Summary Remedies for Collection of Taxes

April 21, 1969 REVENUE REGULATIONS NO. 03-69 SUBJECT : Summary Remedies for Collection of Taxes TO : All Internal Revenue Officers and Others Concerned Pursuant to the authority granted in Section 338 of the National Internal Revenue Code, in relation to Section 4 thereof, the following regulations governing the procedures to be followed in the issuance and execution of warrants of distraint, levy and/or garnishment of properties belonging to delinquent taxpayers as well as the administration, control and disposition of such properties are hereby promulgated and shall be known as the "Regulations on Summary Remedies". SECTION 1. Purpose and scope . These regulations propose to establish the procedures to be followed in the collection of delinquent taxes by the summary remedies provided for in Title IX of the Tax Code, as amended by Republic Act No. 5203, and to provide effective control over the properties placed under distraint, levy and/or garnishment on account of the repeated failure of the delinquent taxpayers to settle their tax liabilities; to fix the responsibility of officers charged with the various functions in connection therewith; and to provide the manner of reporting the actions taken relative thereto. SECTION 2. Definition of terms . As used in these regulations, the following terms shall mean as follows: a. " Distraint " refers to seizure of personal properties such as goods, chattels or effects, and other personal property of whatever character, including stocks and other securities, debts, credits, bank accounts, and interest in and rights to personal property, as used in the National Internal Revenue Code (Sec. 316). b. " Levy " refers to seizure of real properties and interest in or rights to such properties, as used in the Tax Code (Sec. 324). c. " Garnishment " "is a proceeding in the nature of an attachment, by means of which credits, property, or effects of a debtor in the hands of a third person may be subjected to the payment of claims of the creditor of such debtor." (Words & Phrases, Vol. 18, page 127). d. " Constructive Distraint " the distraining officer does not take actual possession of the properties distrained but leaves them with the taxpayer who shall be obligated to preserve the same intact and unaltered and not to dispose of the same in any manner whatever without the express authority of the Commissioner of Internal Revenue (Sec. 317). e. " Actual Distraint " the distraining officer seizes and takes actual possession of the personal property of the delinquent taxpayer. SECTION 3. When to issue warrant of distraint, levy and/or garnishment . The distraint of personal properties or garnishment of stocks and other securities, debts, credits and/or bank accounts and levy on real property of a delinquent taxpayer shall be effected after reasonable efforts have been exerted to collect the tax by ordinary methods of collection but in no case earlier than three months nor later than six months from the date the taxpayer received the letter of demand. Levy on real property may be effected before, simultaneously, or after the distraint of personal property belonging to the delinquent taxpayer. In case the levy on real property is not effected before or simultaneously with the warrant of distraint on personal property, and the personal property of the taxpayer is not sufficient to satisfy his tax delinquency, the Revenue District Officer, the Revenue Regional Director or the Commissioner of Internal Revenue, as the case may be, shall within thirty (30) days after execution of the distraint proceed with the levy on the taxpayer's real property. A warrant of distraint, levy or garnishment shall not cover compromise penalty for the violation of internal revenue law or regulation. Compromise penalties are not collected by distraint, levy or garnishment. Instruction to collect in cash such compromise penalty shall be indicated on the left side of the warrant on a level with the name of the official signing it if no action in court has been filed or contemplated to be filed to enforce collection thereof. Before or simultaneously with the service of a warrant of levy, a notice of tax lien shall be issued and filed in the office of the Register of Deeds of the city or province where the real property of the taxpayer is located. SECTION 4. Preparation of warrant of distraint, levy and/or garnishment . Warrants of distraint, levy and/or garnishment shall be prepared by the Tax Accounts Division for any case involving an assessment of more than P20,000, by the Revenue Regional Director for any case involving an assessment of more than P5,000 but not more than P20,000, and, by the Revenue District Officer for any case involving an assessment of not more than P5,000.00. Warrants prepared by the Tax Accounts Division for any case involving more than P100,000 shall be signed by the Commissioner of Internal Revenue; for any case involving more than P50,000 but not more than P100,000 shall be signed by the Deputy Commissioner of Internal Revenue for Operations; and for any case involving more than P20,000 but not more than P50,000 shall be signed by the Revenue Operations Head (Collection) for the Commissioner of Internal Revenue. Warrants issued by the Revenue Regional Director shall be signed by him and warrants issued by the Revenue district Officer shall be signed by said officer. A warrant of distraint or levy or garnishment shall show clearly the name and address of the delinquent taxpayer, the assessment and/or demand number and year covered, and the exact amount of taxes and increments thereto, if any, due and demanded. SECTION 5. Service and execution . (a) The internal revenue officer designated to serve the warrant of distraint and/or levy shall serve the same personally upon the delinquent taxpayer himself. In a case, however, where the taxpayer refuses to receive the warrant or is absent from his given address, the warrant shall be served upon someone of suitable age and discretion in the premises or upon the person in possession or occupant of the property of the delinquent taxpayer who shall acknowledge and sign all copies of the warrant. In case actual service of the warrant upon the delinquent taxpayer or upon either of the two other persons mentioned above cannot be made, a copy thereof shall be left in the premises or in the taxpayer's place of business or in the place of the person in possession or