RMO No. 42-2010: Prohibits the issuance of Temporary Restraining Orders on the collection of taxes against the BIR by courts other than the Court of Tax Appeals, the issuance of warrants of distraint and garnishment, and/or levy on final decisions of the BIR on disputed assessments, cases filed before the Court of Tax Appeals, and the sale of property distrained and garnished

Key points

1. Only the CTA may enjoin collection. Under Section 218 of the NIRC, as amended, no court except the CTA may grant an injunction restraining collection of any national internal revenue tax, fee or charge.
2. Appeal does not suspend collection. Under Section 11 of Republic Act No. 1125, an appeal to the CTA from a BIR decision on a disputed assessment does not suspend payment, levy, distraint or sale of the taxpayer’s property, unless the CTA suspends collection under certain conditions.
3. Notice of Tax Lien. When deemed proper, the BIR or its authorized agent may issue a Notice of Tax Lien under Section 219 of the 1997 NIRC.
4. Action on improper TROs. TROs or injunctions from courts other than the CTA contrary to these provisions are to be annulled for lack of jurisdiction. BIR legal officers take the legal remedy and file an administrative case against the erring judge when circumstances warrant.
5. Warrants after final decision. After the final decision on the disputed assessment, or the filing of a Petition for Review before the CTA of its decision upholding the assessment, Warrants of Distraint and Garnishment and/or Levy are issued and served under Revenue Memorandum Order No. 39-2007.
6. Constructive distraint. Section 26 of the NIRC allows constructive distraint on property of a delinquent taxpayer, or one who is retiring from business, leaving the Philippines, removing or hiding property, or acting to obstruct tax collection.

Who is affected

• BIR legal officers
• Delinquent taxpayers and taxpayers with disputed assessments