RMO No. 27-2024 — Providing guidelines, policies and procedures in the processing of claims for credit/refund of taxes erroneously or illegally received or collected or penalties imposed without authority pursuant to Section 204(C), in relation to Section 229 of the National Internal Revenue Code of 1997, as Amended (Tax Code), except those under the authority and jurisdiction of the Legal Group D

TEEUCCNTPRAA

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE 34 jUL 03 202 BUREAU OF INTERNAL REVENUE

Quezon City 75:.. Tus

0 1 JUL 2024 REVENUE MEMORANDUM ORDER NG27 :2024

SUBJECT Providing Guidelines. Policies and Procedures in the Processing of Claims for Credit/Refund of Taxes Erroneously or Illegally Received or Collected or Penalties Imposed Without Authority Pursuant to the Authority and Jurisdiction of the Legal Group Section 204(C), in Relation to Section 229 of the National Internal Revenue Code of 1997, as Amended (Tax Code), Except Those Under

TO All Internal Revenue Officials, Employees and Others Concerned

the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered refund taxes erroneously or illegally received or penalties imposed without authority, refund unfit for use and refund their value upon proof of destruction. In accordance with Section 204(C) of the Tax Code, the Commissioner may credit or

No. l1976, also known as the Ease of Paying Taxes (EOPT) Act, particularly on Section 204(C). in relation to Section 229 of the Tax Code, this Order is issued to provide the following: In line with the recently introduced reforms on tax refunds under Republic Act (R.A.)

l. Uniform policies and guidelines in the processing and grant of claims for the erroneously or illegally received or collected or penalties imposed without authority pursuant to Section 204(C), in relation to Section 229 of the Tax Code: issuance of tax credit certificates or cash refund (tax credit/refund) of taxes

2. Prescribe the documents to be submitted by the taxpayer-claimant:

3. Prescribe the documents to be attached to the tax credit/refund docket and the required notice to claimant: and

4. Define and detineate the duties and responsibilities of the offices involved in the processing of the said claims.

I GENERAL POLICIES

1. The claims for tax credit/refund pursuant to Section 204(C). in relation to Section

229 of the Tax Code must conform with the following essential requisites:

a. The tax credit/refund claim pertains to erroneously or illegally received or

collected taxes or penalties imposed without authority.

Page I of 11

b. Filing of a claim for tax credit/refund shall be done within two (2) years after payment of the tax or penalty.

c. The erroneously or illegally received or collected taxes must be supported with a copy of the duly filed tax returm with the corresponding payment remitted to the Bureau.

2. The processing offices authorized to receive the Application for Tax

Credits/Refunds (BIR Form No. 1914) for claims anchored on Section 204(C), in relation to Section 229 of the Tax Code, are as follows:

a. The Revenue District Office (RDO); or

b. The respective Large Taxpayers Audit Division (LTAD) or Large Taxpayers District Office (LTDO) under the Large Taxpayers Service (LTS).

illegally received or collected taxes. In all cases, the Revenue Officer (RO) - Assessment designated as RO of the Day shall receive claims filed at the aforesaid authorized offices and shall be responsible in checking the completeness of the documentary requirements submitted during filing of the application for tax credit/refund of erroneously or

claims for tax credit/refund filed by the taxpayers-claimant under their respective jurisdictions, regardless of the amount: The following offices shall be responsible in the processing, review and approval of

RDO LTAD/LTDO Processing Office Assessment Division Assistant (HREA), LTS Head Revenue Reviewing Office Executive Regional Director Assistant Commissioner (ACIR). LTS Approving Official

3. Section 204(C) mandates that the time-frame to grant in full or in part the claims submission of complete documents in support of the application. Hence, the processing offices shall strictly observe the 180-day time-frame to grant in full or in part the claims for tax credit/refund, broken down as follows: for credit/refund of erroneously or illegally received or collected taxes or penalties imposed without authority is one hundred eighty (180) days from the date of

a Regional Claims

Note: * Applicable only if there are review findings by AD for compliance by the RDO Review [Assessmert Division (AD)] Investigation/Processing (RDO)* Approval by Regional Director Total No. of Days Investigation/Processing (RDO) Should there be none. the entire 15 days shall be allotted to the review of AD Particulars Receipt of Application Number of Days from 40 1 50 80 15 1L