occupant of the property of the taxpayer which fact shall be attested to in said copy and in all the other copies of the warrant by the distraining or levying officer and at least two credible witnesses, and the warrant is deemed properly served. A copy of the warrant thus served shall be furnished the delinquent taxpayer with a notation thereon that a copy of the same was left with the person who is in possession or occupant of his property. Stocks and other securities shall be distrained by serving a copy of the warrant of distraint upon the taxpayer and upon the president, manager, treasurer, or other responsible officer of the corporation, company, or association, which issued the said stocks or securities. Debts and credits shall be distrained by leaving with the person owing the debts or having in his possession or under his control such credits, or with his agent, a copy of the warrant of distraint. The warrant of distraint shall be sufficient authority to the person owing the debts or having in his possession or under his control any credits belonging to the taxpayer to pay to the Commissioner of Internal Revenue the amount of such debts or credits. Bank accounts shall be distrained by serving a warrant of distraint upon the taxpayer and upon the president, manager, treasurer, or other responsible officer of the bank. Upon receipt of the warrant of distraint, the bank shall turn over to the Commissioner of Internal Revenue so much of the bank accounts as may be sufficient to satisfy the claim of the Government. If the properties distrained are registered with any government office, the internal revenue officer who served the warrant shall notify in writing the government official concerned of the fact of such distraint the notifications shall contain the following data: 1) Nature and description of the property distrained; 2) Date of the distraint; 3) Name of the owner and/or actual possessor thereof; and 4) Kind of tax and amount for which the distraint was effected. A copy of such notice shall be mailed to or served upon the delinquent taxpayer or, if he be absent from the Philippines, to his agent or the manager of the business in respect to which the liability arose; or, if there be none, to the occupant or possessor of the property in question. After service of the warrant the internal revenue officer who served the warrant of distraint shall forthwith make or cause to be made an account (BIR form 28.02) of the goods, chattels, effects or other personal properties distrained, a copy of which, signed by himself, shall be left either with the owner or the person from whose possession such goods, chattels, or effects or other personal properties were taken, or at the dwelling or place of business of such person and with someone of suitable age and discretion, to which list shall be added a statement of the exact amount demanded and note of the time and place of sale. The properties chosen to be distrained must be in sufficient quantity to satisfy the tax, or charge, together with any increment thereto incident to delinquency and the expenses of the distraint and the cost of the subsequent sale. The personal properties distrained must be fully and distinctly described and identified and the time of sale thereof shall be indicated in the said account (BIR Form No. 28.02). aisadc A report on any distraint shall, within ten days from receipt of the warrant, be submitted by the distraining officer to the Revenue District Officer, to the Revenue Regional Director, and to the Commissioner of Internal Revenue, as the case may be. The distraining officer shall, after serving the notice of seizure (BIR Form No. 28.02), forthwith post a notification (BIR Form No. 28.03) to be exhibited in not less than two public places in the municipality or city where the distraint is made enumerating therein the property distrained and specifying the place of sale and the time of sale which shall not be less than twenty (20) days after service of the notice of seizure (BIR Form No. 28.02) upon the taxpayer or upon the possessor of the property distrained and the publication or posting of such notice. One place for the posting of such notice shall be in the Office of the Mayor and another in the Office of the Revenue Collection Agent of the city or municipality in which the property is distrained. (b) Immediately after service of a warrant of levy, the internal revenue officer who served the warrant shall forthwith prepare a notice of seizure (BIR Form No. 28.02) indicating thereon the name and address of the taxpayer, the exact amount of taxes and increments, if any, demanded of him and writing upon said notice the description of the real property upon which levy is made. If the property is covered by a Torrens Title, the number thereof should be indicated, or if not titled, the number of the Tax Declaration of said property should be indicated in said notice of seizure. At the same time, written notice of the levy shall be mailed to or served upon the Register of Deeds of the province or city where the property is located and upon the delinquent taxpayer, or if he be absent from the Philippines, to his agent or the manager of the business in respect to which the liability arose, or, if there be none, to the person in possession or occupant of the property in question. The notice of levy to the Register of Deeds shall state the name and address of the taxpayer; the kind and amount of tax and penalties (surcharges and interests) due from the taxpayer; and number of the certificate of title of the real property levied upon. If the property is not titled, the number of the Tax Declaration of said property; and the description of the property as appearing in the certificate of title, or if not titled, as appearing in the Tax Declaration of the property. A report on any levy shall, within ten days after receipt of the warrant, be submitted by the levying officer to the Revenue District Officer, the Revenue Regional Director and the Commissioner of Internal Revenue, as the case may be. The internal revenue officer executing the warrant of levy shall, within twenty (20) days after levy, proceed to advertise the property levied upon or a usable portion thereof as may be necessary to satisfy the claim and cost of sale; and such advertisement shall cover a period of at least thirty (30) days. It shall be effectuated by posting a notice (BIR Form No. 28.03) at the main entrance of the municipal building