RMO No. 24-2008: Provides the policies and guidelines for the development, investigation and prosecution of cases under the Run After Tax Evaders Program of the BIR

Summary

RMO No. 24-2008 provides the policies and guidelines for developing, investigating and prosecuting cases under the BIR’s Run After Tax Evaders (RATE) Program.

Key points

1. Assessment notice and CTA filing. Serving an Assessment Notice is not required to prosecute criminal cases. Under Section 7 of Republic Act No. 9282, the civil action is instituted with the criminal action before the CTA and cannot be reserved separately. RATE cases filed with the CTA should, as much as possible, come with an initial assessment.
2. Letters of Authority. LAs for RATE cases of the NID/PCD are signed by the DCIR-LIG, and LAs for regional RATE cases by the Regional Director. An LA covers only taxable years with established prima facie evidence of fraud or violation. Prior or subsequent years are included only if needed to trace continuing transactions, or if the same scheme is shown for those years.
3. Second examination and LAMS. The NID, PCD and SID may re-examine books even after a regular audit, subject to Section 235 of the NIRC. Deficiency tax paid in the first case is credited against the second assessment if the same findings are included. Checking the Letter of Authority Monitoring System is mandatory to avoid duplicate LAs, and each RDO submits a certified list of TAMP taxpayers by January 31 each year, and by July 5, 2008 for the current year.
4. Fraud cases and regular audits. If LAMS shows no LA for the current period, the LA goes to the NID, PCD or SID as a matter of course. Otherwise the LA is suspended, the regular audit office is notified, and the RDO terminates its audit within 30 days of the notice. The LA resumes only if fraud issues remain unresolved after the docket review. The CIR may refer an investigation to the NID or SID at any stage.
5. Qualifying cases. A case must involve violations under Sections 254, 255, 257 and 258 of the NIRC, including One-Time Transactions, and a high-profile or well-known taxpayer. Estimated basic tax deficiency must be at least P1,000,000.00 per year and tax type, with priority for aggregate basic deficiencies of P 50,000,000.00 or more per year.
6. Jurisdiction, surcharge and collections. The NID and PCD handle national cases and the SID handles regional cases, and the DCIR-LIG decides when more than one office developed the same case. If evidence is short of proof beyond reasonable doubt but clearly and convincingly shows fraud, a 50% surcharge is still imposed. Collections are attributed to the RDO or Division with regular jurisdiction.

Who is affected

• Taxpayers with qualifying RATE cases
• NID, PCD and SID investigating offices
• Revenue District Officers

Deadlines and effectivity

• RDO list of TAMP taxpayers due January 31 each year
• RDO list for the current year due on or before July 5, 2008
• RDO terminates audit within 30 days from notice

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