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RMO No. 22-2001: Prescribes the guidelines and procedures in the exercise of the power of the Commissioner of Internal Revenue to compromise taxes

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Summary

RMO No. 22-2001 sets the guidelines and procedures for evaluating, processing and accepting offers of compromise settlement of delinquent accounts and disputed assessments, including those already filed in court.

Key points

  1. Bank secrecy waiver. No offer on the ground of financial incapacity is considered until the taxpayer waives in writing his privilege of secrecy of bank deposits. The waiver authorizes the Commissioner to inquire into the taxpayer’s bank deposits.
  2. Doubtful validity. A taxpayer who has signified written conformity to an assessment adjusted after reconsideration/reinvestigation can no longer request compromise on doubtful validity. If he still disagrees, the offer is decided case by case and never below the minimum rates set by law. A doubtful-validity offer of less than 40% of the basic assessed tax must state compelling or strong reasons and be approved by the National Evaluation Board (NEB), and assessments confirmed by a lower court but appealed cannot be compromised on this ground.
  3. NEB authority. The NEB approves offers below the prescribed minimum rates. It also approves offers on delinquent accounts, disputed cases and minor or major criminal violations (other than criminal tax fraud cases filed in courts) of National Office taxpayers, and cases where basic assessed tax per tax type exceeds P 500,000.00.
  4. Regional Evaluation Board authority. The Regional Evaluation Board approves compromise of deficiency assessments issued by Regional Offices with basic assessed tax of P 500,000.00 or less per tax type. It also approves minor criminal violations discovered by the Regional Office/Revenue District Office.
  5. Other rules. The minimum percentages also apply to settlements consisting only of increments such as surcharge and interest, based on total amount assessed. Tax Credit Certificates and Tax Debit Memos cannot be used as payment, and offers are evaluated per tax type.

Who is affected

  • Taxpayers with delinquent accounts or disputed assessments, including those filed in court

Deadlines and effectivity

  • Application deadline: on or before November 15, 2001

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

Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.