RMO No. 04-2008: Provides supplemental provisions on RMO No. 28-2007 relative to the collection of deficiency taxes uncovered through computerized data matching and reflected in the issued Tax Reconciliation System-Letter Notices

Summary

RMO No. 4-2008 supplements RMO No. 28-2007 on collecting deficiency taxes found through computerized data matching and reflected in Tax Reconciliation System-Letter Notices (TRS-LN) for taxable year 2005 in the revenue regions.

Key points

1. Listing for issue-based audit. The Collection Service, through the Withholding Tax Division, lists taxpayers whose TRS-LN got no response after 15 days from receipt. The list is made monthly, not later than the 10th of the following month, with details such as name, TIN, RDO, discrepancy amount, tax type, covered period and delivery date.
2. Assessment timeline. The Revenue Officer issues a Notice for Informal Conference after 5 days from the taxpayer’s receipt of the Letter of Authority. A PAN is issued if there is no response 15 days after that notice, and a FAN if there is no response 30 days after the PAN.
3. Unpaid FANs. The Collection Service lists taxpayers who did not settle within 30 days from receipt of the FAN. A timely protest on the FAN is resolved first before any administrative or judicial action or sanction.
4. Referral for prosecution. The list goes to the Office of the Commissioner through the Deputy Commissioner for Operations, which selects cases for the Legal and Inspection Group. The National Investigation Division then documents the cases for the Run After Tax Evaders (RATE) Program and refers them to the Prosecution Division of the Legal Service or the RATE Team, with a monthly report to the Commissioner.

Who is affected

• Taxpayers under the revenue regions issued TRS-LN for taxable year 2005

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.