Collection Manual Bureau of Internal Revenue 2011 BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVEMESSAGE Tax revenue is the life blood of every economy that sustains and promotes the welfare and well-being of the people and nation that governments of every country have been serving. The Philippine tax system and administration largely operates on a voluntary compliance basis. The citizenry’s full understanding and support to the tax collection effort hinges on several factors, namely: tax education and information; tax friendly structure and processes; capable and “honest” tax administrators and collectors; and useful tax administration facilities and tools such as tax payment-collection guides and manuals. The BIR has initiated several tax administration programs and projects in its quest for greater collection effectiveness and efficiency. One important step in this regard is the preparation and completion of the enhanced Collection Manual. This important piece of work will update, re-engineer and revitalize the various systems, processes and procedures in tax collection especially of delinquent accounts and liabilities. Serving as a reference guide for the officers and revenuers of the BIR, this Manual also provides the basic policies and procedures needed to effectively implement collection enforcement strategies. Re-designed in a simpler and user-friendly format, this Manual has been made more illustrative through the use of visual flowcharts that are easy to comprehend and follow, Various processes, procedures and “best practices” on collection have been incorporated and updated. Also, the companion materials to the Manual — the brochures and flyers designed for the use and benefit of the taxpayers - will likewise enhance tax complianee and payments by providing taxpayers with the fundamental awareness of our collection processes. It is expected, therefore, that with the new Collection Manual, our officers and revenuers will be constantly encouraged to advocate the standard implementation of the BIR’s collection policies and processes, and thereby support the continuous attainment of our revenue goals. RECORDS MAY Bilton mere je Ne ana RECEIVEDINTRODUCTION The BIR Collection Manual (CM) has been prepared to serve as a reference guide for the officers and employees of the Bureau of Internal Revenue who are tasked to perform activities that are related to the area of collection as one of the Bureau's core functions. This Manual is intended to provide the revenuers with the necessary knowledge of the basic information on collection-related processes, as well as the updated policies, guidelines and procedures to effectively implement collection enforcement programs and. strategies. This CM is an enhancement of the original Collection Manual that was prepared in 1997 and draws initially from the working drafis prepared by the Collection Manual Task Force. It contains updated policies and processes based on existing revenue issuances pertaining to collection functions. It also documents some of the “best” practices on collection processes which are not yet supported by any existing revenue issuances. The (CM coverage is extensively expanded, after the thorough review of the collection mandate of the BIR to include certain re-engineered as well as new processes that have not been covered by any implementing guidelines. This CM is presented in four chapters: = Chapter I contains the basic collection processes from payment of taxes by taxpayers, by channels of collection and by modes of payment, the remittance thereof to the Bureau of the Treasury, up to collection reporting. ~ Chapter TI discusses collection reconciliation describing the present procedures in reconciling collections recorded by the Bureau of the Treasury vis-é-vis the BIR collection reports. The processes involving reconciliation of collections among the BIR collection units, from the district offices to the regional and national offices, are taken up by channel of collection. = Chapter III highlights the handling of delinquent accounts/implementation of collection enforcement strategies (ie. adoption of remedies relative to the collection of unpaid taxes and the implementation/enforcement of collection summary remedies). = Chapter IV focuses on the management of absolutely forfeited properties from the time the seized properties are declared forfeited in favor of the government up to the sale or disposition thereof. ‘The CM features discussions and presentations on the following: = Overview, definition of terms, extensive discussions of underlying pol guidelines precedes the presentation of collection processes and strategies in order to provide full understanding of the collection tasks, on a per chapter basis. BUREAU OF INTERN; RECORDS MOE BitistOR NEC 2 6 202 ye RRFOVTIwVoONn- Detailed narrative step-by-step procedures that outline the tasks of the concerned revenue offices and officers involved in the collection process. = Flow charts that visualize the collection process flows in the CM via walk- through approach. The charts present the tasks and steps undertaken by revenue officers in the identified revenue offices and indicating therein the expected ‘outputs in the collection processes, - Annexes containing the reportorial requirements and sample format reports and correspondences for better appreciation of the need to make useful reports that can serve as the performance output of the revenue offices and officers. - Supplementary information on related revenue issuances [Revenue Regulations (RR), Revenue Memorandum Orders (RMO), Revenue Memorandum Circulars (RMO), Revenue Administrative Orders, (RAO) Revenue Delegation Authority Order (RDAO), etc.] as well as some external forms such as the BIR Tax Retumns were footnoted on the text manual and were likewise appended as separate items or sections in the CM to make it more informative and user-friendly. It is hoped that this CM will be a useful guide to all the concemed officials and employees of the Bureau in the latter's endeavor for a standard implementation of the collection functions, and the development of more enlightened and skilled collection personnel. However, and in order to achieve the maximum benefits of the contents of this CM, all Bureau officials and employees involved in the discharge of collection functions are likewise encourage to continuously hone their skills and expertise by updating their respective knowledge of the pertinent provisions of the Tax Code and its amendments, as well as those information that ate covered by the existing revenue issuances and updates thereon. It is expected that the application of these complementary tools in the performance of their respective tasks will ensure more efficient discharge of their functions and effective implementation of collection enforcement strategies.ACKNOWLEDGMENT ‘This Manual is a project of the BIR-Tax Reform Administration Group (TRAG) and the World Bank (WB) as part of the program on the comprehensive reform of the country’s tax administration. The project is financed by the WB Institutional Development Fund. Sincere gratitude and appreciation is extended to BIR Commissioner Kim S. Jacinto- Henares and former Commissioner Joel L. Tan-Torres for the opportunity to undertake this project. Likewise, the support provided by DCIR Marietta U. Lorenzo, Tax Reform Group (TRAG), DCIR Nelson M. Aspe, Operations Group (OG), DCIR Lilia C. Guillermo,-Information Systems Group (ISG), DCIR Celia C. King, Resource Management Group (RMG), and DCIR Estela V. Sales, Legal and Inspection Group (LIG) in this endeavour is also deeply acknowledged. Special recognition is given to the following members of the Task Force on Collection Manual for their significant contributions, tedious work, and untiring efforts in spearheading the development and finalization of this CM in order to make it as exhaustive and extensive as it is: Elvira R. Vera = Project Manager == ACIR, Collection Service Roberto R. Taron = Task Force - Chief, Collection (TF) Head Enforcement Division Noe C. Balbedina - TFCotHead = Chief, Collection Division, RR No.4-San Femando, Pampanga Teresita F. Felipe = TF Member - Chief, Collection Programs Division Geraldine S. Bermas - TF Member - Chief, Revenue Accounting Division Ambrosio Geraldo L. Tungol - TF Member - Collection Mariza R. Uy - TF Member - Revenue District Officer, RDO No. 53A Las Piffas City Fe G. Sevidal - TE Member = Chief, Collection Division, RR No. 8- Makati City Teresita J. Venturillo + TE Member = Chief, Collection and Enforcement Section, EEOkDu MO vision me PC 2 8 2012 RECEIVERebecca Joy R. Leano - TF Coordinator = Collection Service Nellie R. Gatbunton = Project Coordinator - TRAG Sincere gratitude also goes to RDO Clavelina 8. Nakar, RDO Gerry O. Dumayas, RDO Rodolfo G. Mendoza, HREA Pablo M. Bastes Jr., Atty. Elenita B. Quimosing, HREA Gealdina E. Reyes, Teresita C.Solomon, Eleanor N. Litao, Rosana P. San Vicente, Ruth Vivian G. Gadia, Ceferina M. Ong, Virgilio R. Cembrano, Amparo M. Duque, Beatriz $. Pelino, Cynthia Lourdes Q. Santos, Melissa G. Bernal, Romeo G. Cruz, Ma. Victoria G. Reinante, Stela Marie M. Cariaso, Gina O.Villasoto, Delfin Usi, Maria Linda E. Bautista, Editha F. Valmores, Rosemarie V. Pinlac, Teresita G. ‘Marquinez, Jacqueline C. Mallari, Eden V. Dolor, Ma. Corazon R. Pineda, Ma. Nina C. Babida, Edgar E. Olleres, Cynthia A. Yabut, Vilma T. Laurel, Susan M. Ramirez, Nathanael E, Cadungog, Cynthia M. Catolico, Quirico A. Alburo, Shiela G. de Jesus, Lourdes D. de Leon, Pinky B. Monsayac, Christian D. Miguel, Gladys Almerido, Madelaine B. Menodiado, Ainie Joy R. Custodio, Mary Chris R. Samson, Rowena Maria R. Ongsotto, and Mary Major Portia B. Villasencio for their unselfish contributions and assistance to this project. Finally, we would like to thank the technical writer of this CM, Mrs. Teresita S. Luchico, former Assistant Commissioner of the BIR, who was ably assisted by Mr. Federico G. Luchico, Jr., former Assistant Secretary of the Department of Trade and Industcy, and former BIR Deputy Commissioner Victor A. Deoferio, Jr. for providing valuabie advice and support to the technical writer. To all those whose names we failed to include in the list but have given their share and support to this endeavour, thank you very much! BUREAU OF INTERNAL ‘REVENUE RECORDS MGT. DIVISION TEC 2 8 2012 RECEIVED ivACRONYMS ‘AAB ‘Authorized Agent Bank AAB-HO- Authorized Agent Bank-Head Office ACIR Assistant Commissioner of Internal Revenue AFPCES Asmed Forces of the Philippines Commissary and Exchange Service AGDB Authorized Government Depository Bank AR Accounts Receivable ARN Collectible Accounts Receivable-Non-Filing/Non-Payment ARP Collectible Accounts Receivable-With Protest ATCA, Authority to Cancel Assessment BAC Bank Accreditation Committee BAC-AA Bids and Awards Committee- Acquired Assets BCDA. Bases Conversion Development Authority BCS Batch Control Sheet BID Bureau of Immigration and Deportation BIR | Bureau of Internal Revenue BOL Bureau of Lands BP Batas Pambansa BSP Bangko Sentral ng Pilipinas BIr Bureau of the Treasury BTr-CO Bureau of the Treasury-Central Office BTr-PO Bureau of the Treasury-Provincial Office BTr-RO. Bureau of the Treasury-Regional Office ‘CAAP Civil Aviation Authority of the Philippines CBC China Banking Corporation CBR Collection and Bank Reconciliation ccp Corporate Communications Division ccT Condominium Certificate of Title | CDPP Constructive Distraint of Personal Property CED Collection Enforcement Division CES Certificate of Entitlement Subsidy cR Commissioner of Internal Revenue CISFA, Consolidated Inventory of Seized and Forfeited Assets CM Collection Manual CMS Case Monitoring System COA Commission on Audit COA-RA Commission on Audit-Resident Auditor coc Certificate of Coverage COCAF Certificate of Coverage Authentication Facility cPD Collection Programs Division CPL Consumer Price Index eas CRDC Consolidated Report of Daily Collection cs Collection Service net 26.2012 CSPP Constructive Seizure of Personal Property csv ‘Comma Separated Value CTA Court of Tax Appeals RECEIVEDCIC DA DAA DAC DAD DAF DAR DAS DAU DAW DBM DCIR DCIR-OG DDA DLN DOF DOH DPS DsT DTI DIM eDST eDT EPS eFTIS eNGAS EO ESM ETRD EZPK FAN FAO FC FDDA FNBS FRN GAA GAFMIS GCL GFI GOCC GPPB. ‘Community Tax Certificate Delinquent Account Collectible Delinquent Account With Application for Abatement Collectible