Oplan Accounts Receivable (AREC)

August 27, 1998 REVENUE MEMORANDUM ORDER NO. 68-98 SUBJECT : Oplan Accounts Receivable (AREC) TO : All Internal Revenue Officers and Others Concerned I. BACKGROUND Accounts Receivable has always been a perennial problem of the Bureau. It has been increasing over the years because of lack of proper and effective management. Although we have established the extent of our receivables with a certain degree of accuracy collection enforcement thereof have not been efficiently pursued. II. OBJECTIVES To enhance collection of internal revenue taxes through an effective disposition and management of accounts receivables. To establish the actual receivable accounts profile of the Bureau through an inventory of collection dockets. To adopt an efficient monitoring system and control of current account at its source, under BIR Form 40.00. Identify, and manage, Acquired Assets and the manner of their disposition. Determine training requirements of Revenue Officers. To establish data base preparatory to the full implementation of the Accounts Receivable System (ARS) under the Integrated Tax System (ITS). III. COMPOSITION OF THE TASK FORCE A. NATIONAL OFFICE COLLECTION TASK FORCE (For Accounts Receivable Involving P1,000,000.00 and above) Assistant Commissioner Collection Service, as Project Coordinator, Head Revenue Executive Assistant Collection Service, as Assistant Project Coordinator, Representative from Assessment and Legal Service. Chiefs, of Collection Division of Regions 4, 5, 6, 7, 8 and 9 and a selected Revenue Enforcement Officers drawn from the Regional/ District Office and the National Office. B. REGIONAL COLLECTION TASK FORCE (For Accounts Receivable involving ONE HUNDRED THOUSAND BUT NOT MORE THAN ONE MILLION Regional Office ; For Accounts Receivable Involving ONE HUNDRED THOUSAND AND BELOW Revenue District Office . Assistant Regional Director as Head of Regional Collection Task Force, members: Assistant Chief, Collection Division, Chief, Assessment Division, Chief, Legal Division Chief Administrative Division, Assistant Revenue District Officers and Revenue Officers in the Collection Division. IV. DUTIES AND FUNCTIONS OF THE TASK FORCE To evaluate and analyze each docket to determine its collectibility; To ascertain whether or not the taxpayer has leviable/distrainable properties/assets, To determine the enforceability of the assessments; To ascertain whether or not summary processes of Warrants of Distraint and Levy have been issued, if none, to cause the issuance thereof. To execute the summary processes of Warrants of Distraint and Levy if account is collectible; To evaluate the requests of the taxpayers for compromise settlements and installment payments, To prepare Payment Order (BIR Form 0605 to the authorized Agent bank, and to be signed by the Assistant Commissioner (Collection) or his duly authorized representative, for the National level, the Assistant Regional Director for the Regional level; To monitor the actions taken by concerned office on all protested cases; To prepare ATCA on all terminated cases to be signed by the Assistant Commissioner (Collection) as recommending official and Deputy Commissioner (Operations) as the approving official in cases where the amount involved is P1,000,000.00 or above, and the Chief, Collection Division as recommending official, and the Regional Director as approving official in all cases involving less than P1,000,000.00. The National Task Force shall furnish the Regional Office concerned with a copy of the list of cases terminated/closed. To recommend the "Write Off" or Closure of accounts under the following circumstances: a. If the case is prescribed. Cause(s) of prescription should be traced and explained satisfactorily; b. If taxpayer is insolvent. c. If taxpayer is deceased leaving no leviable/distrainable assets; d. In case of Corporation if corporation is defunct/bankrupt with no leviable/distrainable assets and Securities and Exchange Commission (SEC) records should be consulted to determine whether or not stockholders of the corporation have outstanding or unpaid subscriptions to the corporation; e. If taxpayer is already an immigrant to another country leaving no leviable/distrainable assets; or if taxpayer is a foreigner and had left the country. Any tax lien issued to enforce collection of the account of the taxpayer may be lifted by the Deputy Commissioner Operations or his authorized representative after it has been ascertained that account has been paid/closed, V. RESPONSIBILITIES A progress report must be submitted by the Revenue Officer(s) assigned to the case to the Head of the National Project Coordinator or the Head of the Regional Task Force as the case may be, within ten (10) days after assignment on the action(s) taken on the case. dctai The National Task Force shall oversee/monitor the activities of the Regional Task Force, while the Regional Task Force shall oversee/monitor the activities of the District Offices. The National and the Regional Task Forces shall submit performance reports to the Commissioner of Internal Revenue on a monthly basis. All Revenue Officers assigned to handle cases shall be personally responsible at all times of the tax dockets under their custody, and shall, in no case, bring out the tax docket out of the office. VI. GENERAL GUIDELINES Only the Commissioner of Internal Revenue or in his absence, the Deputy Commissioner (Operations) is authorized to grant requests for review, re-investigation, and reconsideration of the assessment. Request for payment on "installment" shall be approved by the Commissioner or in his absence, the Deputy Commissioner (Operations) on all cases involving the amount of One Million and above; the Regional Director or in his absence, the Asst. Regional Director on