RMO No. 26-2016 — Prescribes the policies and guidelines in handling disputed assessments

REPUBLIC OF THE PHILIPPINES BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION JUN H 4 2016 1+ 8:43*-A:M:

BUREAU OF INTERNAL REVENUE DEPARMENT OF FINANCE Quezon City RECEIYE& UhAe4A

June 13,2016

REVENUE MEMORANDUM ORDER NO aig-AD1

SUBJECT Policies Assessments. and Guidelines in Handling Disputed

TD All Internal Revenue Officiais, Empioyees and Others Concerned

OBJECTIVES

In line with Section 228 of the National internal Revenue Code, as amended, and pursuant to Revenue Regulations No. 18-2013 which amends certain Sections of Revenue Regulations No. 12-99 relative to the Due Procese Reguirement in the issuance of a deficiency tax assessment, this Order is hereby issue to prescribe policies, uniform guidelines and procedures in handling disputed assessments, and in issuing Final Decision on Disputed Assessment (FDDA) and revision thereof by the Commissioner of Internal Revenue

. POLICIES AND GUIDELINES

A taxpayer must be given an opporiunity, if he/she/it so chooses. 7

to explain his/her/its objection to an assessment and present necessary docurment in support his/her/its obiection, before a FDDA is issued.

2 Protest against Preliminary Assessment Notice (PAN) is

optional/not mandatory

3. Formal Letter of Dermand and Final Assessment Notice

(FiLD)/(FAN) shall be issued fifteen (15) days from date of receipt by the taxpayer of the PAN, whether the same was protested or not.

4. If the taxpayer shall upon receipts of the PAN, accepts and pays

the assessment either partially or fully, a FLD/FAN shali be issued to formalize the assessrnent, and Payment Form 0605 shall be duly prepared, filed and paid to acknowledged and provide evidence for the settlement of the assessment or portion of the assessment paid.

5 Within thirty (30) days from receipt of the FLD/FAN, the taxpayer

shall either:

a. Accept the assessment, fully or partially, and pay the

amount due or the assessment accepted, or

b. Protest the assessment fully or partially by filing either of

the following remedy, and the filing of one precludes the filing of the other remedy:

i. Request for Reconsideration if the taxpayer is

not going to submit any other additiona evidence or documents and merely pleas for a re-evaluation of an assessment;

ii. Reguest for a Reinvestigation on the basis of

newiy discovered evidence or if the taxpayer intends to present or submit additional evidence or documents.

6 After the issuance of the FAN/FLD, the taxpayer accepts and

settle/pays the assessment in full, Payment Form 0605 shall be duly prepared, filed and paid as evidenced of the settlernent of the assessment. If the taxpayer accepts and settle/pays the assessment in part, and protest the remaining portion, Payment Form 0605 shall be prepared, filed and paid for that portion of the assessment accepted and settled, and a FDDA shall be issued for the portion of the assessment not settled and resolved. For that portion of the assessrnent resolved in favor of the taxpayer, an Authority to Cancel Assessment (ATCA) shall be prepared to evidence the cancellation of the assessment.

BUREAU OF INTERNAL REVENUF RECORDS MGT DIVISION

JUN { 4 2016 8: 43A. M.

RECEIWFM

T If a reguest for Reinvestigation was made, the taxpayer shall

submit all the relevant supporting documents in support of his/her/its protest within sixty (60) days from the date of the filing of the taxpayer's letter of protest. Evaluation of the protest shall be based exclusively on the documents submitted within this period, and no further document shall be accepted after the expiration of the said period. The assessment shall become final and executory in the event the taxpayer fails to submit the relevant supporting documents within this 60 days period, and a Collection Letter and other collection remedies such as but not limited garnishment, warrant and levy shall be issued against the taxpayer.

8 All decisions on protest to the FAN, whether the taxpayer's

protest is accepted or denied partiaily or wholly, shall be communicated to the taxpayer through the issuance of a Finai Decision on a Disputed Assessment (FDDA)

9 All protest shall be considered a request for reconsideration, unless said protest clearly indicates that the request is for

reinvestigation.

10. A request for Reinvestigation shall be available in a protest to a

FAN/FLD only. After the issuance of a FDDA, a request for Reinvestigation shall no longer be available as a taxpayer remedy.

11 If the protest is not acted upon by the Commissioner's duly

authorized represented within 180 days counted from the date of the filing of the protest in the case of a request for reconsideration, or from the lapse opf the 60 days period to submit reievant document in the case of a request for reinvestigation, and the taxpayer appeais to the Court of Tax Appeal within 30 days after the expiration of the 180 days period. an FDDA shall be issued automatically.

E E ( E A HE E INTERNAL 1 1 3 All the periods provided for under RR No.18-2013 is mandatory and non-extendible settle the assessment contained therein, partially or fully After the issuance of the FDDA, the taxpayer may accept and

(+ 2016 M DY ISON REVENU Payment Form 0605 shall be prepared, filed and paid for the assessment accepted and settled by the taxpayer. If the FDDA Were issued by the Commissioner's duly authorized

representative, the taxpayer shall within thirty (30) days from receipt of the FDDA file a motion for reconsideration with the Commissioner of Internal Revenue or appeal to the Court of Tax Appeal. In appealing the protest to the Court of Tax Appeal, the taxpayer shall manifest and state that the appeal pertains oniy to the portion of the FDDA not settled and paid and attached to their appeal a copy of the duly filed and paid Payment Form 0605.

14. Appeal to the Commissioner or to the Court of Tax Appeal of the

FDDA, shall not preclude the taxpayer from voluntarily settling the assessment, partially or fully. Payment Form 0605 shail be duly prepared, filed and paid and the taxpayer shall manifest before the Court of Tax Appeal the fact of settlement of the assessment, partially or fully, present the duly filed and paid Payment Form 0605, and file a motion for dismissal with prejudice as to the assessment or portions thereof that has been settled and paid on the ground that the appealed disputed assessment has become moot and academic

15. An assessment shall become final, executory and demandabie

due to, among others, the following grounds:

a. Failure of the taxpayer to file a valid protest within thirty

(30) days from receipt of the Formal Letter of Demand and Final Assessment Notice (FLD/FAN);

b. Failure of the taxpayer to submit all relevant documents

in support. of his protest by way of request for reinvestigation within sixty (60) days from the date of filing thereof:

c. Failure of the taxpayer to appeal to the Cornmissioner of

Internal Revenue or the Court of Tax Appeals (CTA) within thirty (30) days from date of receipt of the FDDA issued by the Commissioner's duly authorized representative: BUECORB U d. Failure of the taxpayer to appeal to the CTA within thirty ( (30) days from date of receipt of the FDDA issued by (* ( 206 b C DNSO REVENUR e. Failure of the taxpayer to timely file a motion for reconsideration or new trial before the CTA Division oi failure to appeal to the crA En Banc and Supreme the Commissioner; :

H Court based on existing Rules of Procedure; or

I. Failure of the taxpayer to receive any assessment

notices because it was served in the address indicated in the BIR's registration database and the taxpayer transferred to a new address or closed/ceased operations without updating and transferring its BiR registration or cancelling its BIR registration as the case may be, through the accomplishment and filing of BIR Form No. 1905- Application for Registration Information Update, as prescribed by pertinent issuance and/or amendments thereto

H RePEaLiNG CLAUSe

All revenue issuances and portions thereof inconsistent with this Order are hereby amended or repealed accordingly.

V EFFECTIVITY

This Order shall take effect immediately

KIM S.JACINTOHENARES Commissioner bf Jnternal Revenue 042011

BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVIGION

JUN 1 4 2016 8:43 A.G

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