Page 2 of t1

jUL 0 3 2024

b. LTS Claims

Note: * Applicable only if there are review findings by the office of the HREA-LTS for Total No. of Days Investigation/Processing* Investigation/Processing Review (Office of the HREA-LTS) Approval by ACIR-LTS compliance by the LTAD. Should there be none, the entire 10 days shall be allotted to the review of HREA-LTS Particulars No. of Days from Receipt of Application I0 20 150 10

c.Time-frame to Process Payment for the Approved Tax Refund Claims

i. Approval is within the Regional Offices Level

Finance Service/Accounting Division Finance Division Administrative and Human Resource Management Division (AHRMD) Processing Office Days Allotted 10 8 6

Note: Subject to availability of funds from the Department of Budget and Total No. of Days Office of the Regional Director Management (DBM) 30 6

ii. Approval is with the LTS

Note: Subject to availability of funds from DBM Finance Service/Accounting Division Administrative Service Total No. of Days Processing Office Days Allotted 25 30 5

4. Only applications with complete documentary requirements enumerated in the

Checklist of Mandatory Requirements (Annex "A.1") shall be received and processed by the authorized processing office.

In instances where the taxpayer filed the tax credit/refund claim of erroneously or to file under Section 204(C), in relation to Section 229 of the Tax Code, the processing office shall recommend outright denial of the claim. illegally received or collected taxes beyond the 2-year prescriptive period required

5. If, upon filing and/or approval of the tax credit/refund claim, the taxpayer-claimant

has:

a} Outstanding tax liabilities (final and executory) as defined under Section U -II(1) of Revenue Memorandum Order (RMO) No. 11-2014, as evidenced by Certification on Outstanding Tax Liability/ies of Taxpayer following the

756

JUL 03 2024 Page 3 of 11

format prescribed in Annex "B" hereof which shall be valid for six (6) garnished by the BIR to collect either fully or partially the outstanding months from time of issuance, the processing/reviewing/accounting office shall notify the Collection Section of the Revenue District Office and Collection Division of the Revenue Region or the LT - Collection taxpayer-claimant, of the approved tax credit/refund which may be used or delinquent tax liability/ies of the taxpayer-claimant, subject to existing tax laws and revenue issuances on the enforcement and settlement of delinquent accounts. Enforcement Division (LTCED), whichever has jurisdiction over the

b) "Stop-Filer Cases" appearing on the records of the taxpayer-claimant shal not be a cause for the delay in the processing of the tax refund, bul nonetheless, should be resolved independently pursuant to existing policies and guidelines set-forth in RM0 Nos. 41-2011 and 28-2012 in order to

accord due process in settling open cases and to exercise just enforcement of civil remedies as mandated by the Tax Code.

to file the required tax return within the prescribed due date. as defined under item II of RMO No. 41-2011. "Stop-Filer Case" refers to a case created by the Return Compliance System due to an identified "stop-filer" or a registered taxpayer who failed

6. The result of the verification of the claim, whether approval or denial, shall be communicated to the taxpayer-claimant, which shall be signed by the authorized

the authorized processing office deny, in full or in part, the claim for refund, the revenue official and shall be served by the originating processing office. Should

same shall state the legal and/or factual basis for the denial.

7. The following rules shall govern should the taxpayer-claimant opt to elevate the full or partial denial of the claim to the Court of Tax Appeals (CTA):

a. In case of full or partial denial of the claim for credit/refund. the taxpayer decision with the CTA. affected may, within thirty (30) days from the receipt thereof, appeal the

b. In case the tax refund/credit is not acted upon by the authorized processing

office within the 180-day period, the taxpayer-claimant may opt to:

Appeal to the CTA within the 30-day period after the expiration of the 180 days required by law to process the claim; or

ii. Forego the judicial remedy and await the final decision of the authorized

processing office.

c. When no decision is rendered within the 180-day period and the taxpayer- claimant opted to seek for a judicial remedy within 30-days from such period. longer be processed. the administrative claim for refund shall be considered moot and shall no

Page 4 of 11 73aAw jUL 0 3 2024

8. The policies on tax refunds pursuant to Section 204(C), in relation to Section 229 of the Tax Code, as defined under Revenue Regulations (RR) No. 5-2024 shall be Strictly followed.

