RMO No. 67-99: Prescribes the 1999 policies, guidelines and procedures in the audit of tax cases by Revenue District Offices

Key points

1. Coverage. The program covers investigation of 1998 internal revenue tax returns by Revenue District Offices. This includes income tax returns of fiscal-period taxpayers whose taxable years ended any day from June 1, 1998 to July 31, 1999.
2. Older years. Audits of 1997 and prior years will not be started after August 17, 1999. The exceptions are claims for tax credit/refund, Estate/Donors’ Tax within the audit threshold, and requests for tax clearance due to retirement of business.
3. Mandatory audit: estate, retiring and stock cases. These include Estate/Donor’s Tax returns with a gross estate/gift above P 5 Million and taxpayers retiring from business regardless of amount. They also include transfers of property for shares, and sales or exchanges of unlisted stocks, where the zonal value of the property or book value of the stocks exceeds P 10 Million.
4. Mandatory audit: refund and credit claims. Individual claims from business income or practice of profession are included where the claim exceeds P 20,000 and gross sales/receipts exceed P 5 Million. Corporate claims are included, except taxpayers under investigation by the Tax Fraud Division or other National Office teams, whose claims are consolidated with the package audit. Claims from withholding tax on purchases by the top 5,000 taxpayers under RR No. 2-98 and other claims, including VAT, are included where they exceed P 100,000, subject to Section II.A.4 of the Order.
5. Mandatory audit: selected taxpayers. Taxpayers selected for audit based on third party information, or on the results of the tax mapping program, are also included.

Who is affected

• Taxpayers audited by Revenue District Offices
• Fiscal-period taxpayers with taxable years ended June 1, 1998 to July 31, 1999

Deadlines and effectivity

• Issued August 23, 1999
• No new audits of 1997 and prior years after August 17, 1999, with exceptions