General Course for Revenue Officers

TMD
TB 290 Slide 1
COLLECTION
PROCEDURES &
TAX REMEDIES
Topic 290
General Course for Revenue Officers
TMD
TB 290 Slide 2
COLLECTION PROCEDURES & TAX REMEDIES
1. Statutory Basis
2. Prescriptive Rules Governing Assessment
& Collection
3. Exception as to Period of Limitation of Assessment
& Collection
4. Accounts Receivable Management
5. Mode of Payment
6. Abatement / Cancellation of Tax Liability
7. Administrative Remedies Available to
Government
8. Administrative Remedies Available to Taxpayers
General Course for Revenue Officers
TMD
TB 290 Slide 3
OBJECTIVES
1. Enumerate the powers of the Commissioner of Internal
Revenue as to assessment and collection of taxes;
2. Know the prescriptive rules governing assessment
and collection;
3. Know the exceptions as to the period of limitation on
assessment and collection;
4. Become familiar with accounts receivable; and
5. Identify the administrative remedies available to
government and taxpayers.
General Course for Revenue Officers
TMD
TB 290 Slide 4
STATUTORY
BASIS :
TITLE 1, VII & X , National Internal
Revenue Code, as amended
PRESCRIPTIVE
RULE:
Taxes shall be assessed within three (3)
years after the last day prescribed by law
for the filing of the return, and no
proceeding in court without assessment
for the collection of such taxes shall be
begun after the expiration of such period.
In case a return is filed beyond the period
prescribed by law, the three year period
shall be counted from the day the return
was filed. A return filed before the last
day prescribed by law for the filing
thereof shall be considered as filed on
such last day.
Prescriptive Rule
General Course for Revenue Officers
TMD
TB 290 Slide 5
EXCEPTION TO THE PERIOD OF LIMITATION
Assessment of false or fraudulent return shall be assessed at any time within
ten (10) years after the discovery of the falsity, fraud or omission.
The period agreed upon by both the CIR and the taxpayer may be extended by
subsequent written agreement made before the expiration of the period
previously agreed upon.
Any internal revenue tax which has been assessed within the period of limitation
may be collected by distraint or levy or by proceeding in court within five (5) years
following the assessment of tax.
Any internal revenue tax, as provided in No. (2) may be collected by distraint or
levy or by proceeding in court within the period agreed upon in writing before the
expiration of the five (5) year period. The period so agreed upon may be extended
by subsequent written agreements made before the expiration of the period
previously agreed upon.
Nothing in the immediate paragraph shall be construed to authorize the
examination and investigation or inquiry into any tax return filed in accordance with
the provision of any tax amnesty law or decree.
1.
2.
3.
4.
5.
General Course for Revenue Officers
TMD
TB 290 Slide 6
It is any tax deficiency not settled within
thirty (30) days from the date of
assessment. Collection enforcement
must be initiated by the Revenue
Officer within five (5) year prescription
period.
ACCOUNTS RECEIVABLES
General Course for Revenue Officers
TMD
TB 290 Slide 7
COLLECTION FIELD FUNCTION TECHNIQUE
If the taxpayer does not respond
within the next ten (10) calendar
days, enforce collection through
administrative summary remedies
with the issuance of the
Warrant of Distraint and / or Levy.
General Course for Revenue Officers
TMD
TB 290 Slide 8
Assignment of Dockets for Collection
Collection Unit Chief / Collection
Supervisor
index each docket received
from RDO
enter each core in the
General Control Ledger
(GCL)-BIR Form No. 1253
Group Supervisor
assigns dockets to the fieldmen prepare a
memorandum of assignment to the
fieldmen for verification and enforcement
of summary remedies
RDO
docket with memo of
assignment for RDOs
signature
Group Supervisor
furnish a copy to the
Collection Supervisor
Revenue Officer
sign the memorandum
include the docket of
the case in his inventory
of tax cases
Administrative Division as listed in Form 40
shall:
microfilm
record in the logbook
index each docket in cards
furnish the Collection Division for
monitoring purposes
batch dockets of collectible
accounts in a maximum of ten (10)
dockets per batch
DOCKETS
Assessment
Division
RDO
General Course for Revenue Officers
TMD
TB 290 Slide 9
MODE OF PAYMENT
The taxpayer can pay his tax liability
using the following modes of payment:
1. Payment of the liability in full
2. Payment on installment basis
3. Payment by compromise settlement
General Course for Revenue Officers
TMD
TB 290 Slide 10
Requisites of a Request for Abatement
Tax Return and/or amended return with
copy of a previous return filed as basis
for comparison;
Evidence of payment of first installment
of tax due; and
Latest Certified Financial Statement.
General Course for Revenue Officers
TMD
TB 290 Slide 11
DEFINITION OF TERMS
DISTRAINT - refers to the seizure by the government of
personal property, tangible and intangible, to enforce the
payment of taxes.
LEVY - refers to the seizure by the government of real
properties and interest in or rights to such properties in
order to enforce the payment of taxes.
TAX LIEN - refers to the validated legal claim or charge by
the government on the property of the taxpayer either
personal or real, as security for the payment of taxpayers
tax liability filed by the RDO in the Register of Deed of City
of Province where the property is located.
General Course for Revenue Officers
TMD
TB 290 Slide 12
NOTICE OF LEVY - refers to the written notice by the CIR
of the act of seizure of real property addressed to the
Register of Deed of the City or Province where it is
situated, for annotation at the back of the title, in order
enforce collection of delinquent taxes due from a taxpayer.
