RMO No. 11-2014: Prescribes the policies, guidelines and procedures in the periodic clean-up of Accounts Receivable/ Delinquent Accounts

Summary

RMO No. 11-2014 prescribes the policies, guidelines and procedures for the periodic clean-up of the BIR’s Accounts Receivable/Delinquent Accounts (ARs/DAs).

Key points

1. Purpose and records. The clean-up establishes the correct inventory and details of ARs/DAs and updates their status in the Accounts Receivable Management System and other files. Offices physically count AR/DA dockets within 30 days from effectivity, keep an AR/DA History Sheet (AHS) in each docket, and classify cases using alpha numeric codes.
2. Collectibility and prescription. Potentially collectible ARs/DAs are scored for collectibility using a point-system. Whether collection has prescribed follows the Order’s guidelines on the 5-year prescriptive period.
3. Suspense AR/DA. A Suspense AR/DA is merely reclassified from active to inactive, still accrues delinquency interests and penalties, and can be reactivated at any time. It requires verification that the taxpayer lacks sufficient assets, a basis of financial hardship and not mere inconvenience, documentary evidence, and prior approval of the Head of Office. Only cases with Warrants of Distraint and/or Levy duly served and executed, with no leviable or distrainable property found, are eligible, and the masterlist is evaluated quarterly.
4. Write-off. Write-offs due to prescription are handled by a Committee on Prescribed Cases, which also initiates administrative sanctions against officials responsible for the prescription. Other write-offs are decided by the Commissioner on the recommendation of the Technical Working Committee on Abatement, after preliminary evaluation by the Large Taxpayers Service Evaluation Board or Regional Evaluation Board.
5. Supporting documents and inventory. Cases recommended for write-off or suspense need a completed checklist and the documents listed in the Order. Cases awaiting write-off approval stay in the AR/DA Inventory/General Control Ledger until the recommendation and the Authority to Cancel Assessment (ATCA) are approved.
6. Closed cases. Cases that are fully settled with penalties, have approved penalty abatement or compromise settlement, or have an approved write-off with a duly issued ATCA, if applicable, go to the Records Division and or Administrative Division for safekeeping.

Who is affected

• BIR offices handling AR/DA cases

Deadlines and effectivity

• Physical count of AR/DA dockets within 30 days from effectivity
• Suspense masterlist evaluated quarterly
• Issued February 13, 2014

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