or city hall, the entrance of the office of the Revenue Collection Agent and in a public or conspicuous place in the barrio or district in which the real estate lies and by publication once a week for three weeks in any newspaper of general circulation in the municipality or city whether or not published in the locality where the property is located. The advertisement shall contain a statement of the amount of taxes and penalties so due and the time and place of sale, the name of the taxpayer against whom taxes are levied, and a short description of the property to be sold. At any time before the day fixed for the sale, the taxpayer may discontinue all proceedings by paying the taxes, penalties (surcharges), and interest. If he does not do so, the sale shall proceed and shall be held either at the main entrance of the municipal building or city hall, or on the premises to be sold, as the officer conducting the proceedings shall determine and as the notice of sale shall specify. SECTION 6. Conduct of sale . (a) Personal property Sale shall be made by public auction to the highest bidder in cash or, with the approval of the Commissioner of Internal Revenue, thru a duly licensed produce or stock exchanges in the case of stocks and other securities. Bids shall be submitted in sealed envelopes. On the date of sale, all the bids in sealed envelopes shall be opened in the presence of all bidders. The property shall be awarded to the highest bidder. When the purchaser of any personal property capable of manual delivery pays the purchase money, the officer making the sale must deliver to the purchaser the property and if desired, execute in four copies a certificate of sale and deliver to the purchaser the original copy thereof. The duplicate copy thereof shall be given to the Revenue District Officer or the Revenue Regional Director or the Commissioner of Internal Revenue, as the case may be, to be indexed and filed permanently with the docket of the case; the triplicate copy to the taxpayer concerned; and the quadruplicate copy to the executing officer for transmission to the Revenue Collection Agent concerned for his permanent record and file. Such sale conveys to the purchaser all rights which the delinquent taxpayer had in such property on the day the execution or attachment was made. In case there is no bidder for personal property exposed for sale, or if the bid of the highest bidder is for an insufficient amount to pay the taxes, penalties (surcharges and interests) and costs, the auction officer may purchase the same in behalf of the Republic of the Philippines for an amount equal to but not exceeding the current market value of the property auctioned or the amount of taxes, penalties (surcharges and interests) and costs. A report stating the facts of the case and the proceedings shall be sent immediately to the Revenue District Officer, the Revenue Regional Director, or the Commissioner of Internal Revenue, as the case may be. The Revenue District Officer, or the Revenue Regional Director or the Commissioner of Internal Revenue may order the sale of such property for any reasonable amount that can be realized through a private sale. The net proceeds of the sale shall be remitted to the National Treasury and accounted for as internal revenue. (b) Perishable property In exceptional cases where the property placed under distraint is perishable in nature, the sale thereof for cash shall be effected immediately to the highest bidder at public auction or at private sale and a report thereof immediately submitted to the Revenue District Officer, or the Revenue Regional Director or the Commissioner of Internal Revenue, as the case may be. Personal property sold in satisfaction of tax indebtedness to the Republic of the Philippines is absolute and shall not be subject to the redemption by the owner or anybody else. (c) Real property . Only so much of the real property levied upon or a usable portion thereof as may be necessary to satisfy the amount of taxes due plus increments thereto incident to delinquency, if any, and cost of sale shall be advertised for sale. The advertisement shall cover a period of at least thirty (30) days. Sealed bids must be opened in the presence of all bidders or their authorized representative. Upon the sale of real property, the purchaser shall be substituted to or shall acquired all the rights, title, interest, and claim of the delinquent taxpayer thereto, subject to the right of redemption by the delinquent taxpayer or anyone for him within one year from the date of sale and to such other rights of said taxpayer as provided under Section 326 of the National Internal Revenue Code. The auction officer in consultation with the Provincial, City or Municipal Treasurer, as the case may be, shall give to the purchaser a certificate of sale containing: 1) The Proceedings of the sale; 2) A particular description of the real property as entered in the certificate of title, if registered in the Register of Deeds or the description entered in the Tax Declaration found in the records of the City or Provincial Assessor; 3) The name of the purchaser; 4) The price for each distinct lot or parcel or piece of real property; 5) The exact amount of all taxes, penalties (surcharges), interest, cost of sale and other proper charges; and 6) The date on which the right of redemption expires. The duplicate of such certificate must be filed with the Office of the Register of Deeds and/or with the office of the City or Provincial Assessor. SECTION 7. Release of Property upon Payment Prior to Sale . If at any time prior to the consummation of the sale, the taxpayer pays all proper charges to the auction officer conducting the sale, the goods, chattels, effects and other personal property distrained or real property levied upon shall be restored to the owner. SECTION 8. Costs of Collection may be Advanced . The Revenue Collection Agent, upon approval by the Revenue District Officer, may, out of his collections, advance an amount sufficient to defray the costs of collection by means of the summary remedies, including the preservation or transportation in case of personal property, and the advertisement and subsequent sale, both in cases of personal and real property including improvements found on the latter. In his monthly collection report, such advances shall be reflected and supported by receipts. Only the following costs of collection shall be the subject of said advances: a) Hauling charges of personal property distrained; b) Cost of necessary storage and security of such personal property; c) Expenses for advertisement of sale of real property levied upon; and d) Cost of sale. SECTION 9. Accounting of the proceeds of sale . Amount equal to the tax liability including increments thereto incident to delinquency, if any, and other proper charges incidental to the distraint or levy shall be deducted from the proceeds of the sale. No charge shall be imposed for the services of the distraining and/or levying officer. An Official Receipt (BIR Form 25.24) shall be issued to the taxpayer for the amount so deducted. The remainder of the proceeds, if any, shall be given to the taxpayer. SECTION 10. Report of Sale . Immediately or within five days after the sale has been effected, a return of the sales proceedings shall be made and submitted by the auction officer and the same entered upon the records of the Revenue Collection Agent, the Revenue District Officer, the Revenue Regional Director and the Commissioner of Internal Revenue. The return shall contain the time and place of sale, name and address of bidders, their respective amounts of bids or offers, a narration of how the sale was conducted, description of the property sold, and the exact amount of all taxes, penalties (surcharges) and interests due from the taxpayer. Attached to the return will be documents and papers used in the sale and bidding such as the copy of the notice of sale, copies of the bids or offers, newspaper publications, and all other pertinent records. SECTION 11. Redemption of Real Property Sold . Within one year from the date of sale, the delinquent taxpayer or anyone for him, shall have the right to repurchase the property by paying to the Bureau of Internal Revenue the amount of taxes, penalties (surcharges), interest from the date of delinquency to the date of sale and cost of sale, together with interest on said purchase price at the rate of fifteen per centum per annum from the date of purchase to the date of redemption, and such payment shall entitle the redemptioner to the delivery of the certificate of sale issued to the purchaser and a certificate of redemption from the Revenue Collection Agent who shall forthwith pay to the purchaser the amount by which such property has thus been redeemed and said property thereafter shall be free from the lien of such taxes and penalties. LLjur During this one year period of redemption, the owner shall not be deprived of the possession of the said property and shall be entitled to the rents, and other income thereof until the expiration of the time allowed for its redemption. SECTION 12. Final Deed to the Purchaser . In case the taxpayer fails to redeem the real property as provided in the preceding section, the Revenue Collection Agent, as grantor, shall execute a deed conveying to the purchaser so much of the property as has been sold free from all liens of any kind whatsoever, and the deed shall succinctly recite all the proceedings upon which the validity of the sale depends. SECTION 13. Forfeiture to the Government for want of Bidder . In case there is no bidder for real property exposed for sale as hereinabove provided, or if the highest bidder is for an amount insufficient to pay the taxes, penalties (surcharges and interests), and costs, the officer conducting the sale shall declare the property forfeited to the government in satisfaction of the claim in question and within two days thereafter shall make a return of his proceedings and the forfeiture, which return shall be spread upon the records of the Revenue Collection Agent, copies furnished the Revenue District Officer, the Revenue Regional Director, the Commissioner of Internal Revenue and the Register of Deeds. Within one year from the date of such forfeiture, the taxpayer or anyone for him, may redeem said property by paying to the Revenue Collection Agent of the city or municipality where the property is located the full amount of taxes, penalties (surcharges and interests) and the cost of sale; but if the property is not thus redeemed, the forfeiture shall become absolute. For this purpose, a deed of absolute forfeiture shall be prepared by the Revenue Collection Agent and the same shall be registered in the Office of the Register of Deeds of the province or city where the real property is located, copies furnished the Revenue District Officer, the Revenue Regional Director, the Commissioner of Internal Revenue, and the City or Provincial Assessor. SECTION 14. Custody and Disposal of Forfeited Properties . The Revenue Regional Director under whose jurisdiction the real property absolute forfeited is located shall have charge thereof and shall administer the same, gather its civil fruits and remit the proceeds thereof the National Treasury, and account the same to the Commissioner of Internal Revenue in a monthly report which should be submitted by him not later than the fifth day following the close of the month. Upon giving not less than twenty (20) days' notice, the Revenue Regional Director may sell and dispose any real estate absolutely forfeited under his custody at public auction, or, with the prior approval of the Secretary of Finance, may dispose of the same at private sale. The proceeds of the sale shall be deposited with the National Treasury and an accounting of the same shall be rendered to the Commissioner of Internal Revenue and the Auditor General. SECTION 15. Further Distraint or Levy . The remedy by distraint of personal property and levy on real property can be repeated until the full amount of the tax due, including all proper expenses, is collected from the taxpayer provided that the same be made within five years from assessment of the tax. SECTION 16. Collection of Taxes Assessed Before Three Months Prior to June 15, 1968 . The collection of taxes under assessment notices and/or letters of demand received by delinquent taxpayers before three (3) months prior to June 15, 1968 must immediately be effected by distraint and levy. Where the demands were received by said taxpayers less than three (3) months prior to June 15, 1968, the remedy of distraint and levy should be resorted to only after three (3) months from receipt by them of the demand. SECTION 17. Records and Control . Warrants of distraint and levy or garnishment shall be numbered consecutively by calendar year. However, each kind of tax shall have its own number series. The first