Delinquent Account With Application for Compromise Collectible Delinquent Account-Dishonored Checks Collectible Delinquent Account-Final Assessment Notice/Demand Deposit Account Department of Agrarian Reform Uncollectible Delinquent Account-Suspense Collectible Delinquent Account-Unpaid Self-Assessed Tax ‘Uncollectible Delinquent Account -Write-Off Department of Budget and Management Deputy Commissioner of intemal Revenue Deputy Commissioner of Internal Revenue-Operations Group Demand Deposit Account Document Locator Number Department of Finance Department of Health Document Processing Section Documentary Stamp Tax Department of Trade and Industry Document Tracking Module Electronic Documentary Stamp Tax Electronic Data Transmission Electronic Filing and Payment System Electronic Fund Transfer Instruction System Electronic National Government Accounting System Executive Order Enforcement Service BUREAU OF INTERNAL Efficient Service Machine OE ee Te DIVIst Excise Tax Regulatory Division EZPAY Kiosk pee 28 2012 Final Assessment Notice For the Account Of Flow Chart RECEIVED Final Decision on Disputed Assessment Fair Market Value Final Notice Before Seizure Filing Reference Number General Appropriations Act Government Accountancy and Financial Management Information Sector General Control Ledger Government Financial Institution ‘Government-Owned and Controlled Corporation Government Procurement Policy Board iiGSD HREA Ic PO ISG Isos ISOS-DC IR ITs JEV JTRGA LBDES LBP LGU LMB IN LRA Ls LTAD LTCED LTDO LTDPQAD LTEAD LTO LTRAD LTS LTSEB MANCOM MARINA MB MOA MRCD MRT MIB MIC NASPP NBI NCA NEB NG NGA NIA NID NIRC NO NOE General. Services Division Head Revenue Executive Assistant Insurance Commission Intellectual Property Office Information Systems Group Information System and Operations Service Information System and Operations Service-Data Center Income Tax Return Integrated Tax System Journal Entry Voucher Journal of Tax Remittance by Government Agencies Limited Bank Data Entry System Land Bank of the Philippines Local Government Unit Land Management Bureau Letter Notice Land Registration Authority Legal Service Large Taxpayer Assistance Division Large Taxpayer Collection Enforcement Division Large Taxpayer District Office Large Taxpayer Document Processing and Quality Assurance Division Large Taxpayer Excise Audit Division Land Transportation Office Large Taxpayer Regular Audit Division Large Taxpayer Service Large Taxpayer Service Evaluation Board Management Committee Maritime Industry Authority Monetary Board ‘Memorandum of Assignment/ Memorandum of Agreement Monthly Report on Collections and Deposits Metro Manila Railway Transit Monthly Trial Balance Municipal Trial Court Notice of Actual Seizure of Personal Property National Bureau of Investigation Notice of Cash Allocation National Evaluation Board BUREAU OF INTER? National Government FERS MCT DIVISION National Government Agency National Irrigation Administration DEC 28 202 National Investigation Division ‘National Internal Revenue Code D National Office R E c E 1 v E Notice of EncumbranceNOL Notice of Levy NOS Notice of Sale NOSAFA Notice of Sale for Acquired/Forfeited Assets NSO National Statistics Office NTL Notice of Tax Lien oct Original Certificate of Title occe Office of the Government Corporate Counsel ore Over-the-Counter PCL Preliminary Collection Letter PDES Payment Data Entry System PDIC Philippine Deposit Insurance Corporation PGEPS Philippine Government Electronic Procurement System PNPSSS Philippine National Police Service Store System PPC Philippine Postal Corporation PSE Philippine Stock Exchange PTCL Provisional Tax Clearance RA Republic Act RAD Revenue Accounting Division RATE Run After Tax Evaders RCO Revenue Collection Officer RDAO Revenue Delegation Authority Order RDC Revenue Data Center RDO Revenue District Office REB Regional Evaluation Board RMC Revenue Memorandum Circular RMO Revenue Memorandum Order ROR Revenue Official Receipt RPS Returns Processing System RR Revenue Regulations RTC Regional Trial Court SARO Special Allotment Release Order SCTEP Subic-Clark-Tarlac Express Project SEC Securities and Exchange Commission SIRC Statement of Internal Revenue Collections sMSD Systems Maintenance and Support Division sop System Operations Division SRCD ‘Statement of Report on Collections and Deposits SVsC Sub-Value Added Tax Subsidy Check TAP Tax Amnesty Program TAS Taxpayer Accounting System TCC ‘Tax Credit Certificate TCL Tax Clearance TCRPV Technical Committee on Real Property Valuation TCT Transfer Certificate of Title 1D Tax Declaration TDM Tax Debit Memo BUREAU OF INTERNAL REVENUE Dec 28 202 ' RECEIVEDTDVF TEF TIED TIN TOP TPL TRA TSAC TSDM TWG WDL WG VAT vsc WCA-NGA wID Tax Delinquency Verification Form ‘Tax Expenditure Fund ‘Tax Information and Education Division ‘Taxpayer Identification Number Treasurer of the Philippines Third Party Liability Tax Remittance Advice Tax Subsidy Availment Certificate Tax Subsidy Debit Memo Technical Working Group Warrant of Distraint and Levy Warrant of Gamishment Value Added Tax Value Added Tax Subsidy Check Weekly Compliance and Alphalist of National Government Agencies Withholding Tax Division {BAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVEDcM 100 CM 101 CM 101.1 CM 101.2 CM 1013 cM 101.4 CM 102 CM 102.1 CM 102.1.1 CM 102.1.2 CM 102.2 CM 102.2.1 CM 102.2.2 CM 103 CM 103.1 CM 103.2 CM 104 CM 104.1 CM 104.2 TABLE OF CONTENTS THE COLLECTION MANUAL CHAPTER I TAX PAYMENT SYSTEM OVERVIEW PAYMENT THROUGH AAB .. AAB Over-the ~Counter (OTC) Acceptance of Tax Payment and Remittance Payment Through AB for Over-the-Counter (OTC) Transactions - Collection Reporting Monitoring of Performance of AABS .. Reporting and Handling Returned/ Dishonored Checks — PAYMENT THRO! LECTRONIC FILING AND PAYMENT SYSTEM (EFPS) Payment Through eFPS (Taxpayer e-Files and e-Pays) .. = Acceptance and Remittance o . Payment Through eFPS (Taxpayer e-Files and e-Pays) - Collection Reporting .. . Payment Through eFPS (e-Filing of Tax Return and Payment of Tax Due Thru OTC and/or Manual Filing and Payment of eFPS Taxpayers) .... E-Filing of Tax Retums and Payment of Tax Due thru OTC and/or Manual Filing and Payment of EFPS ‘Taxpayers - Remittance . . E-Filing of Tax Returns an Payment of Tax Due thru OTC and/or Manual Filing and Payment of EFPS Taxpayers - Collection Reporting PAYMENT THROUGH EFTIS .. Payment Through Electronic Fund Transfer Instruction System (EFTIS) — Remittance «0... Payment Through Electronic Fund Transfer Instruction System (BFTIS) — Collection Reporting PAYMENT THROUGH EFFICIENT SERVICE MACHINE (ESM) AND THE EZPAY KIOSK (EZPK) ... ‘Acceptance of ESM/EZPK Payment and Remittance 2... Payment Through ESM/EZPK-Collection Reporting .. BUREAU OF INTERNAL REVENUE. RECORDS MGT. DIVISION DEC 28 202 RECEIVED qe 18- 2- 26 - 31- 33- 41- 42- 4B 17 2 26 31 31 33 36 36 37 38 38 39 41 42 43cM 105 CM 10.5.1 CM 10.5.2 CM 106 CM 106.1.1 CM 106.1.2 CM 106.2.1 CM 106.2.2 M107 M 107.1 CM 107.2 CM 108 CM 108.1 CM 108.2 cM 109 CM 109.1 CM 109.2 M110 CM 110.1 CM 110.2 cM 111 CMIIL1 cM 111.2 PAYMENT THROUGH THE MOBILE PAYMENT/ (M-PAYMENT/G-CASH) SYSTEM ....... Acceptance of M-Payment/G-Cash Payment and Remittance Payment Through M-Payment (G-Cash)- Collection Reporting PAYMENT THROUGH ADDITIONAL VENUES PROVIDED BY AN AAB .. Acceptance of Tax Payment Through Additional Venues Provided by an AAB and Remittance ... Payment Through Additional Venues Provided by an AAB -Collection Reporting Payment of Taxes on Motor Vehicle Insurance Through Payment of Taxes on Motor Vehicle Insurance Through the AAB’s Receiving Outlet — Collection Reporting PAYMENTS THROUGH REVENUE COLLECTION OFFICER (RCO) . Payment Through the RCO -.Remittance .. Payment Through the RCO - Collection Reporting PAYMENT THROUGH THE BANGKO SENTRAL NG PILIPINAS (BSP) CHECKLESS PAYMENT SYSTEM .... ve Payment Through the BSP Checkless Payment System — Remittance Payment Through the BSP Checkless Payment System- Collection Reporting ..... PAYMENT THROUGH BUREAU OF THE ‘TREASURY (BTr) DIRECT CREDITING Payment Through BTr Direct Crediting — Remittance ... Payment Through BTr Direct Crediting — Collection Reporting .. PAYMENT THROUGH TAX REMITTAN ADVICE (TRA) . a Payment through TRA ~ Remittance Payment through TRA - Collection Reporting PAYMENT THROUGH SPECIAL ALLOTMENT RELEASE ORDER (SARO) Payment through SARO-Remittance Payment through SARO - Collection Reportin; ‘BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 202 RECEIVED 44- 45- 47. 48- 50- 55 ST 59. 63- 64. 65- 67. 9. nR- 14- 16 - 45 46 48 48 49 SI 34 37 58 61 61 e 64 65 66 67 69 2 74 18 80Annex 100-1.4 Annex 100-1.5 Annex 100-1.6 Annex 100-1.7 Annex 100-1.8 Annex 100-1.9 Annex 100-1.10 Annex 100-111 Annex 100-1.12 Annex 100-1.13 Annex 100-1.14 Annex 100-1.15 Annex 100-1.16 Annex 100-1.17 Annex 100-1.18 Annex 100-1.19 Annex 100-1.20 Annex 100-1.21 Annex 100-1.22 Annex 100-1.23 Annex 100.2 Annex 100.3 Annex 100.4 Reportorial Requirements and Related Documents... Consolidated Report of Daily Collections of Internal Revenue Taxes BSP Debit Advice BSP List of Remittances for Internal Revenue Taxes Collected by Banks on Various Dates BSP List of Remittances ~BIR Creditable Withholding Bank Branch Performance Statistics (BIR Form No. 28.41) LBDES Exception Repo List of Late Batches Consolidated Monthly Statistical Report of Revenue Collections (BIR Form No. 1209) .. Report on Retumed/Dishonored Checks (BIR Form No. 1258) . Monthly List of Dishonored Checks Received (BIR Form No. 1261) . Monthly List of Dishonored Checks Redeemed (BIR Form No. 1261) .. Summary of Penalties on Dishonored Checks Daily Collection Report BSP List of Remittances-BIR Own Tax Liabilities Collected by Banks on Various Dates Report of Collections and Deposits BIR Form 12.31) Monthly Consolidated Report of Collections and Deposits Statement of Report of Collections and Deposits BSP Credit Advice .. Weekly Compliance and Alpha list of National Government Agencies (NGAs Summary Listings of Weekly Compliance and Alpha list of National Government Agencies (NGAs) Statement of Internal Revenue Collections ... Monthly Report of Tax Subsidy Availment Certificate (TSAC) Tax Subsidy Debit Memo (TSDM) Large Taxpayers Service Tax Subsidy Availment Certificates (TSAC) Encoded for the Month Monitoring the Performance of AAB: BIR Forms and Retums That May be Filed and Taxes that may be Paid through Specified Channels of Collection Related Revenue Issuances BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 20 RECEIVED 81- 82 83 84 85 87 88 89 90- 94 95 96 97 98 99 100 101 102 103 104 105 106 107 - 108 109 110 11-119 120-122 123 - 129 iii| = om om om FLOW CHARTS FC 101.1 FC 101.2 FC 101.3 FC 101.4 FC 102.1.1 FC 102.1.2 FC 102.2.1 FC 102.22 FC 103.1 FC 103.2 FC 104.1 FC 104.2 FC 105.1 FC 105.2 FC 106.1.1 FC 106.1.2 FC 106.2.1 PAYMENT THROUGH AAB ‘AAB Over-the-Counter (OTC) Acceptance of Tax Payment and Remittance... Payment through AB for OTC Transactions - Collection Reporting Monitoring of Performance of AABs Reporting and Handling Retuned/Dishonored Checks. PAYMENT THROUGH ELECTRONIC FILING AND PAYMENT SYSTEM (eFPS) ‘Acceptance and Remittance of E-Paid Tax Payment through eFPS (Taxpayer e-Files and e-Pays) - Collection Reporting.. E-Filing of Tax Returns and Payment of Tax Due thru OTC and/or Manual Filing and Payment of eFPS Taxpayers Remittance . E-Filing of Tax Retums and Payment of Tax Due thru OTC and/or Manual Filing and Payment of eFPS Taxpayers — Collection Reporting PAYMENT THROUGH EFTIS Payment through Electronic Fund Transfer Instruction System (EFTIS) — Remittance Payment through EFTIS - Collection Reporting PAYMENT THROUGH EFFICIENT SERVICE MACHINE (ESM) AND ‘THE EZPAY KIOSK (EZPK) ‘Acceptance of ESM/EZPK Payment and 130-131 132-139 140 - 142 143 - 146 147 - 148 149 - 150 151 - 152 153 - 160 161 162 163 - 164 Reporting 165-172 PAYMENT THROUGH THE MOBILE PAYMENT/ (M-PAYMENT/G-CASH) SYSTEM Acceptance of M-Payment/G-Cash Payment and Remittance . Payment through M-Paymen/G-Cash- Collection Reporting .. 