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RMO 1-90

RMO 1-90

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Published by cmv mendoza
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Published by: cmv mendoza on Dec 30, 2011
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 November 28, 1989REVENUE MEMORANDUM ORDER NO. 1-90Subject:Amendments to the provisions of a "Revised Schedule of Compromise Penalties"for internal revenue violations as prescribed in RMO 26-86.To:All Internal Revenue Officers and Others ConcernedI.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 ameans 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 NIRC;C.To adopt and implement a uniform application of the various compromise penalties for criminalviolations of the Tax Code; and casiaD.To provide supplemental guidelines on compromise penalties for resident taxfilers and non-residents as well.II.Policies:In order to attain these objectives, the following are hereby prescribed for the information and strictcompliance by all concerned:1.In all cases of criminal violations of the National Internal Revenue Code (NIRC), the penaltiesfor which are prescribed in Chapter II, Title X of the revised NIRC, it is directed that henceforth,compromise penalties be governed strictly in accordance with the attached "Revised Schedule of Compromise Penalties", marked as Annex "A" and made an integral part hereof.2.Certain acts/violations which are commonly resorted to by resident taxpayers as a means of taxevasion are deleted from the coverage thereof because they involve fraud. These violations include,among others the possession, printing and use of double or multiple sets of invoices.3.Certain acts/violations which are commonly resorted to and applicable to non-resident taxpayersare 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 CompromisePenalties embodied in Annex "A" to ensure uniformity of action.2.Cases involving fraud shall be referred to the Legal Branch having jurisdiction over the case, othe Prosecution Division as the case may be, for the institution of the corresponding criminal action.3.In no case shall the compromise penalty differ in amount from those specified in theaforementioned Schedule, except when duly approved by the Commissioner or, in a proper case, by theRegional Directors.4.Although all amounts of compromise penalties incident to violations shall be itemized in theassessment notice and/or demand letter along with the other administrative penalties like surcharge andinterest, the same should not form part of the total amount assessed/demanded but should appear separately as a suggestion to the taxpayer to pay in lieu of criminal prosecution. If paid, thecompromise penalties shall be collected and accounted for under the usual procedures, as internalrevenue.5.Since compromise penalties are only amounts suggested in settlement of criminal liability, andmay not therefore be imposed or exacted on the taxpayer in the event that a taxpayer refuses to pay thesuggested compromise penalty, the violation shall be referred for criminal action as heretoforementioned.6.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.IV.Repealing Clause:All other orders which are inconsistent herewith are hereby repealed or revoked accordingly.V.Effectivity:This Order shall take effect immediately.(Sgd.) JOSE U. ONGCommissioner of Internal RevenueREVISED SCHEDULE OF COMPROMISE PENALTIES(Based on Chapter II, Title X of the revised National Internal Revenue Code)CODE SEC.NATURE OF CRIMINAL PENALTY AMOUNT OF COMPROMISEVIOLATIONIMPOSEDPENALTY253Willful attempt to evadeFine of not more thanThis violation cannot beof defeat any tax imposed P10,000 or imprisonmentcompromised because itfor the National Internal not more than 2 years, orinvolves fraud - Sec. 204Revenue Code or the both. NIRC. payment thereof.254Willful failure to payFine of not less thanThere is no specific amountany internal revenue taxP5,000 nor more than of compromise penaltyat the time or times P50,000 or imprisonment prescribed but the same mayrequired by law or for not less than 6 months be compromised at theregulation.and 1 day but not more discretion of thethan 5 years, or both.Commissioner on a caseto case basis. cdFailure to pay any internalFine of not more than If the amount of tax unpaidrevenue tax at the time orP1,000 or imprisonmenttimes required by law orof not more than 6regulation.months, or both.But DoesCompromise(Sec. 274, NIRC)ExceedsNot ExceedisP xxxP 500P 2005001,0004001,0002,0007002,0005,0001,0005,0007,5001,5007,50010,0002,00010,00015,0003,00015,00020,0004,00020,00030,0006,00030,00050,0008,50050,000100,00012,000100,000500,00016,000500,0001,000,00020,0001,000,000x x x25,000254Willful failure to make/fileFine of not more thanThere is no specific amount of 
 
any return, keep records P5,000 nor more than compromised penalty pres-or supply information at P50,000 or imprisonmentcribed, but the same may bethe time or times required for not less than 6 monthscompromised at thediscretion by law or regulations.and 1 day but not more of the Commissioner on athan 5 years, or both.case to case basis.Failure to make/file anyFine of not more thanIf gross annual sales, earningsreturn or supply infor-P1,000 or imprisonmentor receipts; or gross estatemation at the time or for not more than 6 or gifttimes required by law ormonths, or both.regulations. (Sec. 274, NIRC)But DoesCompromiseExceedsNot ExceedisP x x xP 10,000P 20010,00020,00040020,00030,00060030,00050,0001,00050,00075,0001,50075,000100,0002,000100,000300,0003,000300,000500,0005,000500,0001,000,0007,5001,000,0005,000,00010,0005,000,00010,000,00015,00010,000,00025,000,00020,00025,000,000x x x25,000232Failure to keep/preserveFine of not more than If gross annual sales,earnings235records required by lawP1,000 or imprisonmentor receiptsor regulationsfor not more than6 months, or both.But DoesCompromise(Sec. 274, NIRC) ExceedsNot ExceedisP x x xP 10,000P 20010,00020,00040020,00030,00060030,00050,0001,00050,00075,0001,50075,000100,0002,000100,000250,0003,000250,000500,0005,000500,0001,000,0007,5001,000,0005,000,00010,0005,000,00010,000,00015,00010,000,00020,000,00020,00020,000,00050,000,00030,00050,000,000x x x50,000254Willful failure to withholdFine of not less thanThere is no specific amount of 

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