figure or symbol of the warrant number shall identify the unit issuing it; the warrants issued in revenue district offices shall carry the letters RDO; those issued in regional offices shall carry the regional office number; and letter "N" shall identify warrants issued in the National Office. The second figure separated by a dash from the first shall be the number identifying the order or sequence of issuance of warrants plus the code letter for the kind of tax liability for which the warrant is issued. For this purpose, income tax shall be identified by code letter "A", business tax, "B" transfer tax, "C", and other taxes, "D". Other taxes shall include those in Title IV, VI, VII and VIII of the National Internal Code. The last figure of the warrant number, separated by a dash from the rest, shall be the year of issuance. To illustrate: the 15th warrant issued by Revenue District Office No. 10 for a business tax liability for the year 1965 shall be RDO-15B-65; the 15th warrant issued by Regional Office No. 10 for a business tax liability for the year 1965 shall be 10-15B-65; the 15th warrant issued by the same office for an income tax liability shall be 10-15A-65; and the 15th warrant issued by the National Office in 1965 for a transfer tax liability shall be numbered N-15C-65, and so on. No distinction shall be made in numbering the warrants of distraint, levy, or garnishment. Before a warrant is released, it must first be recorded in a Warrant Register showing the following data: 1) Warrant number; 2) Name and address of taxpayer; 3) Assessment number (including the year issued); 4) Amount involved; 5) Date of the warrant; 6) Date the warrant was served and by whom; 7) Kind and value of property seized, levied and/or distrained; 8) Location of property; and 9) Remarks. SECTION 18. (a) Report on properties distrained or levied . Revenue District Officers and Revenue Regional Directors shall submit to the Commissioner of Internal Revenue, not later than the 10th day following the close of the month, a monthly report on all properties distrained or levied by them within their respective jurisdictions. (b) Report on properties forfeited to the government . Revenue District Officers and Revenue Regional Directors shall submit to the Commissioner of Internal Revenue, not later than the 10th day following the close of the month, a monthly report on all properties within their jurisdiction which were forfeited to the government indicating, among others, the following data and information: 1) Name of taxpayer; 2) Address; 3) Amount of tax; 4) Kind of tax; 5) Description of properties, including title number, tax declaration number, and its location; 6) Assessed value; 7) Date forfeited; and 8) Income. If no property is forfeited during the month such fact shall be reported. (c) Report on personal properties sold at public auction . Revenue District Officers and Revenue Regional Directors shall submit to the Commissioner of Internal Revenue, not later than the 10th day following the close of the month, a report on personal properties sold at public auction in satisfaction of internal revenue taxes. (d) Report on properties redeemed . Revenue District Officers and Revenue Regional Directors shall submit to the Commissioner of Internal Revenue, not later than the 10th day following the close of the month, a report on all properties within their respective jurisdictions which were redeemed by the delinquent taxpayer or anyone for him. (e) Report to the Auditor General . The Chief, Tax Accounts Division shall prepare for the Commissioner of Internal Revenue a report to the Auditor General containing a summary of the data or information received under sub-paragraphs (a), (b), (c), and (d) of this Section. SECTION 19. Responsibilities . (a) The Revenue Operations Head (Collection) shall review warrants for the signature of the Commissioner of Internal Revenue and the Deputy Commissioner of Internal Revenue for Operations. He shall sign for the Commissioner of Internal Revenue all warrants of distraint, levy or garnishment for any case involving an assessment of more than P20,000 but not more than P50,000.00. He may devise further controls as he deems fit in connection with the issuance of warrants of distraint and levy or garnishment. In the furtherance of the standards set in these regulations, he shall see to it that the provisions of these regulations are strictly complied with. (b) The Chief, Tax Accounts Division shall be responsible for the preparation of warrants of distraint, levy or garnishment for the signature of the Revenue Operations Head (Collection), the Deputy Commissioner of Internal Revenue for Operations and the Commissioner of Internal Revenue. He shall constantly follow up the outcome of said warrants issued and keep an up-to-date Register of Warrants issued in the National Office. He shall lend technical assistance and guidance, when necessary, to collection personnel in the field of matters involving the issuance, service and execution of warrants of distraint, levy, or garnishment, and the sale or forfeiture of properties distrained, garnished or levied upon. (c) The Revenue Regional Director shall sign all warrants of distraint, levy, or garnishment for any case involving an assessment of more than P5,000 but not more than P20,000.00. He shall be responsible for seeing to it that strict compliance of the provisions of these regulations are followed within his jurisdiction. He shall see to it that properties under distraint or levy are well taken care of, duly accounted for, and that the amount of tax due, surcharges, interests and costs incident to distraint or levy and sale are correctly deducted from the proceeds of the sale. He shall also take charge and administer all absolutely forfeited real properties in his jurisdiction. (d) The Chief, Collection Branch shall be responsible for the preparation of all warrants of distraint, levy or garnishment for the signature of the Revenue Regional Director. He shall supervise the execution of such warrants. He shall keep an up-to-date Register of Warrants issued in the Regional Office and prepare the various reports needed. The sale of properties seized or distrained for the collection of taxes in his jurisdiction should likewise be supervised by him or his authorized representative. He shall control and account for all cases under warrants of distraint, levy or garnishment within his jurisdiction. He shall bring