175-176 PAYMENT THROUGH ADDITIONAL VENUES PROVIDED BY AN AAB Acceptance of Tax Payment through Additional ‘Venues Provided by an AAB and Remittance Payment Through Additional Venues Provided by an AAB —Collection Reporting Payment of Taxes on Motor Vehicle Insurance through the AB's Receiving Outlet- Remittance... BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 iv RECEIVED 173-174 177-178 179 - 180 181 -182FC 106.22 FC 107.1 FC 107.2, FC 108.1 FC 108.2, FC 109.1 FC 109.2, FC 110.1 FC 110.2 FCMILI FCIN2 Payment of Taxes on Motor Vehicle Insurance through the AB's Receiving Outlet -Collection Reporting ...... PAYMENTS THROUGH REVENUE COLLECTION OFFICER (RCO) Payment Through the RCO -.Remittance .. Payment Through the RCO - Collection Reporting. PAYMENT THROUGH THE BSP CHECKLESS PAYMENT SYSTEM Payment Through the BSP Checkless Payment System — Remittance a Payment Through the BSP Checkless Payment System- Collection Reporting PAYMENT THROUGH BUREAU OF THE TREASURY (BTr) DIRECT CREDITING Payment Through BTr Direct Crediting ~ Remittance . Payment Through BTr Direct Crediting — Collection Reporting PAYMENT THROUGH TAX REMITTANCE ADVICE (TRA) Payment through TRA — Remittance Payment through TRA- Collection Reportin PAYMENT THROUGH SPECIAL ALLOTMENT RELEASE ORDER (SARO) Payment through SARO-Remittance .... Payment through SARO-Collection Reporting EAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 202 RECEIVED 183 - 184 185 - 186 187-189 190 191 192 193 194 - 195 196 - 198 199 200 - 201THE COLLECTION MANUAL CHAPTER I TAX PAYMENT SYSTEM CM 100 OVERVIEW THE COLLECTION CHANNELS AND MODES OF PAYMENT National internal revenue taxes are, at present, generally collected through Authorized ‘Agent Banks (ABs). Taxpayers can pay their taxes through AABs using. the following payment systems: i) over-the-counter payment; ii) Electronic Filing and Payment System (cFPS); iii) Electronic Fund Transfer Instruction System (eFTIS) which is used by commercial and universal banks in paying the banks’ own tax liabilities, and iv) other payment facilities of an AAB such as the Efficient Service Machines (ESM)/eZPAY kiosk (EZPK), Mobile (G-Cash) Payment facilities; and other receiving outlet/s of an AAB. In places where there are no AABs, tax payments can be made directly through Revenue Collection Officers (RCOs) ) who shall issue Revenue Official Receipt (BIR Form No. 25.24) for each and every tax payment received. However, under certain conditions as may be allowed by the Commissioner of Intemal Revenue, RCOs can also receive tax payments during specific tax deadlines and tax filing seasons, even if there are AABs in the area, for the convenience of taxpayers. Some tax payments are likewise made through direct crediting such as the Checkless Payment System for intemal revenue taxes due from the Bangko Sentral ng Pilipinas (BSP) as well as taxes due on the disposition of forfeited assets by the BSP and the Direct Crediting of the Bureau of the Treasury (BTr) of its own tax liabilities including withholding tax payments on government securities and other payments of some National Government Agencies (NGAs) under special laws. Other payment schemes include the collection of withholding taxes from the NGAs through Tax Remittance Advice (TRA), and the payment of taxes by some NGAs and Government-Owned and Controlled Corporations (GOCCs) through the Special Allotment Release Order (SARO). DEFINITION OF TERMS For purposes of this Manual and in order to provide clarity and better understanding of the policies and procedures in the implementation thereof, the words and phrases herein ided are defined as follows: provided are defined as follows: BUREAU OF INTERNAL REVINU RECORDS MGT. PIVISION DEC 28 202 RECEIVED* Revenue Memorandum Order (RMO) No. 11-2008, * Revenue Regulations (RR) No. 5-2000, - Authorized Agent Bank (AAB) - refers to a commercial or universal bank authorized by the BIR to collect intemal revenue taxes and receive the corresponding retums/attachments in accordance with the criteria for accreditation under pertinent revenue issuances.’ . Over-the-Counter Payment (OTC) - refers to the manual payment of tax liabilities to ABs . Cash Payment - refers to the payment of tax liabilities in the currencies (paper bills or coins) that are legal tender in the Philippines. . Bank Debit System - refers to the system whereby a taxpayer, through a bank debit memo/advice, authorizes withdrawals from its/his/her existing bank account for payment of tax liabilities. . Tax Debit Memo (TDM) - refers to BIR Form No. 2311 duly issued by the Commissioner or his duly authorized representative acknowledging that the taxpayer named therein has duly paid its/his/her internal revenue tax liability through the use of a duly issued and existing Tax Credit Certificate (TCC)’. The TDM serves as the official receipt from the BIR evidencing a taxpayer’s payment or satisfaction of his tax obligation. The amount shown therein shall be charged against and deducted from the credit balance of the aforesaid TCC. . Check - refers to the bill of exchange or order instrument drawn on a bank that is payable on demand, . Limited Bank Data Entry System (LBDES) - refers to the Integrated Tax System (ITS) capability which allows the AAB to encode and send payment information to the Revenue Data Center (RDC) through Electronic Data Transmission (EDT). . Electronic National Government Accounting System (eNGAS) - is an accounting software developed by the Commission on Audit (COA) to ensure correctness, reliability, completeness and timeliness in recording government financial transactions and to generate financial reports in accordance with the policies and procedures of the new NGAS. Batch Control Sheet-A (BCS-A) - the form prepared by the bank branch and the RDO, that summarizes collection data from the return/ form/ declaration and deposit/payment slip of taxpayers settled through cash, check, or a combination of both. BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED10. Batch Control Sheet - B (BCS-B) - this form is prepared by the Revenue District Office (RDO) and summarizes collection data from tax-exempt, break-even, no payment, or refundable retumn/form/declaration. 11. Journal Entry Voucher (JEV) - this form serves as certification that the amount of collections has been credited or debited to the BIR’s account in the BTr. cM 101 PAYMENT THROUGH AAB The Bureau of Internal Revenue is vested with the primary responsibility of enforcing the collection of taxes through the banking system, in relation to the provisions of the National Internal Revenue Code (NIRC) of 1997, as amended, designating the banks as duly constituted agents of the Commissioner to receive internal revenue tax payments’. Several related Revenue Regulations (RRs) were issued and Memoranda of Agreement (MOAs) were executed between the BIR, the BTr and the concerned banks for the effective collection and remittance of internal revenue taxes paid through banks. M1011 AAB OVER-THE-COUNTER (OTC) ACCEPTANCE OF TAX PAYMENT AND REMITTANCE [Refer to Flow Chart (FC) 101.1] Intemal revenue taxes paid through ABs are generally made over-the-counter. AABs accept payment of taxes over-the-counter in accordance with the MOAs between the BIR, the BTr and the concemed banks, as well as the relevant issuances such as those on the modes of and procedures for the payment of taxes. Tax payments are then remitted electronically to the BTr through the BSP and are recorded by the BTr and the BIR accordingly. A. Acceptance of Tax Payment ‘The AAB branch shall: 1. Receive from the taxpayer in triplicate copies the properly accomplished tax return/form/declaration, necessary attachments thereto, if any, and the BIR- prescribed deposit slip; A BIR prescribed deposit slip must have the following information: transaction date, name and Tax Identification Number (TIN) of taxpayer, BTr-BIR account number, account name which is BTr-BIR, name of the drawee bank and check number (for check payments), bank debit advice number (for debit system payment), and the amount of tax to be paid. Said deposit slip shall be accomplished and issued in triplicate copies, distributed as follows: * Executive Order No. 937 issued on March 1, 1984; Section 12 of the NIRC of 1997, as amended. BUREAU OF INTERNAL REVENUE. RECORDS MGT VISION DEC 28 202 ? RECEIVED~ Original (taxpayer's copy), - Duplicate (AAB’s copy), and - Triplicate (to be attached to the tax return/form/declaration) 2. Check the completeness and correctness of presented documents, ensuring that that tax return/form/declaration is properly filled up as to, among others, the name of the taxpayer, signature of the taxpayer/authorized representative or agent, and the amount to be paid; 3. Stamp “RECEIVED” the three copies of the tax return/form/ declaration, attachments/documents, if any, and deposit slips, the BIR— prescribed deposit slip, and other documents evidencing proofs of tax payment such as, among others, the copy of the TDM and the applicable withholding tax certificates (BIR Form Nos. 23.07 and 23.16). The attachments to the income tax return shall be stamped only on the page of the Audit Certificate, the Balance Sheet and the Income Statement. The other pages of the financial statements and its attachments need not be stamped “Received”. In case of corporations and other juridical persons, there should be stamped “RECEIVED” in at least two (2) sets extra copies of the audited financial statements for filing with the Securities and Exchange Commission;* 4, Accept tax payment and machine validate the BIR-prescribed deposit slip accomplished by the taxpayer as evidence that the BIR tax payment was deposited to the account of the BTr; The machine validation on the retum/form/declaration/deposit slip shall reflect the date of payment, amount paid and transaction code, the name of the bank, branch code, teller’s code and teller’s initials.” 5. Depending on the mode of payment, ensure that the following BIR policies are complied with: © 5.1. Iftax is paid in cash, there is no limit in the amount of cash payment. 5.2 If the tax is paid thru check, 5.2.1. The taxpayer shall indicate the following data in the space provided in the check: “PAY TO THE ORDER OF” the presenting/collecting bank of the bank where the payment is to be ee ‘BUREAU OF INTERNAL REVENUE 4RMO No. 6-2010, as amended by RMO No.13-2010. ‘RECORDS MGT. DIVISION SRR No. 16-2002. ‘RR No. 4.97, as amended by RR No, 6-98 and RR No. 16-2002. DEC 28 2012 RECeivEDcoursed and FAO (For the Account of Bureau of Intemal Revenue as payee; and under the “ACCOUNT NAME” the Taxpayer Identification Number (TIN). Checks for the payment of BIR taxes and other charges shall cover one tax type for one return period only. Below is a sample of a check tax payment where the drawee bank and the presenting bank are one and the same. Below is a sample of a tax check payment where the drawee bank and presenting bank are different from each other. ‘The following checks are not acceptable as check payments: accommodation checks - checks issued or drawn by a party other than the taxpayer making the payment; second-endorsed checks - checks issued to the taxpayer as payee who indorses the same as payment for taxes; stale checks - checks dated more than six (6) months prior to presentation to the authorized agent bank; postdated checks - checks dated a day or several days after the date of presentation to the AAB; BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 202 RECEIVED- unsigned checks - checks with no signature of the drawer; and - checks with alterations/erasures, unless duly counter-signed by the drawer/authorized signatory himself/herself. 53. Ifthe tax is paid thru the bank debit mode, the taxpayer must have a bank account with the AAB branch where he/sherit intends to file and pay his/her/its tax return/form/declaration, provided that the said AAB branch is within the jurisdiction of the Revenue District Office (RDO) where the tax payment is due and payable. 