I PROCEDURES

A.Processing Office (RDO/LTAD)

1. Checklisting. The assigned "RO of the Day" in the RDO or LTAD/LTDC that has jurisdiction over the taxpayer-claimant shall:

A Check the accomplished Application for Tax Credit/Refund (BIR Form

No. 1914) for completeness and propriety:

b. Review the attached documents based on the applicable Checklist of Mandatory Requirements to determine if these are complete with the

required signatures and sworn statements.

Ascertain that the name of the signatory appearing on the application Special Power of Attorney or Secretary's Certificate, as the case may be. form is that of the duly authorized person/representative as shown on the

d. Stamp "RECEIVED" and sign the BIR Form No. 1914 including the issuance of Memorandum of Assignment. documents submitted, and forward to the Head of processing office for

2. Issuance and service of electronic Tax Verification Notice (TVN). To following rules shall be followed: credit/refund claims of erroneously or illegally received or collected taxes or pending the completion of the audit for all internal revenue taxes (AIRT). The comply with the 180-day processing required under Section 204(C) of the Tax Code, all offices concerned shall prioritize the processing of tax penalties imposed without authority under Section 204(C), in relation to Section 229 of the Tax Code, and the same should not be held in abeyance

a. The Head of the processing office shall issue an electronic TVN to authorize under Section 204(C). in relation to Section 229 of the Tax Code. the investigation of the application for tax credit/refund of erroneously or illegally received or collected taxes or penalties imposed without authority

b. The assigned RO/s shall encode the received application in the Case

the Internal Revenue Integrated System (IRIS). Management System (CMS) and Tax Credit Refund (TCR) modules under

c. The assigned RO/s shall serve the taxpayer-claimant with the original copy of the TVN and require the acknowledgement of receipt on the duplicate copy from its authorized representative.

Page 5 of 11 S5u

JUL 03 2024

3. Verification and Reporting. The assigned RO and Group Supervisor (GS) shall process and evaluate the claim based on submitted documents and investigation procedures prescribed in this Order.

a Ascertain completeness and authenticity of the documentary requirements

may cause the denial of the claim, either fully or partially. submitted by the taxpayer-claimant, as check-listed by the RO of the Day. Should there be lacking or deficiencies in the documents submitted, this

b. Ascertain that the time of filing is within two (2) years after the payment of the tax or penalty as provided under Section 204(C), in relation to Section 229 of the Tax Code.

c. Ascertain that the taxpayer-claimant is not included in the list of Cannot- Be-Located (CBL) taxpayers.

d. Validate the bank deposit slip, debit memo or proof of payment of the erroneously or illegally received or collected tax submitted by the

alone system, as well as the manual collection records of the processing office. taxpayer-claimant against the Bureau's information system and/or stand

The assigned RO/s shall secure/print copies of the following documents available at the records/database of the BIR:

the classification of the tax being refunded or credited Applicable tax return depending on Documents to be Verified/Printed For the BIR Form No 1604-E IRIS-RFP, eFPS, eBIRForms or RDO/LTS if the tax return is not available from the said systems. ITS. To be requested from Source/s of Data/Information

BIR Payment Certification In Revenue Accounting Division accordance with the format (RAD)/Collection Section, RDO/ prescribed under RMO No. 7-2016 National Office Data Center (RDC) Large Taxpayer Document Processing and Quality Assurance Division(LTDPQAD),LT Divisions Davao and Cebu. whichever is applicable or (NODC)/Revenue Data Center

applicable Annual Income Tax Return (AITR) covering the period of claim, if For the BIR Form No 1604-E IRIS-RFP, eFPS, eBIRForms or available from the said systems RDO/LTS if the tax return is not ITS. To be requested from

claim, if applicable Audited Financial Statement (AFS) for the year covered by the period of applicable, or eAFS if claimant RDO/LTS, whichever is submitted through the said facility

3:506 jUL 03 2024 Page 6 of 11

b.1 Only those tax returns filed on or before the filing of the application shall be considered in the processing of the claim. for credit/refund or the service of the eLA, whichever comes first.

b.2 The assigned ROs may also verify or request other relevant information available in the BIR records.

b.3 For data/documents requested from BIR offices other than the processing office, either manually or electronically, the BIR office processing office. Hence, BiR offices found to have not complied credit/refund shall be dealt with pursuant to Section 269(J) of the requesting processing office the requested data/document/s within number of days is included to the number of days allotted for the where the data/document/s is/are being requested shall furnish the fifteen (15) days from receipt of such request. Note that this allotted with the request or have caused the delay in the processing of the tax Tax Code.

