RMO No. 20-2002: Amends pertinent provisions of RMO No. 57-2000 relative to the confrontational requirements, execution and enforcement of closure orders, as well as the duration and the lifting thereof

Summary

RMO No. 20-2002 amends pertinent provisions of RMO No. 57-2000 on confrontational requirements, the execution and enforcement of closure orders, and their duration and lifting.

Key points

1. Who conducts surveillance. If the basis is information from internal Bureau sources, the Revenue District Office (RDO), LTAID I, LTAID II or the Large Taxpayers District Office (LTDO) conducts it for taxpayers under their jurisdiction. If the basis is a confidential information from an informer or other external sources, the Tax Fraud Division conducts it. The DCIR-LIG, in consultation with the DCIR-Operations Group, may refer the case to the Special Investigation Division or RDO/LTDO.
2. Review Board. The handling Revenue Officer’s report is concurred in by the head of the investigating office. The Review Board, composed of the BIR officials specified in the Order, reviews the findings and acts within seven (7) days from receipt.
3. Explanation and 10-day VAT Compliance Notice. If the Review Board approves the report, the taxpayer must explain under oath within forty eight (48) hours why it should not face suspension of business or temporary closure and/or criminal action. If a 10-day VAT Compliance Notice is recommended, the taxpayer may refute within five (5) days from receipt, and the originating office responds within five (5) days. A protest suspends the running 10-day period until the taxpayer receives the resolution.
4. Closure Order. If the taxpayer fails to comply or to refute the findings, the Review Board recommends closure for approval of the DCIR-LIG. The Closure Order is served with the report showing the computed tentative amount of underdeclaration. Implementation stops if the taxpayer corrects the violation under Section IV of the Order.
5. Lifting the Closure Order. A written lifting order is served immediately upon rectification, without prejudice to audit if warranted. Rectification means complying with registration requirements if the failure was to register, filing unfiled VAT returns and paying the taxes due, and amending previously filed VAT returns to show the correct taxable sales/receipts.

Who is affected

• Taxpayers under surveillance and closure proceedings for VAT violations

Deadlines and effectivity

• Review Board action: within seven (7) days from receipt of the report
• Sworn explanation: within forty eight (48) hours
• Refutation of the 10-day VAT Compliance Notice: within five (5) days from receipt

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