENALTIES (8) (7) SURCHARGE (a) INTERES COM T (b) PRO MISE (c) TOTAL P P P P P __________________________________ DIVISION CHIEF DATE: ______________