5.4, Ifthe tax is paid thru Tax Debit Memo, the TDM number should be indicated in the BIR tax return/form/declaration/ payment slip. A photocopy of the front and back pages of the TCC, the source of the TDM, as well as a copy of the TDM must be attached to the BIR tax return/form/declaration. Note that a TDM is not acceptable as payment for withholding taxes, including the fringe benefit tax, as well as for taxes, fees and charges collected under special schemes of the BIR such as excise tax deposits to cover payment of taxes for future removals of excisable articles.” Release triplicate copy of the machine-validated tax return/form/ declaration and the original copy of the deposit slip to the taxpayer; and. Post the tax payment collected, using the on-line tellering system, by crediting the BTr demand deposit account in the head office of the AB. B. Remittance of Tax Collections The AAB-Head Office (AAB-HO) shall: 1 Prepare the Consolidated Report of Daily Collections (CRDC) (Annex 100-1.1) and send to the BTr and the BIR-NO-Revenue Accounting Division (RAD). Under existing policies, AABs transmit the CRDCs to RAD through eCRDC facility daily; and Remit tax collection to the BTr, thru the BSP, on the prescribed due date depending on the float period for OTC transactions, as officially notified by the BIR. The AAB-HO shall prepare the BSP Authority to Debit AAB-HO’s Demand Deposit Accounts (DDA) (Annex 100-12) in favor of the BTr corresponding to the total daily collections and send the same to BSP, copy furnished RAD. BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION 7 RR No. $-2000. DEC 28 2012 RECEIVED 6‘The BSP shall: 1. Debit the AAB-HO’s DDA corresponding to total daily tax collections due for remittance and credit such amount of collection to the “Special Account-BIR Collection” of the Treasurer of the Philippines (TOP); and 2. Prepare and submit the BSP List of AAB remittances (Annexes 100-1.3/100-1.4) daily through e-mail to BTr and the RAD. C. Recording of Tax Collections The BTr shall: 1. Prepare the JEV on tax collections from the AABs; and 2. Record daily in its books of accounts the BIR collections/remittances from AABs, and provide RAD with copy of the JEV on tax collections. ‘The BIR-RAD shall: 1. Receive the CRDC from AAB-HO in Comma Separated Value (CSV) format via eCRDC facility; 2. View the eCRDC validated file and export the Daily Summary of Collections through AABs in Excel format; 3. Print the Daily Summary of Collections and validate the CRDC data with information from the BSP Authority to Debit, BSP List of AAB daily remittances, and the BTr JEV; and 4, Prepare the BIR JEV and record the tax collections in the eNGAS. M1012 PAYMENT THROUGH AAB for OTC TRANSACTIONS- COLLECTION REPORTING [Refer to FC 101.2] The amount of tax collections reported is indicative of the level of performance of the BIR. Proper reporting should be observed to accurately reflect collection information. The collection reporting processes involve data entry by the AAB branch, in accordance with the MOA between the BIR, the BTr and the concemed banks; the uploading of tax payment data into the ITS database by the Revenue Data Center (RDC); the retrieval of tax retums, payment and retums processing, and the reporting of collections by the RDOs. A consolidated monthly statistical report of revenue collections is then prepared on a monthly basis. BUREAU OF INTERNAL REVENUE. RECORDS MGT. DIVISION pec 28 202 RECEIVEDCollection Data Entry ‘The AB branch shall: Batch tax retums by 50s, prepare Batch Control Sheet (BCS-A) in triplicate copies, and attach the original and duplicate copies of BCS-A to the physical returns; and Encode the payment information [date of transaction, name of taxpayer, TIN of taxpayer, tax type that is being paid for, return period for the tax type being paid for, amount of tax paid, name of the drawee bank and check number (for tax payments through checks)] into the LBDE System and transmit via Electronic Data Transmission (EDT) to the concemed BIR RDC within forty-eight (48) hours from the time of collection on regular days and seventy-two (72) hours during tax deadlines. The AAB branch shall also send the daily collection reports, to the concemed AAB-HO for consolidation. Uploading of Tax Payment Data ‘The RDC shall: Receive tax payment information and upload payment data transmitted by the AAB branch to the EDT server, Run the payment batch validation in the EDT server. In case of invalid data, inform immediately the concerned AAB branch of the existence of such error in the transmitted flat file; Upload the data contained in the flat file to the Collection and Bank Reconciliation (CBR) System-Integrated Tax System (ITS) database via nightly batch validation. Once uploaded and the payment data is tagged as “POSTED”, the collection data is automatically posted to the taxpayer’s ledger; Generate, on a daily basis, the payment suspense report, and forward the same to the concemed RDO for appropriate resolution; Generate the daily summary of uploaded collection reports and transmit the same immediately to the RDO/LTDO/other concerned offices for validation; and Generate the Consolidated Monthly Statistical Report of Revenue Collections (BIR Form No. 12.09) and forward the same to concemed RDO for validation not later than the 10" day of the following month. BUREAU OF INTERNAL REVENUE, RECORDS MGT. DIVISION DEC 28 2012 : RECEIVEDThe RDO shall: * 1. Collection Section Retrieval of Tax Returns 11 Revenue Officer (Retriever) LLL Retrieve, on a daily basis from each AAB branch, the duly accomplished BCS-A, the original and duplicate copies of machine-validated tax returns/forms/ declarations, together with all attachments, and the duplicate copies of the machine-validated deposit slips; Check the completeness of the physical tax retums/forms/ declarations against the number of payment transactions reflected in the BCS-A within the premises of the AAB branch. In case of incomplete documents, require the AB branch to instantaneously submit the missing/lacking documents; and Forward all the documents retrieved from the AAB branch to the RDO's Receipt and Control Data Controller. 1.2. Revenue Officer (Receipt and Control Data Controller) 124. 1.23. *RMONo. 32-2000, Receive from the Revenue Officer (Retriever) all the documents retrieved from the AB branch; Log the BCS-A and the tax retums/forms/declarations in the Documents Received from AABs Worksheet by recording the date of collection, name of AAB, bank code, and the total collection per BCS-A. Provide the Bank Liaison Officer a photocopy of the said worksheet on a weekly basis; Check the sequence of the retrieved BCS-A number to ensure that there are no missing BCS-A. In case of any missing BCS-A number, require the concemed AAB to submit the hard copy of the unsubmitted BCS-A and transmit the payment data through EDT. ‘Where the discrepancy or the gap in the BCS-A series arose from simple error by the concemed AAB branch, require the AB to adjustrectify the error committed; and INTERNAL REVENUE Se gRDS MGT DIVISION DEC 28 2012 RECEIVED 712.4, Photocopy the BCS-A for file/record purposes, and forward the original and duplicate copies of BCS-A as well as the original and duplicate copies of the tax returns/forms/declarations and all the attachments thereto, if any, and the duplicate copies of the deposit slip to the Collection and Bank Reconciliation (CBR) Preprocessing Data Controller. CBR Processing Ld. 12. Revenue Officer (CBR Pre-processing Data Controller) Tle Receive the original and duplicate copies of BCS-A, the tax returns/forms/declarations and all the attachments thereto, if any, and the duplicate copies of the deposit slips from the Receipt and Control Data Controller. Acknowledge the receipt of tax retums/forms/ declarations on the photocopied BCS-A; . Return the photocopy of the BCS-A to the Receipt and Control Data Controller where the acknowledgment receipt was properly reflected; Affix the BCS number on each and every copy of the tax return/form/ declaration; . Verify existence of bank procedural errors on the BCS-A and the tax retumns/forms/declarations, and accomplish the Bank Branch Performance Statistics (BIR Form No. 28.41) (Annex 100-1.5); and . Forward all the original and duplicate copies of the BCS-A, tax returns/forms/declarations, and all the attachments thereto, if any, and the duplicate copies of the deposit slips and the duly accomplished BIR Form No. 28.41 to the CBR Data Verifier. Revenue Officer (CBR Data Verifier) 124 12.2. Receive from CBR Pre-Processing Data Controller the original and duplicate copies of the BCS-A, tax retumns/forms/declarations and all the attachments thereto, if any, and the duplicate copies of the deposit slips and the duly accomplished BIR Form No. 28.41; Verify on CBR-BCS-CRDC Reconciliation Inquiry Screen if the BCS has been uploaded. If not yet uploaded, coordinate with the RDC why the subject BCS was not yet uploaded. If uploaded, match the individual entry with the physical retums/forms/ BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 1013. 14 23h 1.24, declarations. Coordinate with AAB the discrepancies on the BCS- A and the tax retums for procedural/retun errors and the duly accomplished BIR Form No. 28.41; Encode the information in BIR Form No. 28.41 and forward the same to the Bank Document Analyst, together with the original and duplicate copies of the BCS-A/tax retums/ forms/declarations with procedural/ return errors; and Forward the BCS-A and tax returns/forms/declarations without procedural and return errors to the Data Processing Section (DPS) ofthe RDO for returns processing. Revenue Officer (Bank Document Analyst) Tatts 13.2. 13.3. 13.4. 13.5. Receive from the CBR Data Verifier the original and duplicate copies of BCS-A and tax retums/forms/ declarations with procedural/encoding errors together with the encoded BIR Form No. 28.41; Verify the reported discrepancies by comparing BCS-A against cRDC; Photocopy the BCS-A and the tax retums/forms/ declarations with proceduraV/encoding errors and attach these to the LBDES Exception Report; Prepare the preliminary notice of violations related to timeliness in the submission/transmission of collection report data and accuracy of the collection information submitted by the AABs; and Forward the verified BCS-A, tax retums/forms/declarations, BCS Summary Report, LBDES Exception Report (Annex 100-1.6), List of Late Batches Report (Annex 100-1.7), and the preliminary notice of violations to the Bank Liaison Officer. Revenue Officer (Bank Liaison Officer) 14.1. 1.4.2. Receive and compare the accomplished Document Received from AABs worksheet on a weekly basis from the Receipt and Control Data Controller and the weekly report on Transmitted Collection Data from the Computer Operations Network Engineering RDC; Receive from the Bank Document Analyst the verified BCS-A, tax returns/forms/declarations, BIR Form No. 28.41, LBDES RECORDS MGT. DIVISION ‘a DEC 28 202 RECEIVEDLS. 143. 144, 145. Exception Report, BCS Summary Report, List of Late Batches Report, and the preliminary notices of violations; Send the preliminary notice of violations to the concemed AAB together with the LBDES Exception Report, List of Late Batches Report and photocopies of BCS and tax returns/forms/declarations with error; Evaluate AAB responses to the issued preliminary notices of violations. Report to the Collection Programs Division (CPD) of the Collection Service the AABs who fail to comply with the preliminary notices of violation; and Forward the original and duplicate copies of BCS-A and tax retums/forms/declarations with proceduraV/encoding errors to the Returns Processing System (RPS) Pre-processing Data Controller. CBR Error Handler (For Payment Information) 15.1. 15.2. 15.3. Receive the Payment Suspense Report from the RDC; Resolve the suspended tax payment transactions. If error arises from wrong encoding of payment information in the LBDES, validate the information from the registration database and modify the information in the CBR Payment Screen. If the payment information cannot be modified as in tax type and the amount of tax paid, cancel the previously encoded data and refer the matter to the RDO for the encoding/ adding of the correct data/amount; and Request for the copy of the tax returns/forms/declarations from the Document Custodian, if necessary. 