RMO No. 7-2020 — Prescribes the policies and guidelines in the audit/investigation of cooperatives Digest | Full Text | Annex A | Annex B

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

February 10, 2020

REVENUE MEMORANDUM ORDER NO.7- 20 20

SUBJECT :Audit/Investigation of Cooperatives

TO : All Regional Directors, Revenue District Officers, Chiefs of the Assessment Divisions of Regional Offices, Revenue Officers and

Others Concerned

Background

Republic Act (RA) No. 10963, otherwise known as the "Tax Reform for Acceleration Inclusion" (TRAIN) Law, has amended Section 6(A) of the National Internal Revenue Code under RA No. 8424, now authorizing the Commissioner or

the correct amount of tax, notwithstanding any law requiring the prior accounting records of the cooperative as provided under Section 61(3) of RA No. applicable. requirement of securing authorization from the Cooperative Development 9520 otherwise known as the "Philippine Cooperative Code of 2008" is no longer his duly authorized representative to examine any taxpayer and the assessment of authorization of any government agency or instrumentality. Thus, the Authority (CDA) before the examination of the books of accounts and other

HI.Objective

l. To ensure the correctness of availment of tax exemptions/incentives of cooperatives pursuant to Republic Act No. 9520; and

2. To effectively monitor tax compliance of cooperatives.

HII. Coverage

This Order shall cover the issuance of electronic Letters of Authority (eLAs) for the audit/investigation of cooperatives for taxable years 2018 and onwards.

IV. Audit Policies and Guidelines

1. Cooperatives which transact business with both members and non-members by Revenue District Offices having jurisdiction over the said cooperatives. whose accumulated reserves and undivided net savings is more than Ten Million Pesos (Php 10,000,000.00) shall be prioritized for audit/investigation

Further, other cooperatives with income not related to the main/principal

covered for priority audit, whether such cooperatives deal purely with members business/es under their Articles of Cooperation shall likewise be among those

or both members and non-members.

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2. The policy on the maximum workload of thirty (30) cases per Revenue Officer

(RO) shall not be applicable to the audit of cooperatives under this Order.

3. The Selection Code to be used for cases covered by this Order shall be

"COOP"

4. The Electronic Letter of Authority Monitoring System (eLAMS) shall be used in the request, approval and issuance of eLAs, as well as in reporting the accomplishments on eLAs issued.

5. To ensure the close monitoring of cooperatives audited under this Order, the following reports shall be prepared and submitted by the Revenue District Officers to the Assistant Commissioner - Assessment Service, Attention: The

Chief, Audit Information Tax Exemption & Incentives Division through email address aiteid@bir.gov.ph, not later than the 1Oth day of each month:

Name of Report Annex 5.1 List of Cooperatives with Electronic Letters of A

Authority (eLAs) Issued

5.2 Monthly Summary of Accomplishment on Audit of Cooperatives B

V. Repealing Clause

repealed, modified or amended accordingly. All other issuances and/or portions thereof inconsistent herewith are hereby.

VI. Effectivity

This Order shall take effect immediately.

CAESAR R. DULAY Commissioner of Internal Revenue

I1 033080

BUREAUOTN

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