to the attention of the Revenue Regional Director the reasons or causes hindering the carrying out of the responsibility of field personnel herein mentioned. (e) The Chief, Legal Branch shall lend technical assistance to the officials in the district on matters requiring legal competence like the preparation of documents needed for the notice, publication, sale, transfer, forfeiture, etc., in connection with the procedure herein outlined. (f) The Revenue District Officer shall sign all warrants of distraint, levy or garnishment issued by his office for any case involving an assessment of not more than P5,000. He shall be responsible for the execution thereof and also the execution of the warrants referred to him. He shall see to it that warrants are executed on time and that a report of all the proceedings regarding the execution of the warrants and the subsequent sale of the properties distrained and/or levied upon shall have been submitted to the proper authorities. He shall keep an-up-to-date record of all warrants charged and executed in his jurisdiction and the outcome of the same. (g) The Revenue District Collection Coordinator assigned to each revenue district shall be responsible for the preparation of warrants of distraint, levy or garnishment for the signature of the Revenue District Officer. He shall assist the Revenue Collection Agents in the execution of warrants of distraint, levy or garnishment to taxpayers residing outside the station town of the Regional Office. He shall prepare all papers required before forwarding the warrant to the Collection Agent concerned for execution or he may execute the warrant himself if directed by his superior officer. He shall see to it that the notices of sale, the publication of notices of sale in newspapers, and the preparation of required reports and other documents related to the case are made. At all times he shall be present during the sale of properties distrained and/or levied upon, and assist in the conduct of such sale. He shall keep a permanent file or record of cases covered by warrants of distraint and levy for his revenue district. (h) The Revenue Seizure Agent shall execute the warrant in case the properties are located in the station town of the Regional Office. He shall take charge in the actual proceedings of the sale of the properties distrained and/or levied upon and in the preparation of the report of the proceedings of same and other papers relative thereto. (i) The Revenue Collection Agent shall execute, if so directed, warrants of distraint, levy or garnishment. He shall be the custodian of the properties distrained or levied upon. He shall sign the documents required of him by law, like the deed of conveyance, certificate of sale, etc., and shall prepare and submit all reports required of him in these revenue regulations. He shall also advance the cost of collection by summary remedies as provided in Section 9 of these regulations. SECTION 20. Penalty for failure to issue and execute warrant . Any official who fails to issue or execute the warrant of distraint, levy or garnishment within thirty (30) days after the expiration of the period prescribed (not earlier than three months nor later than six months from receipt of demand) in Section three hundred eighteen and three hundred twenty-four of the Tax Code, as amended by Republic Act No. 5203, or who is found guilty of abusing the exercise thereof by competent authority shall be automatically dismissed from the service after due notice and hearing. SECTION 21. Repealing provision . These regulations repeal all orders, memoranda or circulars inconsistent herewith. casia SECTION 22. Date of effectivity . These regulations shall take effect upon their promulgation in the Official Gazette. CESAR VIRATA Acting Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue BIR FORM 2803 REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE City/Municipality of _________________ Province of _______________________ NOTICE OF SALE TO WHOM IT MAY CONCERN: Pursuant to the provisions of sections 320 and/or 325 of the National Internal Revenue Code, as amended, the undersigned will set at public auction for cash to the highest bidder, at ____________________ No. _________ Street _______________________, City/Municipality of ___________________ Province of _____________________, Philippines, on the ___________ day of ________________ 19___, beginning at _________ o'clock ________ m. of said day, the following personal properties seized and distrained or real properties levied upon from ______________________ of _______________________, Philippines, in satisfaction of internal revenue taxes and penalties amounting to P___________ Philippine Currency, due the Republic of the Philippines from said ___________________ per Assessment Notice No. _________________ or Demand No. _________________ of the Bureau of Internal Revenue of the Philippines: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ City/Municipality of ___________________, Province of _______________________, Philippines, this _______ day of _______________, 19___. _________________________ (Signature) _________________________ (Designation of BIR Officer) BIR FORM 2801 ASSESSMENT NOTICE OR DEMAND NO. ________ REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE RECEIPT FOR GOODS, ARTICLES, AND THINGS SEIZED UNDER AUTHORITY OF THE NATIONAL INTERNAL REVENUE CODE _________________, Philippines, ______________, 19___ I/We, the undersigned, hereby acknowledge to have received from ____________________________, an Internal Revenue Officer, Bureau of Internal Revenue of the Philippines, the following-described goods, articles, and things: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ the same having been this day seized and left in my/our possession pending investigation by the Commissioner of Internal Revenue or his duly authorized representative. I/We further promise that I/we will faithfully keep, preserve, and, to the best of my/our ability, protect said goods, articles, and things seized from defacement, demarcation, leakage, loss, or destruction in any manner; that I/We will neither alter nor remove, nor permit others to alter or remove or dispose of the same in any manner without the express authority of the Commissioner of Internal Revenue; and that I/We will produce and deliver all of said goods, articles, and things upon the order or any court of the Philippines, or upon demand of the Commissioner