b.4 In cases where the authenticity of the documents submitted can be verified electronically or online [e.g., through "quick-response" duly-signed notation that the same has been verified through the said (QR) codes], the assigned evaluator shall attach to the docket, a printout or screenshot of the result of the verification from the facility hosting the electronic/online system/application with the

system.

f. Ascertain that the tax credit/refund claim was not considered as a deduction to the gross income to avoid granting the tax benefit twice. Request for books of accounts and other relevant accounting records, as necessary, to noted. determine recording of the claim and reconcile findings and discrepancies

g. In the course of the verification of claim, the RO with the approval of the head of the processing office and upon recommendation of the GS, shall:

Recommend deduction from the claim such amount that may lead to the disallowance of the tax claimed; and

2. If the taxpayer has a tax liability, the processing Office, shall notify the Collection Section of the Revenue District Office and/or Collection either fully or partially for the outstanding delinquent tax liability of the taxpayer-claimant, subject to existing tax laws and revenue issuances on Division having jurisdiction over the taxpayer-claimant, of the approved tax credit/refund which may be used or garnished by the BIR to collect the enforcement and settlement of delinquent accounts. Division of the Revenue Region or the LT-Coilection and Enforcement

h. The assigned ROs shall prepare a memorandum report recommending the approval/denial of the claim for tax credit/refund for review"and preliminary approva! of the GS and Head of the processing office.

Page 7 of 11

3365 JUL'03 2024

i. The Head of the processing office (Revenue District Officer for those filed in the RDO or the Chief of LTAD/LTDO for those filed in LTS) shall sign the memorandum report recommending the approval/denial of the claim for tax credit/refund. The signature pages should be labeled as follows:

"Recommending Approval: " RDO Assessment Division "Reviewed by: "Approved/Disapproved:" Regional Director

LTAD/LTDO HrEa,LtS ACIR, LtS

j. The memorandum report together with the complete tax docket (Annex "C") shall be forwarded to the respective reviewing office.

B. Reviewing Office (Assessment Division/Office of the HREA-LTS)

I. The RO-Reviewer shall conduct a review of the endorsed docket of the claim. which is recommended for approval/disapprova! by the processing office.

2. The RO-Reviewer, GS and Head of the reviewing office shall ensure the correctness of the legal basis of the claim, the propriety of the recommendation, whether for approval or denial/disapproval, correctness of the amount recommended for approval, if any, and the completeness of the documents, schedules and working papers endorsed by the processing office.

3. Upon conclusion of the review, the following shall be followed for the affixture of signatures in the memorandum report:

a) For claims filed in the LTS. The RO-Reviewer under the respective in case there is concurrence with the amount recommended by the processing office. Should there be review findings that will warrant office shall return the tax docket of the claim to the processing office for findings. Office of the HREA shall initial under portion designated for the HREA adjustment to the amount recommended for credit/refund, the reviewing revision of the memorandum report and/or compliance of the review

The concerned processing office shall prepare the Tax Credit Certificate (TCC), Disbursement Voucher (DV), Budget Utilization Request and Status (BURS), and/or approval/denial letter, whichever is applicable.

b) For claims filed in the RDOs. The RO-Reviewer under the respective Assessment Division in case there is concurrence with the amount recommended by the processing office. Should there be review findings that will warrant adjustment to the amount recommended for credit/refund, the RO-reviewer shall prepare the memorandum report Assessment Division shall initial under portion designated for the Chief.

on the result of review and the revised amount to be approved. addressed to the Regional Director containing the recommendation based

Page 8 of 11

JUL 03 2024

approval/denial letter, whichever is applicable. The assigned RO-Reviewer shall prepare the TCC, DV, BURS, and/or

C. Approving Office (Regional Director/ACIR-LTS)

1. The approving official identified in Section i(2) of this Order shall prioritize the final review of the docket and memorandum report recommending approval or denial of the claim.

2. The approving official shall ascertain the correctness of the legal basis of the

claim, the propriety of the recommendation, whether for approval or disapproval, and correctness of the amount recommended for approval, if any.

3. Should the approving official find the report in order. the memorandum report shall be signed approved or disapproved.

4. The approving official also shall sign the TCC, DV, BURS, and/or letter for approved claims. or denial letter based on an approved report recommending denial of the claim.