2, Document Processing Section RPS Processing 21 RPS Pre-processing Data Controller 2A. Receive original and duplicate copies of the following: - BCS-A and tax returns/forms/declarations and attachments without procedural/encoding errors from the CBR-Data Verifier, and BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 202 RECEIVED 122.1.2. Dia! 214. - BCS-A and tax returns/ forms/declarations and attachments with procedural/encoding errors from the Bank Document Analyst; Detach the original and duplicate copies of BCS-A from the tax retums/forms/declarations; Forward the original copies of BCS-A to the Administrative Division and file temporarily the duplicate copies of the BCS; Sort, classify and batch tax retus/forms/declarations according to form type on a daily basis; thus, a batch shall not contain retums received on different dates. A batch shall contain not more than fifty (50) documents; . Segregate the following tax returns/forms/declarations that will be encoded in RPS: - Withholding Tax Retums (BIR Form Nos. 1600, 1601, 1602 and 1606) - Income Tax Retums (BIR Form Nos. 1700, 1701, 1701Q, 1702, 1702Q and 1706) - Documentary Stamp Tax Returns (BIR Form No. 2000) - Value-Added Tax Returns (BIR Form Nos. 2550M and 2550Q) - Percentage Tax Retums (BIR Form Nos. 25S1M and 2551Q); . Assign and indicate the Document Locator Number (DLN) on the original and duplicate copies of each and every tax return/form/declaration by means of rubber stamp or sequential numbering machine, reflecting the following ITS information: RDO Code - 3digits Location Code = character (R for returns) Year of Retum - 2digits Month Filed ~ 2digits RECORDS MGM, DIVISION DEC 28 202 1B RECEIVEDSequence Number - _ 6 digits which shall start with 000001, 000002 and so on regardless of month Example: 040R1012008891 ‘Where: 040 Refers to RDO 40-Cubao R Refers to Return (e.g. VAT) 10 Refers to the year of return filed 12 Refers to the month of retum filed 008891 Refers to the sequential number of retums processed for the month. The Number should be reset to 000001 at the beginning of each year. 2.1.7. Segregate the original from the duplicate copy of the tax returns/forms/declarations; 2.1.8. Attach Batch Header Form to the batched original and duplicate tax returns/forms/declarations using the updated version of Batch Header Form (BIR Form No. 26.04). The “Date Prepared” and “Batch Header Number” portions shall be filled up in the following ‘manner: Date Prepared M|M D/D| |yly}y ¥ ‘Where: MM is the month of the year DD is the day of the month RECORDS Mey eee YYYY is the current year DEC 28 2012 Batch Header Number RECEIVED y]/y| |R}|p]o 9}9 | 9] 9}9 142.1.9. 2.1.10. 2411. 2.1.12. 2.1.13. 21.14. 21.15. 2.1.16. * RMO No. 32-2000. Where: YY is the last two (2) digits of the current year RDO _ is the RDO Code 99999 is the sequence number which shall start with 00001, 00002 and so on regardless of month Retrieve duplicate copies of BCS-A; Forward the duplicate copies of BCS-A and the tax returns/forms/declarations with attached Batch Header Form to the Assessment Section; Check each tax return/form/declaration as to the completeness of information. Ensure that all mandatory fields have data/values; Access the Registration System database to inquire missing taxpayer information like Taxpayer Identification Number (TIN), accounting period, and tax types. Use pencil in filling up the tax returns/forms/ declarations; Check correctness of income, deduction, exemption, tax due, tax credit, advance payment, and other data reflected in the tax returns/forms/declarations; Accomplish the “apron sheets”® only for tax retums/forms/ declarations with mandatory fields that are not properly filled-up and attach to the tax retum/form/declaration. The “apron sheet” contains mandatory fields which, if left empty, may cause the suspension of the tax returns/forms/declarations; Refer unresolved cases to the RDO’s Officer-of-the-Day or contact the taxpayer to inquire or verify the tax returns/forms/declarations information; and Forward the pre-processed original tax retumns/forms/ declarations with Batch Header Form and “apron sheets” to the RPS Data Encoder for data capture. BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 202 RECEIVED 152.2. 23 RPS Data Encoder 2. 2.2.2. 2.2.3 2.2.4, 22.5. Receive the original tax returns/forms/declarations from the RPS Pre-processing Data Controller; Encode the specific information as appearing in the tax retums/forms/declarations. Copy the data/amount from the “apron sheet” for any missing data in the tax returns/corrected values, if applicable; Retum to the RPS Preprocessing Data Controller the tax retums/forms/declarations that are not properly accomplished/ without “apron sheet” attached; Stamp/Write the word “ENCODED” on the upper right hand side of the Batch Header Form; and Forward the encoded original tax returns/forms/ declarations to the Document Custodian for temporary storage. Document Processor/Document Custodian 23.1. 2.3.2. 23.3. 2.3.4, 23.5. Receive the encoded original tax retumns/forms/ declarations from the RPS Data Encoder; Arrange and store temporarily for thirty (30) days the encoded tax return/form/declaration per DLN. The original tax retums/forms/ declarations shall remain in the custody of the Document Custodian until all suspended original tax retums/forms/ declarations in the batch are resolved; Update the documents status, using the Document Tracking Module (DTM) of the Case Monitoring System (CMS); Retrieve the original tax return/form/declaration needed by other sections upon presentation of the duly approved request form. ‘Update the document status by entering the borrower’s name and the date the document was borrowed into the DTM. Update this again once the document has been returned by entering the return date; Return to the RPS Data Encoder the batched tax retumns/forms/ declarations without the word “ENCODED” on the Batch Header Form for encoding; and pupeaty QP INTERNAL. REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED2.3.6. Prepare the transmittal letter and forward the original copies of the tax return/form/declaration together with the transmittal letter to the Administrative Division of the Regional Office after thirty (30) days from receipt of the encoded tax retumns/forms/declarations in the batch still with the CBR/RPS Error handler for suspense resolution. The other tax retums/forms/declarations on the same Batch Header Form will not be transmitted to the Administrative Division unless all the returns in the batch are complete. 24, RPS Error Handler (For Tax Return/Form/Declaration Information) 24.1. Receive the Return Suspense Report from RDC; and 2.4.2. Resolve suspended return transactions; request for a copy of the return/form/declaration from the Document Custodian, if necessary. Preparation of the Monthly Collection Report ‘The RDO shall: ik Receive the system-generated collection report from the RDC not later than the 10" day of the following month; Validate the collection data and, in case of discrepancy, make the necessary adjustment and request for data-fix, in accordance with the existing rules and policies; and Submit the validated BIR Form No. 12.09 in electronic copy to the Collection Division of the Regional Office and the Statistics Division (through the email account of the Chief) not later than the 15" working day from the end of each ‘month. This report must tally with the report forwarded to the RAD. To ensure veracity and accountability, the BIR Form No. 12.09 report must be sent through the official email account of the RDO. The Regional Collection Division shall: 1 2. Receive the validated BIR Form No. 12.09 from the RDOs; Review and consolidate the BIR Form No. 12.09 collection reports; and Transmit to the Statistics Division the consolidated BIR Form No. 12.09 (Annex 100-1.8) submitted by the RDOs not later than the 20" day of the following month, ‘BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 7CM 101.3. MONITORING OF PERFORMANCE OF AABs [Refer to FC 101.3] ‘The performance of the AAB as a collection agent of the BIR. is evaluated regularly, in accordance with existing regulations and in compliance with the terms and conditions of the tripartite MOA among the AAB, BIR and BTr, the significant provisions of which are shown in Annex 100-2 hereof. The Large Taxpayer Document Processing and Quality Assurance Division (LTDPQAD)/Large Taxpayer District Office (LTDOYRDO, through the LTS and the Regional Collection Division, shall: 1. Prepare and submit to the CPD the accomplished BIR Form No, 28.41 together with the LBDE Exception Reports, List of Late Batches, and the Report on Frequently Erring Banks not later than the twenty-eight (28" day of the following month; and 2. Inform RAD of AAB violations, more particularly on the remittance of tax collections to BTr, if any. The RAD shall: 1. Receive reconciliation queries from the LTDPQAD/LTDO/RDO on AAB discrepancies, more particularly on remittances; 2. Validate the remittance violations of AAB-HO, as reported by the LTDPQAD/LTDO/RDO; 3. Reconcile the collection reports reflected in BCS-A against the information in the CRDC to determine possibility of late reporting/ remittance of collections by AABSs that were not reported to RAD by the LTDPQAD /LTDO/RDO; 4. Compute the applicable penalties for late reporting and remittance of collections by ABs, if any; 5. Send Notification Letter to the AAB signed by the Assistant Commissioner- Collection Service (ACIR-CS) for late reporting and remittance of collection within ten (10) days upon discovery of the violation; 6. Issue Demand Letter to AAB, if the request for waiver of penalties was denied by the Management Committee (MANCOM), upon recommendation by the Bank Accreditation Committee (BAC), or if the AAB did not respond within ten (10) days from receipt of the Notification Letter; BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 18 RECEIVED7. Prepare a letter/communication, for signature by the ACIR-CS, informing the AAB of the approval/denial of its request for waiver or cancellation of penalties for committed violations; 8. Prepare Payment Order (PO), in duplicate copies, for signature of the Chief of RAD, upon presentation of the demand letter and the payment for the penalties of the AAB; 9. Forward the copies of the PO, to the General Services Division (GSD) for the issuance of Official Receipt (OR) for AAB’s payment of penalties imposed on violations committed; and 10. Receive from the concemed AAB the photocopy of the OR issued by GSD and manually tag the same in the case docket as proof of settlement of the assessed penalties against the AAB. The CPD shall: 1. Receive, analyze and evaluate the BIR Form No. 28.41, Exception Reports, and the List of Late Batches received from the LTDPQAD/LTDO/RDO; 2. Prepare and send Notification Letter signed by the ACIR-CS to the concemed AAB-HO for late submissior/transmission of collection report/data, and procedural/encoding errors committed by the concerned AAB branch within 30 days from receipt of the exception and discrepancy reports; 3. Receive, analyze and evaluate AAB’s response to the issued Notification Letter and prepare communication to the LTDPQAD/ LTDO/RDO for validation of the AAB's explanation on late submission/transmission of collection report/data and procedural/ encoding errors; 4. Elevate to the BAC all the requests for waiver of penalties from AABs for evaluation and recommendation; 5. Compute the penalties for late submission/transmission of collection reports/data and procedural/encoding errors, in accordance with the Schedule of Penalties embodied in Annex A-2 of RR No. 2-2008;"" 6. Issue Demand Letter to AB, if the request for waiver of penalties was denied by the MANCOM, upon recommendation by the BAC, or if the AAB did not respond within (fifteen)15 days from receipt of the Notification Letter; WUREAU OF INTERNAL REVENUE aeons MGT. DIVISION "Annex 10-2 ofthis Chapter -Schodul of Penal. Dec 28 20 RECEIVED 197. Prepare a letter/communication, for signature by the ACIR-CS, informing the AAB of the approval/denial of its request for waiver or cancellation of penalties for committed violations; 8. Cancel the penalty assessment in the AB Ledger, if the request for waiver of penalties is approved by the MANCOM; 9. Prepare the Payment Order (PO) in duplicate copies, for signature of the Chiefs of CPD and RAD, upon presentation of the demand letter and the payment for the penalties of the AAB; 10. Forward the copies of the PO to the General Services Division (GSD) for the issuance of Official Receipt (OR) for AAB’s payment of penalties imposed on violations committed; 11. Receive from the concerned AAB the photocopy of the OR issued by GSD and ‘manually tag the same in the case docket as proof of settlement of the assessed penalties against the AAB; 12. Post the payment of penalties by the AB to the AAB Ledger maintained by the CPD; and 13. Act on issues and concems of AABs relative to the imposition of penalties, as recommended by the BAC and/or as decided by MANCOM. The AAB-HO shall: 1. Receive Notification Letter/Demand Letter from the CPD/RAD on violations committed; 