of Internal Revenue or any authorized officer or agent of the Bureau of Internal Revenue. cdt _________________________ (Signature of Taxpayer) _________________________ (Address of taxpayer) WITNESS: ___________________________ ___________________________ ___________________________ Internal Revenue Officer NOTE To be accomplished in triplicate. BIR FORM 2802 REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE ________________________________________ (Revenue Regional Office/Revenue District Office) ___________________________________ (Municipality, City/Province) NOTICE OF SEIZURE OF PERSONAL PROPERTY To: _______________________ Address: ___________________ You are hereby notified that the undersigned, acting in pursuance of section 316 and in accordance with sections 318-323 of the National Internal Revenue Code, as amended, has on this date distrained, to satisfy the sum of P_______ as internal revenue tax, surcharge and interest due the Republic of the Philippines from you, per assessment or demand No. ________________ dated _______________ the following goods, chattels and effects belonging to you and found at No. ____________, Street __________ in the Municipality of ____________ City/Province of ____________________. DESCRIPTION OF PERSONAL PROPERTY (If more space is needed, use reverse side) ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ These properties will be sold by the undersigned, for cash, to the highest bidder at ___________________, No. ____________, Street _________________________ Municipality of __________________, City/Province of ______________ on the _____ day of ______________, 19___, beginning at _______ o'clock ___ m. of the said day, unless prior to said date and hour, you, or someone acting for you, shall pay to the Revenue Collection Agent of the Municipality of _________________________, City/Province of ____________________ the sum of P___________, Philippine currency, due to Republic of the Philippines as aforesaid plus actual expenses incurred in the seizure and preservation of the properties seized. ___________________, City/Province of __________, Philippines, ________ 19___ COPY RECEIVED: Date: _____________, 19___ _________________________________ (Signatures of Taxpayer or his agent or manager or person in possession of his property) _____________________________ (Signature) _____________________________ (Designation of BIR Officer) I HEREBY CERTIFY that I have on this date served a copy of this notice to _______________________________, on this ______ day of _____________, 19___ (Name of Taxpayer or his agent or manager in possession of his property) at ________________________. _____________________________ (Signature) _____________________________ (Designation of BIR Officer) BIR FORM 1301 REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE WARRANT OF DISTRAINT OF PERSONAL PROPERTY To: ____________________ ____________________ ____________________ WHEREAS, Now, THEREFORE, pursuant to section 316 and in accordance with sections 318-323 of the National Internal Revenue Code, as amended, you are hereby commanded to distrain the goods, chattels or effects, and other personal property of whatever character of the delinquent taxpayer, and sell so much of such personal property as may be necessary to satisfy in full the sum or sums due as set forth above, and to cover such expenses as may be incurred in making this distraint. You will safely keep all property so distrained and do all things needful and necessary to be done in the premises as required by law before the sale thereof. And for so doing this shall be your warrant of which make due service and make return of your proceedings to me at this Office. Witness may hand and official seal at the City or Municipality of _____________, Philippines, this _____ day of ____________, 19___. _______________________________ Commissioner of Internal Revenue Regional Director, R.R. No._______ Revenue District Officer, R.D. No. _______ Copy of this Warrant of Distraint received this _____ day of ________________, 19_____ _____________________________ (Signature of Taxpayer) _____________________________ __________________________ (Signature of Witness) (Signature of Witness) I HEREBY CERTIFY that on _________________ 19___, at ____ a.m. or p.m., I served a copy of this Warrant of Distraint upon the delinquent taxpayer. Dated at ____________________, this _____ day of ______________, 19___. _______________________________________ (Revenue Collection Agent/Revenue Seizure Agent) ______________________________________ (City/Municipality and Province) RETURN OF WARRANT 1. Nature of property distrained _____________________ (See attached list) 2. Estimated, assessed, or inventorial value, P_________________________ 3. Date of Distraint ______________ 4. Date of Sale __________________ 5. Name of purchaser ___________________________________________ 6. Amount sold for P___________ 7. Cost of distraint and sale P ________ 8. Net proceeds P______________________ I HEREBY FURTHER CERTIFY that by virtue of the foregoing warrant, I proceeded to enforce the collection of the sum or sums due as above set forth by distraining the property herein described; and all the provisions of law relative to service of warrant, advertisement, sale, etc., were strictly complied with; and that the property was sold at public auction after due notice, to the highest bidder at the price herein stated. The gross proceeds amounting to P____________________________ were accounted for as follows: _____________________________________________________________ ____________________________________________________________________ ____________________________________ (Revenue Collection Agent/Rev. Seizure Agent) ______________________ ____________________________________ (Date) (City/Municipality and Province) (SEE INSTRUCTION ON REVERSE SIDE) INSTRUCTIONS (To Distraining Officer) The internal revenue officer designated to serve the warrant of distraint shall serve the same personally upon the taxpayer himself. In a case, however, where the taxpayer refuses to receive the warrant or is absent from his given address, the warrant shall be served upon someone of suitable age and discretion in the premises or upon the person in possession of the property of the delinquent taxpayer who should acknowledge and sign all copies of the warrant. In case actual service of the warrant upon the delinquent taxpayer or upon either