RMO No. 42-2000: Prescribes the policies and procedures in the intensification of collection/settlement of delinquent accounts and disputed assessments through compromise settlement

Key points

1. Cases covered and excluded. Compromise covers delinquent accounts, cases under administrative protest in the listed offices, cases disputed in court, collection cases filed in courts, and criminal violations not yet filed in court or involving fraud. It does not cover withholding tax cases, criminal tax fraud cases, criminal violations already filed in court, assessments issued after June 30, 2000, or delinquent accounts with an approved installment schedule.
2. Offers accepted. National and Regional Offices may accept offers on all outstanding delinquent accounts and disputed assessments as of June 30, 2000, based on the minimum percentages in the Order. Cases with Warrants of Distraint and/or Levy and/or Warrants of Garnishment are also covered.
3. Minimum amounts. Accounts of taxpayers registered under the LTS and ETS cannot be compromised for less than 50% of the basic assessed tax. Assessments already sustained by any Court but not yet final may be compromised upon payment of 100% of the basic assessed tax. Cases with a final court decision can be compromised only on the ground of financial incapacity.
4. Grounds. Offers are accepted if there is reasonable doubt as to the validity of the claim. They are also accepted if the taxpayer’s financial position shows a clear inability to pay the assessed tax.
5. Approving bodies. The National Evaluation Board approves if the basic assessed tax exceeds P 1 million or the offer is below the minimum rates of 40% (doubtful validity), 10% (financial incapacity) and 50% (LTS and ETS taxpayers). The Regional Evaluation Board handles Regional Office assessments of P 500,000.00 or less. The Commissioner approves Regional Office assessments over P 500,000.00 but not over P 1,000,000.00, and National Office assessments not over P 1,000,000.00.
6. Deadline. The deadline for filing the application for compromise settlement is November 15, 2000.

Who is affected

• Taxpayers with delinquent accounts and disputed assessments
• Taxpayers registered under the LTS and ETS

Deadlines and effectivity

• Outstanding accounts and assessments as of June 30, 2000
• Application deadline: November 15, 2000