2. Prepare and send reply/request for waiver, at its option, to the BIR’s notice of violations committed within fifteen (15) days from receipt of such notification letter; 3. Pay the penalties demanded by the BIR within thirty (30) days upon receipt of the Demand Letter; and 4, Provide CPD/RAD with photocopy of the OR issued by GSD as proof of payment for the demanded penalties. ‘The General Service Division (GSD) shall: 1. Accept payment of penalties from AABs on late reporting and remittance, violations on late submissiontransmission of collection reports/data, and procedural/ encoding errors; BUREAU OF INTERNAL REVENUF. RECORDS MGT. DIVISION DEC 28 2012 20 RECEIVED7. Prepare a letter/communication, for signature by the ACIR-CS, informing the AAB of the approval/denial of its request for waiver or cancellation of penalties for committed violations; 8. Cancel the penalty assessment in the AAB Ledger, if the request for waiver of penalties is approved by the MANCOM; 9. Prepare the Payment Order (PO) in duplicate copies, for signature of the Chiefs of CPD and RAD, upon presentation of the demand letter and the payment for the penalties of the AAB; 10. Forward the copies of the PO to the General Services Division (GSD) for the issuance of Official Receipt (OR) for AAB’s payment of penalties imposed on violations committed; 11. Receive from the concerned AAB the photocopy of the OR issued by GSD and manually tag the same in the case docket as proof of settlement of the assessed penalties against the AAB; 12. Post the payment of penalties by the AB to the AAB Ledger maintained by the CPD; and 13. Act on issues and concems of ABs relative to the imposition of penalties, as recommended by the BAC and/or as decided by MANCOM. The AAB-HO shall: 1. Receive Notification Letter/Demand Letter from the CPD/RAD on violations committed; 2. Prepare and send reply/request for waiver, at its option, to the BIR’s notice of violations committed within fifteen (15) days from receipt of such notification letter; 3. Pay the penalties demanded by the BIR within thirty (30) days upon receipt of the ‘Demand Letter; and 4, Provide CPD/RAD with photocopy of the OR issued by GSD as proof of payment for the demanded penalties. The General Service Division (GSD) shall: 1. Accept payment of penalties from AABs on late reporting and remittance, violations on late submissiontransmission of collection reports/data, and procedural/ encoding errors; BUREAU OF INTERNAL REVENUE, RECORDS MGT. DIVISION DEC 28 2012 20 RECEIVED2, Issue OR to evidence receipt of payment from AABs on assessed penalties for violations committed; 3. Deposit to the Authorized Government Depository Bank (AGDB), for the account of the Treasurer of the Philippines, the amount collected from AABs not later than the day immediately following the date of actual collection; and 4. Prepare and submit to RAD and BTr the Monthly Report of Collections and Deposits. The Bank Accreditation Committee (BAC) shall: 1. Deliberate on the issues and concerns elevated by the BAC Secretariat headed by the Chief, CPD; 2. Evaluate and recommend appropriate action on the issues and concerns raised to the Committee; 3. Elevate to MANCOM, for approval, the BAC’s recommended action on the AAB's request for waiver of penalties, if any; and 4, Inform the CPD on the action taken by MANCOM, for appropriate action, The MANCOM shall: 1. Deliberate on the issues and concems elevated by the BAC; and 2. Approve/Disapprove the recommendations by the BAC. (M1014 REPORTING AND HANDLING RETURNED/ DISHONORED CHECKS [Refer to FC 101.4] The procedures in receiving, processing, monitoring and collecting returned/dishonored checks received are provided for under RMO No. 25-2001 and Bank Bulletin No. 2010- 23. Dishonored checks received by the AABs shall be submitted to the RDO having jurisdiction over the receiving AAB branch and to the LTS/LTDO, as the case may be. Penalties shall be imposed on the ABs for receiving checks which were dishonored due to the following reasons: (1) accommodation check; (2) stale check; (3) post-dated check; (4) unsigned check; and (5) out-of-town check. Checks which were dishonored due to “Account Closed” shall be forwarded to the Legal Division of the Regional Office or to the Legal Service of the National Office (for large and excise taxpayers) for filing of a court case against the taxpayer for violation of Batas Pambansa (B.P.) Blg. 22 (Anti- Bouncing Check Law). The corresponding tax return/form/declaration and other BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 21attachments or case docket should be immediately forwarded to the Collection Group for collection enforcement. ‘The AAB branch shall: 1. Prepare the Report of Retumed/Dishonored Checks (BIR Form No. 12.58) (Annex 100-1.9) _in five (5) copies to be distributed to the following offices: original copy to RAD; duplicate copy to BTr; triplicate copy to AAB Head Office; quadruplicate copy to RDO/LTCED/LTDO; and quintuplicate copy for the AAB branch file copy; 2. Submit to the RDO/LTCED/LTDO the quadruplicate copy of BIR Form No. 12.58, together with the original check, within fifteen (15) days from the date of receipt of the retumed/dishonored check. Require the RDO to acknowledge in writing the receipt of their copy of BIR Form No. 12.58 on the four other copies of the said report; 3. Submit immediately the duly acknowledged original, duplicate and triplicate copies of BIR Form No. 12.58 to the AAB-HO; and 4, File the quintuplicate copy of the report for future reference. ‘The AAB-HO shall: 1. Receive the duly acknowledged copies of BIR Form No. 12.58 from the AAB branch; 2. Deduct from total remittance the amount of dishonored checks reported by the branches based on BIR Form No. 12.58 duly acknowledged by the RDO/LTCED/LTDO; 3. Attach the copies of the duly acknowledged BIR Form No. 12.58 to the CRDC as. follows: original copy of CRDC to the RAD; duplicate copy of the CRDC to the BTr, and retain the triplicate copy thereof for file; and 4. Submit the CRDCs, together with the duly acknowledged copies of BIR Form No. 12.58, to the RAD and to the BTr. ‘The RAD shall: 1. Receive from AAB-HO the CRDC, together with the duly acknowledged original copy of BIR Form No. 12.58; 2. Prepare listing of all dishonored checks received and deducted from the bank's remittances and record the same in the Bureau’s books of accounts; ‘BUREAU OF INTERNAL REVENUE RECORDS MGT. NIVISION DEC 28 202 2 RECEIVED3. Receive the Monthly List of Dishonored Checks Received (Annex 100-1.10) submitted by the RDOs/LTCED/LTDO. Compare the dishonored checks as appearing in BIR Form No. 12.58 attached to the CRDC against the Monthly List of Dishonored checks received from the RDOs/LTCED/LTDOs; 4. Receive from the RDO/LTCED/LTDO the Monthly List of Dishonored Checks ‘Redeemed (BIR Form No. 12.61) (Annex 100-1.11); 5. Validate if the redeemed checks reflected in the BIR Form No. 12.61 were included in the reported dishonored checks reflected in the Monthly List of Dishonored Checks Received. Coordinate with the concemed office (RDO/LTCED/LTDO) for noted discrepancy, if any; 6. Record the redemption of dishonored checks in the Bureau’s books of accounts; 7. Compute the corresponding penalties (Annex 100-1.12) to be imposed against the AABs for acceptance of accommodation check, stale check, postdated check, unsigned check, and out-of-town check as payment of any tax liability from taxpayers; 8. Send Notification Letter to the concemed AAB, signed by the ACIR-CS for acceptance of check payments that were subsequently dishonored by the drawee- bank; 9. Issue Demand Letter to AAB, if the request for waiver of penalties was denied by the MANCOM upon recommendation by the BAC, or if the AAB did not respond within ten (10) days from receipt of the Notification Letter; 10, Prepare a letter/communication, for signature of the ACIR-CS, informing the AAB of the approval/denial of its request for waiver or cancellation of penalties for committed violations, 11, Prepare PO, in duplicate copies for signature of the Chief of RAD, upon presentation of the demand letter and the payment for the penalties of the AAB; 12. Forward to the GSD the copies of the PO for the issuance of Official Receipt (OR) for AAB’s payment of penalties imposed on violations committed; and 13. Receive from the concerned AAB the photocopy of the OR issued by GSD and manually tag the same in the case docket as proof of settlement of the assessed penalties against the AB. SUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 23‘The RDO/LTCED/LTDO shall: 1. Receive from the AAB branch the copies of BIR Form No. 12.58 together with the original dishonored checks; 2. Check the correctness and completeness of all items reported in the BIR Form No. 12.58 against the original checks; 3. Fill up completely the acknowledgement portion in BIR Form No. 12.58 and have it signed by the RDO/LTCED/LTDO Chiefs; 4, Retum the other copies of the report (3 copies, if the AB branch is serving large taxpayers, and 4 copies, if the AB branch is servicing non-large taxpayers) to the AAB branch’s representative and retain the RDO/LTCED/LTDO copy of the report for file and future reference; 5. Enter/Encode the dishonored check data into the CBR-ITS under RDO-based encoding (CBR Dishonored Check ADD Screen); 6. Print the Notice of Dishonor, 7. Assign the dishonored check case to a case officer; 8. Send the Notice of Dishonor to the taxpayer; 9. Compute the corresponding penalties for late payment, if the taxpayer agrees to redeem the dishonored check, and issue a Payment Form in three (3) copies, specifying that only cash or cashier's/manager’s checks shall be accepted to redeem the dishonored check (Refer to CM 303.1 TP Pays tax liability in Full, ‘Chapter III of the Manual); 10, Issue a collection letter based on recomputed collectible amount to the taxpayer, if the taxpayer does not redeem the dishonored check. In case the taxpayer responds to the collection letter, refer to step 9 above; LL. Issue Warrant of Distraint and Levy and/or Garnishment /Notice of Tax Lien on ‘taxpayer, if the taxpayer did not respond to the collection letter/did not redeem the dishonored check (Refer to CM 304.1 Warrant of Distraint and Levy, Chapter III of the Manual); 12. Forward the dishonored check cases due to “Account Closed /Insufficient Fund Account” to the Legal Division, thru the Collection Division of the Regional Office, for regular taxpayers under the RDO; or to the Legal Service thru the Prosecution Division, for large taxpayers under the LTS/LTDO; SUREAU OF INTERNAL REVENUE BRE RS MGT SIVISION DEC 28 2012 24 RECEIVED13, Prepare a progress/final report of action taken using the case notes facility of the Case Monitoring System (CMS); 14, Print and submit to the RAD a Monthly List of Dishonored Checks Received within 15 days of the following month and attach copies of the dishonored checks; 15. Print and submit to the RAD a Monthly List of Dishonored Checks Redeemed within 15 days of the following month, together with the photocopies of dishonored checks; 16. Prepare and submit to the ACIR-CS, copy furnished the ACIR-LTS/ Regional Director/Legal Service a Monthly Status Report of Dishonored Checks Received; and 17, Receive monthly progress report of dishonored check cases filed in court by the Legal Division/Prosecution Division. ‘The Revenue Data Center shall: 1. Upload the dishonored check data into the ITS database; and 2. Generate the necessary reports for dishonored check cases to be printed at the RDO/LTCED/LTDO level. ‘The Regional Collection Division/LTS shall: 1. Receive from the RDO/LTCED/LTDO the Monthly Status Report on Dishonored Checks Received; 2. Forward to the Regional Legal Division/Prosecution Division, NO the BIR Form No. 12.58 with original checks dishonored due to “Account Closed/Insufficient Fund Account” for filing of a case in court against the taxpayer; 3. Monitor the status of dishonored check cases filed in court by the Regional Legal Division/Prosecution Division, NO; and 4, Submit the validated RDO/LTCED/LTDO Monthly Status Report on Dishonored Checks to the Collection Service, thru the RAD. ‘The Regional Legal Division/Prosecution Division, NO shall: 1. Receive from the Regional Collection Division/ACIR-LTS copylies of BIR Form, 12.58, together with the original check/s; ‘BUREAU OF INTERNAL REVENUE RECORDS MGT PIVISION DEC 28 