of the two other persons mentioned above cannot be made, a copy thereof shall be left in the premises or in the taxpayer's place of business or in the place of the person in possession of the property and the warrant is deemed property served. This fact shall be attested to in all copies of the warrant by the distraining officer and at least two credible witnesses. After service of the warrant a copy thereof showing acknowledgment receipt by the taxpayer or by either of the two persons mentioned above, as the case may be, or a certification by the distraining officer and two credible witnesses that a copy of the warrant was left in the premises or place of business of the taxpayer or in the place of the person in possession of the personal property of the taxpayer, shall be returned to the officer who issued the warrant. After the warrant has been fully executed or the proceedings terminated, that part of the warrant entitled "Return of Warrant" shall be accomplished after which the original thereof and other papers connected therewith shall be submitted to the officer who issued the same. BIR FORM 2802A REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE _________________________________________ (Revenue Regional Office/Revenue District Office) _______________________________________ (Municipality, City/Province NOTICE OF SEIZURE OF REAL PROPERTY To: _______________________ Address: ___________________ You are hereby notified that the undersigned, acting in pursuance of section 316 and in accordance with sections 324-329 of the National Internal Revenue Code, as amended, has on this date levied upon, to satisfy the sum of P____________ as internal revenue tax, surcharge and interest due the Republic of the Philippines from you, per assessment or demand No. __________ dated ____________ the following real properties belonging to you and found at No. ___________________ Street __________________, in the Municipality of __________________ City/Province of _____________________________________________________________ DESCRIPTION OF REAL PROPERTY (If more space is needed, use reverse side) ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ These properties will be sold by the undersigned, for cash, to the highest bidder at _________________ No. __________, Street ____________________________, Municipality of _________________, City/Province of __________ on the ______ day of _____________ 19___, beginning at _____________ o'clock ____m. of the said day, unless prior to said date and hour, you, or someone acting for you, shall pay to the Revenue Collection Agent of the Municipality of ________________ City/Province of ________________, the sum of P__________________, Philippine Currency, due the Republic of the Philippines as aforesaid, plus costs. _________________ City/Province of __________________, Philippines, ________ 19___. COPY RECEIVED: Date: _____________, 19___ ____________________________________ (Signature of Taxpayer or his agent or manager or occupant of his property __________________________ (Signature) __________________________ (Designation of BIR Officer) I HEREBY CERTIFY that I have on this date served a copy of this notice to ____________________________________________, on this _____ day of ______ (Name of Taxpayer or his agent or manager or occupant of his property 19____ at __________________________, ___________________________ (Signature) ___________________________ (Designation of BIR Officer) May 27, 1969 The Honorable The Secretary of Finance Finance Building M a n i l a S i r : I have the honor to forward herewith Revenue Regulations No. 3-69, the subject matter of which is "Summary Remedies for Collection of Taxes" for your approval. aisadc Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue Subject: Revenue Regulation No. 3-69, Regulation on Summary Remedies 1st Indorsement March 23, 1970 Respectfully returned to the Commissioner on Internal Revenue, Manila, Revenue Regulation No. 3-69, dated April 21, 1969, approved, with the exception of Section 6 thereof, which this Office has deleted for a reason that said provision might be resorted to by a delinquent taxpayer for the purpose of delaying the collection of his tax liability, thus defeating the purpose of the distraint or levy. Numbering of the provisions subsequent to the deleted Section should be adjusted accordingly. CESAR VIRATA Acting Secretary 1st Indorsement June 17, 1969 Respectfully returned to the Commissioner of Internal Revenue, Manila, Revenue Regulation No. 3-69 dated April 21, 1969, the regulation on Summary Remedies for the Collection of Taxes, requesting information as to the legal basis of, and the justification for, the provision on "suspension of sale" provided for in Section 6 of the Regulation, as this Office feels the provision might be resorted to by a delinquent taxpayer to delay the sale of the property distrained or levied upon and ultimately delay the payment of his tax liability. EDUARDO Z. ROMUALDEZ Secretary 2nd Indorsement July 18, 1969 Respectfully returned to the Honorable, the Secretary of Finance, Manila, with the information that the suspension of sale of property distrained or levied upon after the taxpayer filed a surety bond or "Ordinary bond for Payment of Taxes" (BIR Form No. 23.18), as provided for in Section 6 of the enclosed proposed Revenue Regulations No. 3-69, is an established policy of this Bureau and may have no legal basis. It is a requirement of this Office that the said bond guaranteeing the payment of a tax liability of a taxpayer shall be executed in accordance with the attached General Circular No. V-269 dated January 23, 1958 and shall contain, among other things, terms of payment of such liability which may be in six or twelve equal monthly installments or in one lumpsum within one year. If the taxpayer shall be in default in the payment of said tax liability or any installment thereof, the entire balance becomes due and this Office demands its payment from the taxpayer (principal) or surety, or takes the necessary action for the forfeiture of the bond. The interest of the Government is amply protected and the collection of delinquent taxes is also faster in such procedure besides the fact that the taxpayer is afforded the opportunity of easily settling his tax liability. In view of the foregoing, the approval of the proposed Revenue Regulations No. 3-69 is hereby reiterated. MISAEL P. VERA Commissioner of Internal Revenue