RMO No. 31-2002: Prescribes the policies, guidelines and procedures in the institution of closure proceedings and the filing of criminal action against taxpayers who have not responded to the Letter Notices sent by BIR under the RELIEF System

Key points

1. Actions for failure to avail of VAAP. If a taxpayer fails or refuses to avail of the Voluntary Assessment and Abatement Program within the period in the Letter Notice, the BIR institutes criminal and/or administrative actions allowed by the Tax Code. These are closure, criminal action, or audit and investigation, depending on the extent of underdeclaration.
2. Closure power. The Commissioner of Internal Revenue may suspend a taxpayer’s business operations if taxable sales or receipts are underdeclared by thirty percent (30%) or more.
3. 5-Day VAT Compliance Notice. The Revenue District Office with jurisdiction issues the notice, signed by the Regional Director.
4. Closure Order. If the taxpayer does not respond to the notice, the RDO prepares a Closure Order. The Chief of the Legal Division recommends it for final approval by the Regional Director.
5. Lifting Order. Only the Regional Director issues a Lifting Order, and only if the conditions stated in the Order are met.

Who is affected

• Taxpayers who did not respond to Letter Notices under the RELIEF System

Deadlines and effectivity

• 5-Day VAT Compliance Notice