Prescribing the Procedures in the Transmittal and Processing of the Annual Information Return on Income Tax Withheld on Compensation, Expanded and Final Withholding Taxes (BIR Form No. 1743-IR or 1604) and the Monthly Remittance Return of Internal Revenue Taxes on Government Money Payments (BIR Form No. 750AV or 1600)

November 4, 1998 REVENUE MEMORANDUM ORDER NO. 80-98 SUBJECT : Prescribing the Procedures in the Transmittal and Processing of the Annual Information Return on Income Tax Withheld on Compensation, Expanded and Final Withholding Taxes (BIR Form No. 1743-IR or 1604) and the Monthly Remittance Return of Internal Revenue Taxes on Government Money Payments (BIR Form No. 750AV or 1600) TO : Asst. Commissioner, Information System and Operation Service Assistant Commissioner, Collection Heads Revenue Data Centers Revenue District Officers Chiefs of Assessment Division Chief , Withholding Agents Monitoring Division and Others Concerned I. COVERAGE: This order shall cover all unprocessed 1743IR/1604 and 750AV/1600 returns for calendar year 1997 and subsequent year/s, filed in Revenue District Offices of Metro Manila which are not yet covered by the Integrated Tax System (ITS) particularly the Tax Reconciliation System. Returns filed by Large Taxpayers shall be processed by the Large Taxpayers Division. A separate RMO will be issued for this purpose. II. OBJECTIVE: This order is being issued for the following purposes: 1. To prescribe procedures for a centralized processing of the withholding tax forms (1743IR/1604 and 750AV/1600) filed in Metro Manila RDOs; 2. To provide a more effective system in processing and monitoring the aforesaid forms; and 3. To enhance voluntary compliance of Withholding Agents (WAs). III. POLICIES and GUIDELINES: The following policies and guidelines shall be observed: A. All 1743-IR/1604 and 750AV/1600 which were not yet pre-audited at the district office shall be transmitted to the Withholding Agents Monitoring Division (WAMD), for processing. B. Withholding tax forms filed in RDOs where the Tax Reconciliation System (TRS) of the ITS have been rolled-out and those which are scheduled to be rolled-out within the calendar year, shall be processed at the RDO concerned, following existing procedures. C. All Monthly Remittance Returns filed (BIR Form No. 1743W/1601) shall be pre-audited at the respective RDOs where the taxpayers/WAs are registered, following existing procedures. D. Withholding Tax Returns (BIR Forms 1743W/1601, 1743IR/1604, 750AV/1600 and 1602) filed in RDOs of Revenue Regions except in Metro Manila, shall also be processed and pre-audited by the respective RDOs concerned. E. Issuance of Final Assessment Notices shall be done at the Regional Office, Assessment Division, having jurisdiction over the principal place of business/residence of the taxpayer/WA. F. Processing of returns filed in Other Region shall be monitored by Revenue Officers of WAMD thru submission of report (BIR Form W-8) and spot checking of records and other documents. IV. PROCEDURES: A. REVENUE DATA CENTERS (RDCs) REVENUE DISTRICT OFFICES (RDOs) INFORMATION SYSTEMS OPERATION SERVICE (ISOS) Document Processing Section (DPS) 1. Batch returns (per type of form) in 50's or less and number the batches consecutively. (e.g. For 1743IR/1604: Region 1, RDO 1, Batch No. 1. For 750AV/1600: Region 1; RDO 1; Batch No. 1) 2. Prepare transmittal sheet indicating the Name (Surname, First, Middle) Address, Taxpayer Identification Number and Batch No. (using Annex "A"). 3. Transmit returns (1743-IR/1604 and 750AV/1600) for taxable year 1997 and subsequent years, to the Withholding Agents Monitoring Division not later than November 16, 1998 and every 15 th day of the following month after receipt of the return, thereafter. B. WITHHOLDING AGENTS MONITORING DIVISION (WAMD) B.1 ADMINISTRATIVE SECTION 1. Acknowledge receipt of returns in batches by stamping the date of receipt in copies of transmittal lists; 2. Check the number of returns and its completeness against the transmittal list received; 3. Attach an Assignment Control Slip to batches of returns for assignment to Revenue Officers for Pre-audit; 4. Transmit "Pre-audited" returns with complete information and no discrepancies to RDC or ISOS concerned; 5. Transmit returns with Preliminary Assessment Notices (PANs) which were not settled or paid after 30 days from the date of issuance to the Assessment Division of the Regional Office having jurisdiction over the principal place or office of the Taxpayer/WA, for preparation of the Final Assessment Notice (FAN). LLpr B.2 MONITORING AND EVALUATION SECTION 1. Pre-audit the returns as follows: a) Check completeness of required information. b) For PERFECT returns file returns according to RDO, batch no., period covered and type of return, for transmittal to RDG or ISOS. c) For IMPERFECT returns with incomplete information such as; period covered, TIN, Date of payment, Monthly breakdown of remittances (in the case of 1743-IR (old Form) and 750 AV/1600), Nature of Income Payments, etc. send letter to taxpayer/WA using ANNEX "B". d) For IMPERFECT returns with discrepancies such as: Underremittance, Underwithholding, Late Remittance and Non-compliance to Year-End Adjustment compute for penalties and prepare a PAN to be sent to taxpayers/WAs using ANNEX "C". 2. Evaluate reply of taxpayer/WA, and in case assessments were protested, refer to appropriate office for action. (i.e. with legal aspects Legal Service with factual questions but will involve further investigation RDO concerned) 3. Prepare payment form (BIR Form 0605) in case of settlement of the case. 4. Prepare Monthly Report of Activities to the Deputy Commissioner of Internal Revenue (Operations) thru the Assistant Commissioner of Internal Revenue (Collection). C. ASSESSMENT DIVISION/REGIONAL OFFICE 1. Receive transmittal of returns with PAN from the Withholding Agents Monitoring Division. 2. Prepare and Issue a FAN following existing procedures. D. ISOS/RDC 1. Computer process all perfect returns received from WAMD. E. ASSISTANT COMMISSIONER, COLLECTION 1. Review/initial or sign the Preliminary Assessment Notices. 2. Review/initial or sign the Payment Form. IV. REPEALING CLAUSE All revenue memorandum orders inconsistent herewith are hereby repealed. V. EFFECTIVITY This revenue memorandum order shall take effect immediately. (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue ANNEX A ANNEX B ANNEX C