Summary
RMO No. 7-2010 sets the guidelines for handling Letter Notices (LNs) generated through the Tax Reconciliation System (TRS) and the RELIEF/TPM-BOC Data Program for 2008. They cover income, value-added, percentage and withholding taxes for taxable year 2008.
Key points
- Coverage and handling. The LNs cover individual and corporate taxpayers registered under the Large Taxpayers Service – Regular, Excise and Large Taxpayers District Offices (LTDOs) and Revenue Region Nos. 4 to 9. TRS-LNs for 2008 are consolidated with RELIEF-LNs and handled by the same investigating Revenue Officer, with the report sent to the Office of the Commissioner of Internal Revenue (OCIR), Attention: Overall Head LNTF.
- Response steps. A Follow-up Letter is served if the taxpayer does not respond within 5 days from receipt of the LN. A taxpayer who refutes the discrepancy has 10 days from receipt of the LN to reconcile records and submit proof.
- If the taxpayer does not settle. Without a response within 10 days of the Follow-up Letter, an issue-based Letter of Authority (LA) is recommended, served with a Notice for Informal Conference. If the liabilities are not settled within 5 days from receipt of those, the docket goes to the OCIR for a Preliminary/Final Assessment Notice under RR No. 12-99, a recommendation for suspension and temporary closure under RMO No. 3-2009 (Oplan Kandado) if the under-declaration is 30% or more, or a Subpoena Duces Tecum. Failure to comply with the subpoena is endorsed for a criminal case under Section 266 of the NIRC of 1997, as amended.
- 30 and 60 day rule. Investigating offices resolve LN discrepancies within 30 days from receipt of an assignment. The LNTF resolves those it handles within 60 days. Unresolved cases are referred to the other office for takeover, and Revenue Officers who miss the periods are listed for a show cause order from the Inspection Service.
- Unlocated taxpayers. LNs that cannot be served are sent by registered mail to the office address in the LN. If returned, the LNTF may recommend cancelling the registration, and the list of unlocated taxpayers is published in two (2) newspapers of general circulation. Unless purchasers give the current business address to the BIR, their purchases from these taxpayers are not allowed as income tax deductions, and the input taxes are disallowed for VAT.
- Payment and other rules. A taxpayer who pays the deficiency taxes within 30 days from receipt of the LN gets abatement of interests and penalties. Installment payment is allowed where liabilities exceed P 500,000.00, and a taxpayer is disqualified from amending the return for the period covered by the LN once it is issued, per RMC No. 40-2003.
Who is affected
- Individual and corporate taxpayers registered under the Large Taxpayers Service and Revenue Region Nos. 4 to 9
- Revenue Officers handling Letter Notices
Deadlines and effectivity
- Taxable year 2008
- Follow-up Letter if no response after 5 days from receipt of LN
- Reconciliation within 10 days from receipt of LN
- Abatement if paid within 30 days from receipt of LN
- Investigating office 30 days, LNTF 60 days to resolve
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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