BIR REVENUE MEMORANDUM CIRCULAR NO. 17-90, February 01, 1990

[ BIR REVENUE MEMORANDUM CIRCULAR NO. 17-90, February 01, 1990 ]

SCHEDULE OF COMPROMISE PENALTIES IN COLLECTION OF TAXES ABROAD

For Internal revenue tax purposes, the pertinent portions of Revenue Memorandum Order No. 1-90, relevant to the collection of taxes abroad are quoted below: "I Objectives

This Order is issued:

A. To update the Schedule of Compromise Penalties with a view to increase the compromise penalties and delete from the coverage thereof certain acts commonly resorted to by taxpayers as a means of tax evasion;

B. To reflect the changes in the Schedule which includes the Code Section, Nature of Violation, Criminal Penalty imposed and Amount of Compromise Penalty which are prescribed on Chapter II, Title X of the revised National Internal Revenue Code ;

C. To adopt and implement a uniform application of the various compromise penalties for criminal violations of the Tax Code ; and

D. To provide supplemental guidelines on compromise penalties for resident taxfilers and non-residents as well."

"II Policies

Certain acts/violations which are commonly resorted to and applicable to non-resident taxpayers are imposed the same amount of compromise penalty as the resident taxpayers."

"III Guidelines and Instructions

1. The internal revenue officers concerned shall apply the “Revised Schedule of Compromise Penalties”[given below] to ensure uniformity of action.

2. In no case shall the compromise penalty differ in amount from those specified in the Schedule, except when duly approved by the Commissioner or, in a proper case, by the Regional Directors.

3. Although all amounts of compromise penalties incident to violations shall be itemized in the assessment notice and/or demand letter along with the other administrative penalties like surcharge and interest, the same should not form part of the total amount assessed/demanded but should appear separately as a suggestion to the taxpayer to pay lieu of criminal prosecution. If paid, the compromise penalties shall be collected and accounted for under the usual procedures, as internal revenue.

4. Since compromise penalties are only amounts suggested in settlement of criminal liability, and may not therefore be imposed or exacted on the taxpayer in the event that a taxpayer refuses to pay the suggested compromise penalty, the violation shall be referred for criminal action as heretofore mentioned.

5. Non-resident filers who commit any of the violations stated in the schedule shall pay the equivalent amount of compromise penalty in pesos or its equivalent in U.S. dollars."

(Note: In the implementation of No. 5, above, reference should be made to Revenue Memorandum Circular No. 77-89, dated December 19, 1989, prescribing a uniform exchange rate of U.S. Dollar for the collection of taxes abroad. The said Circular has earlier been circularized.)

"IV Repealing Clause

All other orders which are inconsistent herewith are hereby repealed or revoked accordingly."

"V Effectivity

This Order shall take effect immediately."

All revenue officers and other officials charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and urged to give the same the widest publicity possible.

Adopted: 1 Feb. 1990

(Sgd.) JOSE U. ONG Commissioner of Internal Revenue

REVISED SCHEDULE OF COMPROMISE PENALTIES

Code Sec.

Nature of Violation

Amount of Compromise Penalty

253

Willful attempt to evade or defeat any tax imposed by the National Internal Revenue Code or the payment thereof.

This violation cannot be compromised because it involves fraud Sec. 204 NIRC.*

Code Sec.

Nature of Violation

Amount of Compromise Penalty

254 a) Willful failure to pay any internal revenue tax at the time required by law or regulation. There is no specific amount of compromise penalty prescribed but the same may be compromised at the discretion of the Commissioner on a case-to-case bases.*

b) Failure to pay any internal revenue tax at the time required by law or regulation. b) If the amount of tax unpaid

Exceeds

But Does Not Exceed

Compro- mise is

P xxx

P 500

P 200

500

1,000

400

1,000

2,000

700

2,000

5,000

1,000

5,000

7,500

1,500

7,500

10,000

2,000

10,000

15,000

3,000

15,000

2,000

4,000

20,000

30,000

6,000

30,000

60,000

8,500

50,000

100,000

12,000

100,000

500,000

16,000

500,000

1,000,000

20,000

1,000,000

x x x

25,000

c) Willful failure to make/file any return, keep records, or supply information at the time required by law or regulations. There is no specific amount of compromise penalty prescribed, but the same may be compromised at the discretion of the Commissioner on a case to cases basis.*

d) Failure to make / file any return or supply information at the time required by laws or regulations If gross annual sales, earnings, or receipts; or gross estate or gift

Exceeds

But Does Not Exceed

Compro- mise is

P xxx

P 10,000

P 200

10,000

20,000

400

20,000

30,000

600

30,000

50,000

1,000

50,000

75,000

1,500

75,000

100,000

2,000

100,000

300,000

3,000

300,000

500,000

5,000

5,000,000

10,000,000

15,000

10,000,000

25,000,000

20,000

25,000,000

x x x

25,000

e) Misrepresentation as to actual filing of return or statement or withdrawal of return or statement already filed. This violation cannot be compromised because it involves fraud. (Sec. 204, NIRC)*

274 Violation of any provision of the National Internal Revenue Code or any regulation of the Department of Finance for which no specific penalty is provided by law. P 1,000

Code Sec.

Nature of Violation

Amount of Compromise Penalty

277 Procuring the unlawful divulgence of any confidential information regarding the business, income, or inheritance of any taxpayer; unlawfully publishing or printing the income, profits, losses, or expenditures appearing in any income tax return. This violation should not be compromised because it is against public policy to allow divulgence of confidential information, unless this is validly authorized under existing law.

* NOTE: These violations should be the subject of a formal written report on a case to case basis, addressed to:

The Commissioner Bureau of Internal Revenue Quezon City, Philippines Attention: Chief, International Tax Affairs Division