RR No. 18-2006: Prescribes the policies, procedures and guidelines in the implementation of the Improved Voluntary Assessment Program (IVAP) for Taxable Year 2005 and prior years under certain conditions

Key points

1. Coverage. IVAP covers all internal revenue taxes for taxable years ending December 31, 2005 and fiscal years ending not later than June 30, 2006, and all prior years, including one-time transactions. It may be availed of per taxable year and per tax type by any person, including estates and trusts.
2. Who is excluded. Excluded are those already issued a PAN or FAN, those under investigation from a Tax Informer’s verified information, and tax fraud cases pending in the DOJ or courts. Also excluded are those with admitted unpaid tax liability unless they first pay it, RATE Program cases, and Letter Notice cases where the sales or purchases discrepancy exceeds 30% of the base year.
3. Effect on audit. A taxpayer who availed of IVAP is not audited except with CIR approval when there is strong evidence of understatement of more than 30%. Audit is automatically suspended upon filing and payment, and LAs, ANs, LNs, TVNs and MOs are cancelled for availments with a Certificate of Qualification. Any IVAP payment is credited against deficiency tax if an audit is done.
4. Payment rules. IVAP payments cannot include any tax debit memo, creditable withholding tax, MCIT carry-over or income tax carry-over. They cannot be used as a tax credit or as a deduction for tax purposes, and availment is not an admission of erroneous payment or failure to file.
5. Installments and extension. If the IVAP amount is over P 5,000,000.00, it may be paid in 3 equal installments, all on or before November 29, 2006 unless the CIR extends. A missed installment makes the whole unpaid amount due or the application is denied. A written extension request on grounds of financial incapacity needs a bank list, a waiver of secrecy of bank deposits, an undertaking to pay within 6 months, and a bond if the case is prescribing within 6 months.
6. Review and appeal. Availments are reviewed within 30 days from application and payment, ending in a Certificate of Qualification or Notice of Disqualification. A Notice of Disqualification may be appealed to the Assessment Service, and the Program is valid until November 29, 2006, subject to CIR extension on meritorious grounds.

Who is affected

• Any person, natural or juridical, including estates and trusts, liable for internal revenue taxes for the covered periods

Deadlines and effectivity

• Covers taxable years ending December 31, 2005, fiscal years ending not later than June 30, 2006, and prior years
• Installments for amounts over P 5,000,000.00 due on or before November 29, 2006 unless extended
• Review within 30 days from application and payment
• Program valid until November 29, 2006, subject to CIR extension