5. The office of the approving official shall return the duly signed documents to the originating processing office, which shall serve the letter or notice to the taxpayer-claimant.

D. Processing and Issuance of TCC/Refund Check

l. For claims approved where the application is for the issuance of a TCC, the original and forward the TCC with the docket to the authorized approving Head of Office shall affix their initials on the copies of the TCC other than the official for signature. assigned RO of the processing office or the RO-Reviewer in the Assessment Division, whichever is applicable, shall prepare the TCC.The RO, GS and

2. If the taxpayer has an outstanding tax liability/ies (OTL), the approved TCC (TDM) subject to existing guidelines, policies and procedures set-forth under RMO No. 37-2011. The approved TCC, net of the said OTL, if any, shall then may be utilized to settle said OTL through the application of a Tax Debit Memo

be issued to the taxpayer-claimant. Otherwise. the total amount of the approved TCC shall be used to fully settle the said OTL.

In no case, however, shall a TCC can be used as payment if the OTL refers to those identified under RR No. 5-2000. Nevertheless, the aforementioned OTL item I.4.b of this Order prior to the issuance of the approved TCC to the taxpayer-claimant. shall first be settled through the existing policies and guidelines disclosed under

3. The Accounting Division and Finance Service/Finance Division and Office of the Regional Director shall process and approve the DV and BURS for payment

Page 9 of 11

3SOAW JUL 03 2024

of the claim based on the approved report and contents of the docket in accordance with existing rules and regulations.

4. The Administrative Service in the National Office/AHRMD in the Regional Office shall prepare and issue the refund check based on the approved voucher in accordance with existing rules and regulations.

E. Reporting

each month, to wit: Tax Credit/Refund (TCR) reports shall be submitted to the Assessment Service, Attention: Chief, Assessment Programs Division not later than the 3rd day of

From the processing offices - Monthly Report on Claims for Tax Credit/Refund Filed (Annex "K") and Monthly Report on Tax Credit/Refund Processed (Annex "L")

2.Fromthe reviewingoffices Credit/Refund Reviewed and Acted Upon (Annex "M"^) Monthly Report on Claims for Tax

3 From the approving offices - Monthly Report on Claims for Tax Credit/Refund Approved and Granted (Annex "N")

4 The duly signed TCR reports by the authorized officials. together with all

copies attached to the report in Microsoft Excel, shall be scanned and emailed to apd@bir.gov.ph.

S. In case of issuance of the refund check or TCC beyond the 180-day period mandated under Section 204(C), in relation to Section 229 of the Tax Code. the detailed reason for the delay shall be indicated on the Monthly Report on Claims for Tax Credit/Refund Approved and Granted.

F. Safekeeping of the Tax Docket

1. The entire tax docket of the claim shall be forwarded to the Commission on endorsed therewith, the requesting party shall submit a written request for a certified copy with the COA stating therein the reason for the request and the be imposed by COA. Audit (COA) if the claim for refund is approved, with notice to claimant of such transmittal. Should there be a need to obtain a copy of the documents specific documents that need to be certified subject to applicable fees as may

2. For claims that have been denied in full, tax docket of the claim shall be Division for claims filed with the LTS for file and future reference. forwarded to the AHRMD for regional claims or Records Management

TRANSITORY PROVISIONS

or collected taxes or penalties imposed without authority pursuant to Section 204(C) All pending applications for tax credit/refund of erroneously or illegally received

Page 10 of 11

3sou JUL 03 2824

thereof pursuant to Section I(6) of this Order. in relation to Section 229 of the Tax Code, that are in the possession of the Revenue District or Regional Offices as of the effectivity of this Order, including those claims which require further review and approval by the National Office pursuant to Revenue Memorandum Circular No. 17-2018, shall no longer be transmitted to the National Office. The concerned Regional Assessment Division shall review said claims prior to transmittal to the Regional Director for approval or disapproval

IV. REPEALING CLAUSE

inconsistent herewith are hereby amended, modified or revoked accordingly. All provisions of revenue issuances/memoranda or portions thereof that are

Y EFFECTIVITY AND TRANSITORY PROVISIONS

This Order shall take effect fifteen (l5) days following its pubiication in the Official Gazette or posting in the BIR website, whichever comes first.

ROME CUMAU, JR C assioner of Intemal Revenue

350m JUL'03 2024

Page m1 of f