2012 RECEIVED 252. File a case in court against the taxpayer for violation of B.P. Blg. 22 (Anti- Bouncing Check Law); and 3. Prepare and submit to the ACIR-CS, copy furnished the RDO/LTCED/LTDO and the Regional Office/ACIR-LTS, a monthly progress report on dishonored check cases filed in court. ‘The Collection Service/LTS shall: 1, Receive from the Regional Collection Division/LTS the consolidated and validated RDO/LTCED/LTDO Monthly Status Reports on Dishonored Checks Received; 2. Receive from the Regional Legal Division/Prosecution Division NO, thru the Legal Service, the Monthly Status Report on Dishonored Check Cases filed in Court; and 3. Monitor the progress of resolutions/redemptions of dishonored checks received by the RDOs/LTCED/LTDOs and the Regional Legal Divisions’ Prosecution Division-Legal Service. (M102. PAYMENT THROUGH ELECTRONIC FILING AND PAYMENT SYSTEM (eFPS) The BIR adopted the Electronic Filing and Payment System (eFPS) pursuant to the provisions of the NIRC of 1997, as amended and in accordance with the requirements of the Electronic Commerce Act.'' The eFPS is developed primarily to provide the taxpayers with convenient service through faster processing and immediate confirmation of the filing of tax returns and payment of taxes. The system is an alternative mode of filing returns and payment of taxes which deviates from the. conventional manual process. It allows the eFPS-enrolled taxpayers to directly encode tax return information, submit the tax retums, and pay their taxes due online over the internet through the BIR website. DEFINITION OF TERMS For purposes of this Manual and in order to provide clarity and better understanding of the policies and procedures in the implementation thereof, the words and phrases herein provided are defined as follows: 1, Electronic Filing and Payment System (eFPS)- refers to the system developed and maintained by the Bureau of Intemal Revenue (BIR) for electronic filing of tax retums, including attachments, if any, and paying taxes due thereon specifically through the internet. "Section 244 of the NIRC of 1997, as amended, in relation to Section 27 of Republic Act No. 8792 or the “Flecronie Commerce, As BUREAU OF INTERNAL REVENUE RECORDS MCT ?TVISION DEC 28 2012 26 RECEIVED10. eFPS AAB- refers to a BIR - Authorized Agent Bank (AAB) that has passed the accreditation criteria for eFPS - AB such as being an intemet-bank, indorsed by the BTr for eFPS accreditation, and certified by the Information Systems Group (ISG) of the BIR that the AAB’s system is acceptable and compatible with the FPS of the BIR. eFiling — refers to the process of electronically filing tax returns/forms/declarations including attachments, if any, specifically through the internet. Payment — refers to the process of electronically paying a tax liability through the intemet banking facilities of AABs. Filing Reference Number - refers to the control number issued by the eFPS to acknowledge that a tax retumn/form/declaration, including attachments, has been successfully filed electronically. This shall serve as evidence of the fact of filing and the date of filing of the return. Confirmation Number - refers to the control number issued by the AAB to the taxpayer and the BIR to acknowledge that the taxpayer’s account has been successfully debited electronically in payment of his tax liability. Such Confirmation Number shall be considered as the equivalent of a bank validation and official receipt issued by the AAB and shall further serve as evidence of the fact of payment of the taxpayer's liability to the extent of the amount reflected in the Confirmation Number, and the date of payment by the taxpayer. Acknowledgment Number - refers to the control number issued by the BIR to the taxpayer to confirm that a tax payment has been credited to the account of the government or recognized as a revenue (internal revenue tax collection) by the Bureau of the Treasury. File Transfer Protocol (FTP) - a reliable end-to-end type of transport of files from sites connected through a network to facilitate transfer of files in the form of a tax file or binary integers. Large Taxpayer- refers to a taxpayer who has been classified and duly notified by the Commissioner of Internal Revenue (CIR) for having satisfied any or a combination of set criteria as prescribed in RR No.1-98 or any amendatory regulations. This includes all large taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) and Large Taxpayers District Offices (LTDOs). Non-Large Taxpayer- refers to a taxpayer whose tax payments and financial conditions do not satisfy the set criteria as per RR No.1-98 or any amendatory ‘BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 27regulations, and/or has not been classified and notified as a Large Taxpayer by the cR. 11, Due Date- refers to the date prescribed by law or regulations within which to file a particular return and pay the tax due thereon. 12. Electronic Signature- refers to the methodology or procedures prescribed by the BIR through the eFPS, employed by an individual taxpayer, or by an officer of a corporate taxpayer, who is required by the NIRC of 1997, as amended or appropriate regulations to affix his/her signature to such return, who files a return and pays taxes through cFPS, with the intention of authenticating, approving, attesting to the truth and correctness of the return, In the case of a corporate taxpayer, the electronic signature shall be deemed to be the signature singly, and collectively, of both the authorized corporate officer/s that are required by the NIRC of 1997, as amended or appropriate regulations to file and swear to the truth and correctness of such retum and who are certified as such officers by the corporate secretary in a document submitted to the BIR. 13. Paid-up Capital Stock - shall mean that portion of the authorized capital stock which has been both subscribed and paid. It also refers to the amount paid for the subscription of stock in a corporation, including the amount paid in excess of par value, net of treasury stock. 14, Complete Computerized System - refers to the books of accounts and other accounting records in electronic form, in accordance with RR No. 16-2006. Who May Avail of the eFPS Facility The eFPS is available to a taxpayer who is registered in the BIR ITS with an e-mail account and an intemet access. The taxpayer availing of ¢FPS facility enrolls online with the eFPS which is linked to the BIR website (http://www. bir.gov.ph). 7 Coverage The use of the eFPS is mandatory to the following:'? (i) large taxpayers pursuant to RR No. 22002; (ii) all government bidders pursuant to RR No. 3-2005; (iii) corporations with paid-up capital stock of Ten Million Pesos (Php 10,000.000.00) and above pursuant to RR No. 10-2007; (iv) corporations with complete computerized system pursuant to RR No.10-2007; (v) taxpayers belonging to the list of the Top 20,000 private corporations under Section 2.57.2 (M) of RR No. 2-98, as last amended by RR No. 14-2008, in relation to RR No. 5-2004; and (vi) taxpayers belonging to the Top 5,000 individual taxpayers pursuant to RR No. 6-2009, BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION ® RMC No. 6-200, DEC 28 2012 RECEIVED 28Other taxpayers mandated to use the eFPS include the stock brokers, insurance ‘companies as provided under RMC No. 71-2004, as well as enterprises enjoying fiscal incentives granted by other government agencies such as those registered with the (i) Philippine Economie Zone Authority; (ii) Board of Investments; (iii) various zone authorities covered under RA No. 9400; (iv) Cagayan Special Economic Zone Authority; (v) Export Authority; (vi) Tourism Infrastructure and Enterprise Zone Authority. '* Furthermore, users of the Electronic Documentary Stamp Tax (eDST) System are mandated to enroll under the BIR eFPS. Payment of DST under the eDST shall be made thru the eFPS or thru the eFTIS. Enrollment for System Usage Identified taxpayers required to file via the eFPS and/or volunteering taxpayers who would like to avail of the eFPS shall enroll online in the eFPS, in accordance with existing regulations, circulars and orders. A taxpayer that will e-pay shall enroll with any ‘eFPS AAB where he/she/it intends to pay through the bank debit system. However, large taxpayer's enrollment shall be limited only to the eFPS AABs authorized to serve them and who are capable to accept e-payments,'> Returns Covered by the Enrollment ‘A taxpayer enrolled with the eFPS shall file the applicable returns as specified in RR No. 9-2001, as amended by RR No. 2-2002 and RR No. 5-2004 (See Annex 100 -3 for the list of tax returns that may be filed with eFPS). Filing of Returns and Payment of the Tax The time of filing of some tax returns was provided in Section 7 of RR No. 9-2001, as amended by RR No.5-2004. Filing of returns thru eFPS under the different business industry classifications shall follow the guidelines under RR No. 26-2002. Following the “pay-as-you file” principle, the electronic payment of the tax due shall be made within the day the return is electronically filed. Where manual payment is allowed, payment shall also be made within the banking hours of the day when the tax relun/form/declaration was electronically filed. However, no penalty shall be imposed for taxpayers who e-filed earlier and paid at a later date but on or before the due date for the payment of the applicable tax.'® Payment of taxes electronically shall be done thru the bank debit system using the internet banking facilities of any eFPS AAB authorized to accept payment through the eFPS Facility. To ensure the security and integrity of the transaction, FPS AABs shall require taxpayers to enroll in their respective eFPS bank debit system using the bank's “ RRNo. 1-2010. "8 Sec, 4 of RR No. 9-2001, as amended by RR No. 2-2002, RR No. 9-2002 and RR No. 5- 2004 "© RMO No, 5-2002, as amended by RMO No.19-2002. ‘BUREAU OF INTERNAL REVENUE RECORDS MGT. NIVISION DEC 28 2012 RECEIVE 29 Ddinternet banking facilities. However, insurance companies and stock brokers are required to e-pay with any of the FPS AB chosen by the Insurance Commission (IC) and the Securities and Exchange Commission (SEC), respectively. For taxpayers intending to utilize Tax Credit Certificate (TCC) in payment of taxes, their retums shall have to be e-filed earlier than the due date to allow the BIR sufficient time to issue the requisite Tax Debit Memo (TDM) on or before the due date for payment of the applicable tax.'” Filing of the Audited Financial Statements/Certificate of Withholding Tax ‘Taxpayers availing of eFPS are required to submit all required attachments (e.g. audited financial statements, withholding tax certificates, TDM, etc.) to the applicable tax returns/declarations to the concemed RDO/Large Taxpayers Assistance Division (LTADYExcise Taxpayers Regulatory Division (ETRDY/LTDO where ithelshe is registered within fifteen (15) days from the date of filing of such tax returns/declarations. The required attachments must be with the printed copy of e-filed returns with its Filing Reference Number. For electronically submitted financial statements as attachments to the eFPS-filed Income Tax Returns (ITR), however, the same must first be converted to pdf file and winzipped before it is attached to the ITR. '"* Confirmation of Receipt of Returns /Documents and Payment of Taxes The reckoning date when the tax retumn/form/declaration and other attachments, as well as the payment of the tax due thereon, is deemed received by the BIR shall be as follows: 1. In case of e-filing and e-payment, the return is deemed filed, on the date appearing in, and after a Filing Reference Number is generated and issued to the taxpayer via the eFPS. The tax due thereon is deemed paid after a Confirmation ‘Number has been issued by the eFPS AAB to the taxpayer and the BIR. In addition, a Bank Acknowledgement Number shall be issued by the AAB to the BIR. to confirm that the tax payment has been credited to the account of the government or recognized as revenue (internal revenue tax collection) by the BTr. The receipt of the return occurs at the time it enters the FPS and shall be evidenced by the date indicated in the Filing Reference Number. 