FORFEITURE - implies a divestiture of property without
compensation, in consequence of a default or offense.
GARNISHMENT - a proceeding in the nature of an
attachment, by means of which credits, property, or effects
of the debtor in the hands of a third person may be
subjected to the payment of claims of the creditor of such
debtor.
DEFINITION OF TERMS
General Course for Revenue Officers
TMD
TB 290 Slide 13
CONSTRUCTIVE DISTRAINT - the distraining officer does
not take actual possession of the properties distrained,
leaves them with the taxpayer who shall be obligated to
preserve the same intact and unaltered and not to dispose
the same in any manner whatsover without the express
authority of the CIR.
SEIZURE - the distraining offices seizes and takes actual
possession of the property of the delinquent taxpayer.
DEFINITION OF TERMS
General Course for Revenue Officers
TMD
TB 290 Slide 14
Real Property
Warrant of Distraint and/or Levy
Under Section 207 of the NIRC:
a. Authority is given to the CIR or his duly
authorized representative if the amount
involved is in excess of P1, 000, 000
b. Authority is given to the RDO if the amount
is P1, 000,000 or less
c. For computerized districts (ITS), the
Warrants of Distraints and/or Levy will be
generated automatically by the system
General Course for Revenue Officers
TMD
TB 290 Slide 15
REQUISITES OF A TAX LIEN
There must be a previous ascertainment of the
sum due by means of an assessment;
There must be a demand for payment of the tax
liability, and
There must be a failure to pay the tax.
General Course for Revenue Officers
TMD
TB 290 Slide 16
SERVICE OF THE NOTICE OF LEVY
The Notice of Levy shall be sent thru registered mail or personally served upon:
The Register of Deeds or
Assessors Office of the
province or City where the
property is located
The Delinquent taxpayer
or his agent or manager
of the business in
respect to which the
liability arose
The occupant of the
property in question, if the
person is outside the
Philippines, the facts of
the Notice of Levy will be
posted on the property
levied upon and published
in a newspaper once a
week for three
consecutive weeks.
General Course for Revenue Officers
TMD
TB 290 Slide 17
ADVERTISEMENT
AND SALE
General Course for Revenue Officers
TMD
TB 290 Slide 18
CONTENTS OF THE NOTICE OF SALE
The amount of tax and penalty due;
The time and place of sale;
The name of the taxpayer against whom taxes are levied;
Exact location and short description of the property to
be sold;
The terms of payment to include cash or managers
check; and
A Statement that reads The BIR may reject any or all
bids.
General Course for Revenue Officers
TMD
TB 290 Slide 19
PUBLIC AUCTION / FORFEITURE
The sale shall be held either
at the main entrance of
the municipal building or city
hall or on the premises of
the property to be sold,
as the officer conducting
the proceedings shall
determine and as the notice
of sale shall specify.
General Course for Revenue Officers
TMD
TB 290 Slide 20
NEGOTIATED SALE
If there is an interested buyer on the real property absolutely
forfeited by the government, the levying officer shall:
Require the
buyer to make
a written offer
addressed to
the CIR through
the Regional
Director /RDO.
Evaluate and
analyze if the
offer is to the
best interest of
the government
General Course for Revenue Officers
TMD
TB 290 Slide 21
CONSTRUCTIVE DISTRAINT OF THE PROPERTY
OF A TAXPAYER
1. It is done when a person subject to tax, delinquent or not:
is retiring from any business subject to tax;
intends to leave the Philippines;
removes his property therefrom;
hides or conceals his property; and
performs any act tending to obstruct the collection of tax.
2. Constructive Distraint is only a safeguard for and not a
means of collection of the tax. There is no definite tax
due in constructive distraint unlike in actual distraint.
General Course for Revenue Officers
TMD
TB 290 Slide 22
WARRANT OF GARNISHMENT
Bank Accounts or Salaries
Property or Rights to Property
Properties placed under
Constructive Distraint
General Course for Revenue Officers
TMD
TB 290 Slide 23
SALE OF PROPERTY DISTRAINED &
DISPOSITION OF PROCEEDS
Sell the goods, chattels, etc., including stocks and
other securities to the highest bidder for cash, or
with the approval of the Commissioner, thru the
duly licensed produce or stock exchanges at the
time and place fixed in the notice.
If there is a winning bid, the Revenue Officer
executes a Certificate of Sale of personal
property.
General Course for Revenue Officers
TMD
TB 290 Slide 24
The Distraining Officer shall:
Require the buyer to make a written offer addressed
to the CIR thru the Regional Director/RDO, indicating
the amount offered and the mode of payment.
Prepare a memorandum, stating the background of the
case and the reasons for the negotiated sale to the RDO
requesting approval of the offer.
Prepare the Deed of Sale to be signed by the buyer, upon
receipt of the approval of the CIR. The Deed of Sale and
the entire docket will then be forwarded to the CIR.
PROCEDURES IN A NEGOTIATED SALE
General Course for Revenue Officers
TMD
TB 290 Slide 25
PROTEST ON THE ASSESSMENT
Procedures to be followed in cases of protest on assessments:
The Revenue Officer shall:
Stamp received on the letter of protest and attach the same
to the docket.
Determine if the letter of protest was filed by the taxpayer
within the 30 day period from receipt of the assessment
notice by the taxpayer (Sec. 228, NIRC).
Require the taxpayer to accomplish and sign a Waiver of the
Statute of Limitation not later than six months.