Implementation of Executive Order No. 44 dated September 4, 1986 authorizing the Bureau of Internal Revenue to accept compromise payments, on delinquent accounts or disputed assessments pending as of December 31, 1985

October 8, 1986 REVENUE REGULATIONS NO. 17-86 SUBJECT : Implementation of Executive Order No. 44 Dated September 4, 1986 Authorizing the Bureau of Internal Revenue to Accept Compromise Payments, on Delinquent Accounts or Disputed Assessments Pending as of December 31, 1985 TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Purpose . These regulations prescribe the guidelines for the availment by taxpayers of the opportunity of settling their delinquent accounts or disputed assessments by way of compromise payments. SECTION 2 . Definition of terms . In applying the provisions of these regulations the following terms shall have the meaning indicated below: aisa dc a) Delinquent account Refers to the amount of tax due on or before December 31, 1985 from a taxpayer who failed to pay the same within the time prescribed for its payment arising from (1) a self assessed tax, whether or not a tax return was filed, or (2) a deficiency assessment issued by the BIR which has become final and executory. Where no return was filed, the taxpayer shall be considered delinquent as of the time the tax on such return was due, and in availing of the compromise, a tax return shall be filed as a basis for computing the amount of compromise to be paid. b) Disputed assessment refers to a tax assessment disputed or protested on or before December 31, 1985 under any of the following categories: 1) if the same is administratively protested within thirty (30) days from the date the taxpayer received the assessment, or, 2) if the decision of the BIR on the taxpayer's administrative protest is appealed by the taxpayer before an appropriate court . cd i c) Basic Tax Assessed The term refers to any of the following: 1) unpaid tax shown on the return filed: 2) where no return as required by law was filed, the tax would have been due had such return been filed; 3) where no return is required to be filed, the amount of unpaid tax due prescribed by law; 4) tax due shown on assessment notice; 5) unpaid installments as of September 4, 1986 pursuant to an agreement to pay installments; 6) total amount of compromise penalties agreed upon for violations of the NIRC. SECTION 3 . Who may avail . Any person, natural or juridical, may settle thru a compromise, any delinquent account or disputed assessment which has been due as of December 31, 1985, by paying an amount equal to thirty (30%) per cent of the basic tax assessed. SECTION 4 . Reduction of rate of compromise . The aforementioned rate of compromise may be reduced to not less than 10% of the basic tax assessed, if in the opinion of the Evaluation Committee to be created by the Commissioner for purposes of these regulations the circumstances shall so warrant. cd i SECTION 5 . Place for filing application for compromise settlement . All applications for compromise under these regulations shall be filed with, processed and accepted as follows: a) Revenue District Office for accounts involving amounts not exceeding P5,000; b) Collection Branch, Regional Office for account exceeding P5,000 but not exceeding P20,000; c) Collection Office, BIR for accounts exceeding P20,000. Notwithstanding the above provisions, the office which has possession of the docket of the case shall receive and process all applications for compromise of such cases. Where the request for compromise is for less than 30% of the basic tax assessed, the application together with the recommendation of the processing office and the docket shall be forwarded to the appropriate Evaluation Committee for proper disposition. SECTION 6 . Mode of payment . Upon acceptance of the proposed compromise, the amount offered as compromise in complete settlement of the delinquent account shall be paid immediately in cash or in manager's certified check. Deferred or staggered payments of compromise amounts over P50,000 may be considered on a case to case basis in accordance with the extant regulations of the Bureau upon approval of the Commissioner of Internal Revenue, his Deputy or Assistant as delineated in their respective jurisdictions. aisa dc If the compromise amount is not paid as required herein, the compromise agreement is automatically nullified and the delinquent account reverted to the original amount plus the statutory increments, which shall be collected thru the summary and/or judicial process provided for by law. SECTION 7 . Formation of Evaluation Committee . The Commissioner of Internal Revenue shall create an Evaluation Committee to process offers of compromise lower than 30% of the basic tax assessed. The committee shall formulate the criteria as basis for determining the validity of the offer. SECTION 8 . Effectivity . These regulations shall take effect immediately. (SGD.) JAIME V. ONGPIN Minister of Finance Recommended by: (SGD.) ROMULO M. VILLA Acting Commissioner