2. In case of e-filing and manual payment, the return is deemed filed on the date appearing in, and after a Filing Reference Number is issued to the taxpayer via the eFPS. The print-out of the Filing Reference Number shall be presented to the AAB for manual payment of the tax due thereon. The payment thereof is received upon validation of the document containing the Filing Reference Number "7 RMO No. 5-2002. ™ RR No. 9-2001 and RMO No. 10-2006. ™ Section 9 of RR No. 9-2001, as amended by RR No. 92002, and RMO No. 5-2002, as amended by RMO 19-2002. BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 30generated by the eFPS and the issuance of machine validated deposit slip by the AAB The presumptions relating to electronic signature shall be in accordance with the provisions of RR No. 9-201, as amended by RR No. 2-2002. M1021 PAYMENT THROUGH eFPS (TAXPAYER e-FILES AND e-PAYS) OM 102.1 discusses the acceptance, remittance and collection processes when an eFPS- enrolled taxpayer electronically files the retum and also electronically pays the tax liability. CM 1021.1 ACCEPTANCE AND REMITTANCE OF e-PAID TAX [Refer to FC 1021.1) The process of acceptance of tax payment made electronically consists of the acceptance of the e-paid tax by the FPS AB after a Confirmation Number has been issued to the taxpayer. Tax payments are then remitted by the AAB-HO to the BTr through the BSP and are recorded by the BTr. The BIR-RAD receives a daily report of collections from the AAB-HO through the eCRDC facility. Filing of Return/Declaration/Form/Attachments ‘The eFPS taxpayer shall: 1. Access eFPS button linked to BIR website at http://www.bir.gov.ph or hittps://my.bir. gov.ph 2. Click the “eFPS Login” to access eFPS login page; 3. Click “OK” when the Security Alert Message appears. (This is to inform the users that all data entered and transmitted will be secured and encrypted); 4, Supply the following information when the “eFPS login screen” appears and click “LOGIN’: - TIN = Username - Password; 5. Answer the challenge question displayed on the screen and click “SUBMIT”; ‘BUREAU OF INTERNAL REVENUE RECORDS MGT. VISION DEC 28 2012 RECEIVED 316. Click the drop down list of registered BIR Forms, once the login is successful, to select the tax form to be e-filed from the list; 7. Click “File Tax Return” after selecting the tax form from the list; 8. Choose from the option “On-line/Off-line” the preferred method (Access http:www.bir.gov.ph/info-eFPS for the detailed procedures in filling-out and submitting tax form in the eFPS); 9, Validate the return being filed and click ‘Submit” button to complete e-filing; 10, Wait for the generation of a Filing Reference Number. This means that the form has been successfully submitted thru eFPS; 11. Submit the attachments of retums with Filing Reference Number to LTS-LTRAD 1 to 3/LTEAD 1 and 2 /LTDO-Taxpayers Assistance Section (TAS)RDO- Collection Section (CS) within fifteen (15) days from the date of filing, if not submitted electronically; and 12. File the necessary request with the concemed LTS-LTAD V/ETRD/-LTDO- TAS/RDO-(CS), for ease in retrieval thereof, in case a copy of the retum is needed after the lapse of the retention period. e-Payment of the Tax Due ‘The taxpayer shall: 1. Click “Proceed to Payment” to perform e-payment after the generation of Filing Reference Number; and 2. Click check box and select the mode of payment (Fund Transfer/Tax Debit Memo). The eFPS AB shall: 1. Receive and process taxpayer’s payment instructions; and 2. Issue online confirmation number to the taxpayer after the account has been successfully debited electronically in payment of his tax liability. The AAB-Head Office (AAB-HO) shall: 1. Prepare the CRDC and transmit to the BTr; submit the same to RAD through the eCRDC facility; BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 322. Prepare the BSP Authority to Debit AAB-HO’s Demand Deposit Accounts (DDA) in favor of the BTr corresponding to the total daily collections for purposes of remitting the collection to the BTr thru the BSP. The remittance due date shall be based on the float period for eFPS transactions, as embodied in the written notification by the BIR; and 3. Send the said DDA to BSP, copy furnished RAD, to effect the remittance of the tax collections to the BTr. The BSP shall: 1. Debit the AAB-HO’s DDA corresponding to the tax collections and credit the collection to the “Special Account-BIR Collection” of the Treasurer of the Philippines (TOP); and 2. Prepare and submit daily thru email the BSP List of AAB remittances to BTr and the RAD. The BTr shall: 1. Prepare the JEV on tax collections from the AABs; 2. Record the remittance of tax collections in its books of accounts daily; and 3. Provide RAD with the copy of the JEV on recorded collections before the monthly closing of BTr’s books of accounts. ‘The RAD shall: 1. Receive the eCRDC from AAB-HO in Comma Separated Value (CSV) Format; 2. View the eCRDC validated file and export the Daily Summary Of Collections through AAB in excel format; 3. Print the Daily Summary of Collection and match the CRDC data with the information from the BSP Authority to Debit, BSP List of AAB Daily Remittances, and the BTr JEV; and 4. Prepare the BIR JEV and record the tax collections by the BIR in the eNGAS. CM 102.12 PAYMENT THROUGH eFPS (TAXPAYER eFILES AND e-PAYS) - COLLECTION REPORTING [Refer to FC 102.1.2] The process of reporting collections or payments of taxes through the eFPS starts with the transmission by the FPS AABs of confirmation and acknowledgement via auto emailed BUREAU OF INTERNAL REVENUE RECORDS MGT, DIVISION 33 DEC 28 202 RECEIVEDFTP files of the eFPS transactions, in coordination with the SOD-ISOS. The FTP payment files are then transmitted electronically by the eFPS AAB to the RDC for uploading to the CBR-ITS database. The analysis, validation and preparation of the collection report are done by the LTDPQAD/LTDO/RDO. The collections through eFPS are integrated with other tax collections in the consolidated monthly statistical report of revenue collections. The eFPS AAB shall: 1. Transmit electronically the Confirmation and Acknowledgement files to the BIR at the end of the day; 2. Verify the receipt of the following auto emails sent by BIR on a specified schedule: Acknowledgement of receipt of FTP files Notification of non-receipt of FTP files Notification of rejection of FTP files = Notification of no rejected FTP files 3. Coordinate with the System Operations Division-Information System and Operations Service (SOD-ISOS), if the abovementioned auto emails were not received; 4, Monitor the payment processing log of FTP files transmitted to the BIR in accordance with Bank Bulletin 2005-10; 5. Evaluate/Investigate the case of unsuccessful FTP file transmission. Notify the BIR Help Desk and request for assistance, if needed; 6. Transmit the FTP payment data to the RDC/ISOS-DC; and 7. Prepare and submit the Daily Collection Report (Annex 100-1.13) to the Large Taxpayers Document Processing and Quality Assurance (LTDPQAD) and the RDC/ISOS-DC. The RDC/ISOS-DC shall: 1. Receive the payment information transmitted by the eFPS AAB and upload the payment data to the CBR- ITS database; and ‘BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED 342. Generate the BIR Form No. 12.09 and forward to LTDPQAD/LTDO/ RDO for validation not later than the 10" day of the following month. The SOD-ISOS shall: 1. Verify auto e-mails sent; 2. Forward e-mail notifications not received by the eFPS AABs; 3. Coordinate closely with eFPS AAB until the e-mail notification is received; and 4. Coordinate with the network and systems administrator to resolve any technical issue. The System Maintenance and Support Division (SMSD) shall: 1. Generate monthly report of eFPS taxpayers who did not pay (whether electronically or manually over-the-counter) ; and 2. Forward the report to the LTDPQAD/LTDO/RDO, for necessary validation. The LTDPQAD/LTDO/RDO shall: On a daily basis- 1. Receive the Daily Collection Report from eFPS AAB; 2. Retrieve/view the electronic retums data for error resolution; and 3. Analyze and resolve errors which the data capture system has not successfully processed. On a monthly basis- 1. Reveive the monthly list of taxpayers who failed to pay and validate non- payment; 2. Secure proof of payment, if the tax is paid, prepare a report thereon, and send to SMSD for uploading; 3. Prepare and send a collection letter to the taxpayer, if the tax is unpaid; 4, Receive the system-generated BIR Form No. 12.09 from ISOS-DC/RDC net later than the 10 day of the following month; BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 202 35 RECEIVED5. Validate the collection data and, in case of discrepancy, make a request for data- fix in order to effect adjustment thereon ; and 6. Submit the duly validated BIR Form No. 12.09 not later than the 15" day of the following month to the Statistics Division and the Regional Collection Division/LTS. The Regional Collection Division/LTS shall: 1. Receive the validated BIR Form No. 12.09 from RDOs/LTDPQAD/LTDOs; 2. Review and consolidate BIR Form No. 12.09 collection reports; and 3. Submit consolidated BIR Form No. 12.09 to the Collection Service not later than the 20" day of the following month. (CM 102.2. PAYMENT THROUGH FPS (c-FILING OF TAX RETURN AND PAYMENT OF TAX DUE THRU OTC AND/OR MANUAL FILING AND PAYMENT OF eFPS TAXPAYERS) Manual filing and/or manual payment by eFPS taxpayer is allowed when a taxpayer is unable to e-file and/or e-pay due to the unavailability or limited capability of the eFPS, as announced by the Information Systems Group (ISG) of the BIR thru an official memorandum posted in the BIR website on the deadline date or the day before the tax deadline. The taxpayer who was not able to e-file is still required to lodge/file via eFPS the applicable tax return/form/declaration up to the step of getting the Filing Reference Number, within fifteen (15) days from the date of manual filing of the tax return/ form/declaration to ensure the submission of complete and accurate tax retum/form/ declaration data for uploading to the ITS. A taxpayer can manually file its/his/her retum/form/declaration and pay the tax due thereon thru the AAB’s “debit system” using the taxpayer’s account with any bank where the account is being maintained, even if the depository bank is an AAB of any/another RDO within the same Revenue Region, provided the return/form/ declaration reflects the correct RDO Code of the home RDO. BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION DEC 28 2012 RECEIVED ® RMC No. 33-2008 and RMC No.43-2008, 36CM102.2.1 e-FILING OF TAX RETURN/FORM/DECLARATION AND PAYMENT OF TAX DUE THRU OTC AND/OR MANUAL FILING AND PAYMENT OF eFPS TAXPAYERS ~ REMITTANCE [Refer to FC 102.2.1] The remittance process for the transactions of eFPS taxpayers who e-filed the returv/form/declaration but paid thr OTC and/ or manually filed their tax retuns/forms/declarations and paid OTC shall be in accordance with the procedures in the AAB-OTC transactions. The taxpayer shall: 1. Print three (3) copies of the system-generated Filing Reference Number Page, if the taxpayer was able to e-file or fill up a tax return/form/ declaration and deposit slip; 2. Present all the copies of the system-generated Filing Reference Number Page or manually filled-up tax return/form/declaration and deposit slip to the AAB branch for payment of tax due; 3. Pay the tax due over-the-counter of the AAB branch; and 4, Receive two copies of the validated Filing Reference Number Form Page, tax return/form/declaration and deposit slip from the bank as proof of payment. ‘The AAB Branch shall: 1. Receive three (3) copies of the system-generated Filing Reference Number Page, or the manually filled-up tax return/form/declaration and deposit slip from the eFPS taxpayer; 2. Accept the payment and machine-validate the Filing Reference Number Page or the manually filled-up tax return/form/declaration and deposit slip; 3. Process the tax payment in accordance with the procedures in the AAB-OTC transactions; and 4, Remit to the BTr, thru the BSP, the tax payment by the eFPS taxpayer who paid thru OTC transaction, in accordance with the procedures in the remittance of collections through AAB-OTC transactions. ‘The BIR-RAD shall record payments from eFPS taxpayers in the eNGAS likewise following the procedures indicated in the RAD portion in CM 101.1 AAB Over-the- Counter (OTC) Acceptance of Tax Payment and Remittance of the Manual. INTERNAL REVENUE Reconns MGT. RIVISION DEC 2 8 2012 37 RECEIVED