Investigation of Top Twenty (20) Taxpayers in the District Offices

October 5, 1998 REVENUE MEMORANDUM ORDER NO. 75-98 TO : All Assistant Commissioners, Regional Directors, Revenue District Officers and All Others Concerned SUBJECT : Investigation of Top Twenty (20) Taxpayers in the District Offices I. POLICIES In line with the policy of this Bureau to strictly monitor the tax compliance of large taxpayers, there shall be a lifting of the ban on audit investigation under Revenue Memorandum Order (RMO) No. 59-98 of the top twenty (20) taxpayers in each Revenue District. prcd II. GUIDELINES AND PROCEDURES 1. Each Revenue District Officer (RDO) shall identify the top twenty (20) income and VAT taxpayers in their respective districts and submit the list to the Regional Director for approval and issuance of Letter of Authority (LA). 2. Prior to issuance of LA, the Regional Director shall furnish the Office of the Commissioner a copy of the list of top twenty (20) taxpayers for purposes of verifying whether or not the taxpayer is included in the policy and tax fraud cases of the Commissioner. 3. All LA shall be issued and signed by the Regional Director. In no case shall a Revenue District Officer be authorized to issue LA under this program. 4. Taxpayers that fall under the jurisdiction of the following policy and tax fraud cases of the Commissioner are excluded from the investigation by the District Offices: a. Policy Cases on Interrelated Group of Companies pursuant to RMO No. 61-98 and Revenue Special Order (RSO) No. 673-98; b. Policy Cases on Banks and Insurance under RSO No. 697-98; c. Cases under investigation by the Tax Fraud Division of the National Office and Special Investigation Divisions of the Regional Offices; d. All other cases covered by LA issued by the Commissioner. 5. In case of conflict between LA's issued under the policy and tax fraud cases of the Commissioner and those issued under this RMO by the Regional Directors, the former shall prevail. 6. Regional Directors may issue additional LA's (other than the top twenty (20) taxpayers) only upon prior approval of the Commissioner based on a written request and justification for the necessity of investigation submitted by the Regional Director. prLL 7. In all cases, the prescribed audit procedures and general guidelines in the investigation of internal revenue tax liabilities shall be followed. 8. Investigation shall cover all internal revenue tax liabilities for taxable year 1997 and all uninvestigated prior years. 9. The Assessment Service shall monitor audit results and compliance with policy statements of the Bureau. In this regard, Regional Directors shall submit to the Assessment Service a list of all LA's issued. The existing procedures with respect to time, manner, and format on submission of reports shall be followed. 10. The Assessment Service shall likewise work with the Revenue Regions to achieve a uniform program direction and furnish assistance when needed. III. EFFECTIVITY This Order shall take effect immediately. (SGD.) BEETHOVEN L. RUALO Commissioner