RMO No. 20-2007: Prescribes the policies for simplified processing of application to avail taxpayer’s remedies, compromise settlement and abatement

Summary

RMO No. 20-2007 prescribes policies for simplified processing of applications for taxpayer’s remedies, compromise settlement and abatement under Sections 204 (A) and 204 (B) of the Tax Code.

Key points

1. What abatement covers. The BIR processes abatement applications only for surcharges, interests and compromise penalties. Applications to abate the basic tax or any part of it are not covered by existing regulations and are not processed.
2. Processing of abatement. The RDO or Large Taxpayers Service investigating office evaluates the application and sends a recommendation to the Technical Working Committee. The TWC prepares the final recommendation for the Commissioner. No application is initially processed without payment of 100% of the basic tax.
3. Who approves compromise settlements. The Regional Evaluation Board handles regional cases with basic tax of P 500,000 or less and delegated minor criminal violations. The National Evaluation Board handles cases where basic tax exceeds P 1,000,000 or the offer is below the minimum (10% for financial incapacity; 40% for doubtful validity). The CIR handles other cases not delegated and those entrusted to him by law.
4. Processing of compromise. The originating investigating office must process, evaluate and recommend before forwarding to the Technical Working Groups, which prepare the final recommendation. Applicants must pay the basic tax (abatement) or the offer of compromise (compromise settlement) upon filing.
5. If disapproved. Payments already made are treated as partial or installment payments of the assessments.

Who is affected

• Taxpayer-applicants for abatement or compromise settlement

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