all cases involving the amount of Less than One Million, The Commissioner of Internal Revenue or in his absence, the Deputy Commissioner (Operations) shall sign all WDLs to be issued involving the amount of ONE MILLION and above; The Regional Director or in his absence, the Asst. Regional Director for WDLs to be issued involving the amount of less than ONE MILLION. WDLs may be issued immediately after the account has become delinquent. Protests involving questions of fact should be referred to the district office having jurisdiction over the taxpayer, while protest involving questions of law should be referred to the Legal Service; The concerned office tasked to undertake the review, re-investigation and reconsideration of the assessment must inform the Task Force the result of its findings in writing within 45 days after receipt of the docket; The Project Coordinator of the Task Force shall evaluate and analyze the monthly performance of all Regional/District Offices on Accounts Receivable. Collections made by the Task Force will be accordingly credited to the district office having jurisdiction over the taxpayer; Dockets of terminated cases should be forwarded to the Chief, Administrative Division of the Regional Office having jurisdiction over the taxpayer for file, and future reference. VII. EFFECTIVITY This memorandum takes effect immediately. prcd (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue ACTION PLAN OPLAN "AREC" Commence September 1, 1998 OFFICE/PERSON ACTION RESPONSIBLE TIMETABLE 1. Forward all Accounts Receivable Regional Director September dockets involving; One Million Revenue District 15,1998 Pesos and above to the Collection Officer Division. Collection Supervisor 2. National Office Collection Task HREA - Collection September 7, Force (NOCTF) will meet at least Service, Assistant 1998 and onward once a week or as often as necessary Project Coordinator. at the Regional Offices to evaluate Chief, Collection and analyze the collectibility of the Divisions accounts. Representatives Legal and Assessment Service. 3. NOCTF will be divided into groups NOCTF Members September 2, to be deployed to the different HREA - Collection 1998 Regional Offices in order to Service, Assistant maximize the number of tax Project Coordinator. dockets analyzed and evaluated. Chief, Collection Divisions Representatives Legal and Assessment Service. 4. Brief National Office Collection ACIR - Collection September 2, Task Force (NOCTF) on BIR Service, Project 1998 Collection Manual and other Coordinator strategies. HREA - Collection Service, Assistant Project coordinator 5. Brief Regional Collection Task HREA Collection September 3 to Force (RCTF) on BIR Collection Service, Assistant 9, 1998 Manual and other strategies (Region Project Coordinator 4, 5, 6, 7, 8 & 9). Assistant Regional Director Chief, Collection Division 6. Task Force groups will evaluate and Task Force September 10 analyze all tax dockets for Members to October 9, collection. Assign Tax dockets to Task Force Project 1998 Revenue Officers to enforce actions. Coordinator Task Force Asst. Project Coordinators Chief, Collection Divisions Representatives Legal and Assessment Service. 7. Prepare Collection letter regarding Task Force September 10 taxpayers to pay tax liabilities Members to October 9, within ten (10) days from receipt Task Force Project 1998 hereof Coordinator Task Force Asst. Project Coordinators Chief, Collection Divisions Representatives Legal and Assessment Service. 8. Collection Enforcement Actions: Task Force Starting 8.1 Prepare summary processes of Members September 10, Warrants of Distant and Levy Task Force Asst. 1998 as the (WDL), Notice of Tax Lien Coordinator need arises. (NTL), if necessary. Task Force Asst. 8.2 Serve the Warrants of Distraint Project Coordinators and Levy to the delinquent taxpayers, and the servicing Chief, Collection officer must submit a return Divisions endorsement to the Head of the Representatives Task Force within 10-days of the Legal and Assessment actions taken thereon. Service. 8.3 Search for Assets/Properties of delinquent taxpayers from Register of Deeds, Securities and Exchange Commission, Land Transportation Office, City/ Provincial Assessors, Barangays, and from other Sources. 8.4 File Notices of Tax Lien, Notice of Levy, Notice of Sale, Notice of Seizure of Real Property and Notice of Declaration of Absolute Forfeiture to the Register of Deeds, (for lack of qualified bidders, and if declared forfeited in favor of the government after the lapse of the one (1) year reglementary period to redeem) Land Trans- portation Office (LTO), and other concerned Government Offices. 8.5 Submission of Progress-Reports : by the Revenue Officers to the Head National/Regional/ District Collection Task Force using the prescribed format. 8.6 Cause the publication of Notice of Sale of Seized Properties 8.7 Conduct public bidding of seized real properties and submit within 3-days to the Head of Task Force the minutes of the proceeding of the public auction. 8.8 Cause the transfer of Title of property so sold to the highest bidder subject to one (1) year reglementary period to redeem. 8.9 Post Notice of Sale at least 3 public places in the barangay where the taxpayer is residing, if the process is distraint. 8.10 Cause the publication to the newspaper of general circulation of at least once a week for 3 consecutive weeks, if the process is levy. 8.11 Withdrawing funds for publication from Finance Division of Regional Offices having jurisdiction of the properties of taxpayer. 8.12 Prepare lifting of notice of tax lien on properties when the account is settled, and those that have been previously paid, and/or accounts of taxpayer which were cancelled/close by other dispositions. 8.13 Prepare lifting of garnishment of bank deposits.