Presidential Decree No. 1740, dated September 17, 1980 Condoning Penalties for Certain Violations of the Income Tax Law upon Voluntary Disclosure of Undeclared Income

November 12, 1980 REVENUE REGULATIONS NO. 09-80 SUBJECT : Presidential Decree No. 1740, Dated September 17, 1980 Condoning Penalties for Certain Violations of the Income Tax Law upon Voluntary Disclosure of Undeclared Income TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Purpose . These Regulations are hereby promulgated to implement the provisions of Presidential Decree No. 1740, dated September 17, 1980, condoning penalties for violation of the income tax law under certain conditions. SECTION 2 . Coverage . Who may avail of the benefits under the provisions of the Decree . The following individuals who, for any or all of the taxable years 1974-1979, had failed to file a return or who filed erroneous, false or fraudulent return, may avail themselves of the benefits under the provisions of Presidential Decree No. 1740, by filing a return or amended return where one had been filed and accurately declaring his true and correct taxable income and pay the tax due thereon, less the income taxes already paid or assessed prior to September 17, 1980: (a) resident citizens; (b) nonresidential citizens; (c) resident aliens; (d) estates or trusts. SECTION 3 . Cases not Covered by the Decree . The following cases involving violations of any of the provisions of Title II of the National Internal Revenue Code or non-compliance of any of the requirements thereof by any of the individuals mentioned in the preceding section are not covered: (a) Criminal cases already filed in Court or with the Fiscal's Office on or before September 17, 1980; (b) Income tax cases involving civil liability which are the subject of a pending criminal action in the Fiscal's Office or the Court prior to September 17, 1980; (c) Withholding tax at source liabilities provided for under Sections 53, 54 and Chapter XI of Title II of the National Internal Revenue Code; and (d) Deficiency income taxes assessed on or before September 17, 1980. For this purpose, the date of the assessment notice shall be deemed to be the date of assessment of the deficiency tax. SECTION 4 . Computation of Tax . The amount of tax to be paid pursuant of the Decree shall be determined in the following manner; (a) In the case of a taxpayer who failed to file a return, the amount of tax shown in the return filed and commuted in accordance with the rates prescribed under Section 21 of the Tax Code, or other pertinent Sections of the said Code. (b) In the case of a taxpayer who amends his return previously filed, the balance of the tax after deducting the following taxes, exclusive of penalties; i. Amount of income tax due per original return; ii. Deficiency income tax with assessment notice issued on or before September 17, 1980 whether paid or still unpaid. SECTION 5 . Filing of return . (a) Form and manner of filing the return . (1) A taxpayer who failed to file a return shall file his declaration in the regular income tax return (BIR Form No. 1701 or 1701A) in the case of a resident citizen, resident alien and estate or trust or (BIR Form No. 1701C) in the case of a non-resident citizens, for each of the years for which no return had been filed; cd (2) Where a return had previously been filed, the taxpayers mentioned in Sec. 2 hereof, shall file an amended return (BIR Form No. 1745G) stating therein their undeclared income and over-claimed deductions and/or exemptions, except that in the case of a non-resident citizen, he shall file his declaration under (BIR Form No. 1745G-1); (3) An individual who derived capital gains from sale or other disposition of real property on or after September 7, 1979, but failed to report the same, shall file his declaration in the regular capital gains tax return (BIR Form No. 1701E). Where a return had previously been filed, the taxpayer shall file an amended return (BIR Form No. 1745G-1) stating therein his understated selling price and/or over-claimed cost or deductions. (b) When and where to file the return . The return or the amended return in the prescribed form required under these Regulations shall be filed in duplicate on or before March 15, 1981 with the Revenue District Officer, Collection Agent or duly authorized Treasurer of the Municipality where the taxpayer has his legal residence or principal place of business, or in the office of the Commissioner of Internal Revenue if the taxpayer has no legal residence or place of business in the Philippines. (Amended by RR 9A-80) SECTION 6 . Time for Payment of Tax . The tax due as disclosed by the taxpayer in his return must be paid at the time of the filing of the return. If the due exceeds P50,000.00, the same shall be paid in accordance with the following schedule: (a) If the amount due exceeds P50,000.00 but does not exceed P100,000.00, the tax may be paid in two equal installments, the first installment to be paid at the time of the filing of the return but not later than March 15, 1981 and the second installment on or before May 15, 1981; (Amended by RR 9A-80) (b) If the amount due exceeds P100,000.00 the tax may be paid in three equal installments, as follows: i. The first installment shall be paid upon filing of the return but not later than March 15, 1981; ii. The second installment shall be paid on or before May 15, 1981; and iii. The third installment shall be paid on or before June 15, 1981. (c) If any of the installment is not paid on the due date thereof, the whole unpaid amount will become due and demandable and shall be subject to interest and all penalties imposed under the Tax Code. The corresponding letter of demand and assessment notice shall immediately be issued and the amount due and increments thereon shall be collected pursuant to the pertinent provisions of the National Internal Revenue Code . SECTION 7 . Immunity from Penalties . Any individual who voluntarily files a return under these Regulations and pays the income tax due thereon shall be immune from the penalties, civil or criminal, imposed under the National Internal Revenue Code, arising from failure to file the return and pay the correct income tax corresponding to the taxable years for which an original return or amended return was filed for any of the taxable years 1974 to 1979. These immunities, however, shall not apply in cases where the taxpayers has understated his net taxable income declared under these Regulations by twenty per centum or more of his correct net taxable income. SECTION 8 . Penalties for Filing False or Fraudulent Return . Any individual who is subsequently found to have willfully filed a false or fraudulent return or amended return required under these Regulations for any of the taxable years 1974 to 1979 shall be punished by a fine of not more than two thousand pesos or by imprisonment of not more than six months, or both. SECTION 9 . Disposition of Returns . All returns filed pursuant to the provisions of these Regulations shall be kept in a separate file of the Bureau of Internal Revenue, after the tax due thereon shall have been fully paid. The provisions of Section 81 of the National Internal Revenue Code, as amended, prescribing the manner and disposition of income tax returns and publication of lists shall not apply to the aforesaid returns. cd SECTION 10 . Effectivity . The provisions of these Regulations shall take effect immediately. EFREN I. PLANA Acting Ministry of Finance Recommend by: RUBEN B. ANCHETA Acting Commissioner