Summary
RMO No. 27-2010 sets enhanced policies and guidelines to re-invigorate the Run After Tax Evaders (RATE) Program, from case development through investigation, Letters of Authority and prosecution.
Key points
- Coordination and information requests. The National Investigation Division (NID) and Special Investigation Divisions (SIDs) coordinate with agencies such as the Department of Justice, NBI and CIDG. The Taxpayer Lifestyle Check System is used to develop RATE cases. RDOs and Large Taxpayers offices that fail to give requested information within 15 working days from receipt face administrative disciplinary action.
- Preliminary investigation and LA. A preliminary investigation must first establish prima facie evidence of fraud or tax evasion. The case then goes with a justifying memorandum to the DCIR-LIG, and if meritorious to the Commissioner, who approves the LA. The DCIR-LIG checks the LA Monitoring System, and RATE LAs are signed by the DCIR-LIG.
- Scope of LA and 50% surcharge. An LA covers only the taxable years with established prima facie evidence, unless earlier or later years must be examined to trace continuing transactions or show the same scheme. If evidence is short of proof beyond reasonable doubt but fraud is shown by clear and convincing evidence, a 50% surcharge is imposed with the deficiency tax assessment.
- Evaluation and referral. After formal investigation, the NID or SID refers the case to the National Office RATE Team or Legal Division, which returns insufficient cases or prepares the Complaint Affidavit and Referral Letter for review by the DCIR-LIG. Final review, approval and signature rest with the Office of the Commissioner.
- Targets. The NID must report at least two (2) cases per month submitted to the DCIR-LIG for prosecution. Each SID must report at least three (3) cases per quarter.
- Prosecution and collections. The NO-RATE Team prosecutes NID cases and Legal Divisions prosecute SID cases, in coordination with the Department of Justice. Warrants of Distraint, Levy or Garnishment protect government interests, and taxes collected are credited to the RDO or LT District Office or Division with regular jurisdiction over the taxpayer.
Who is affected
- National Investigation Division and Special Investigation Divisions
- Revenue District Offices and Large Taxpayers offices
- Taxpayers investigated under the RATE Program
Deadlines and effectivity
- Information requests answered within 15 working days from receipt
- NID: at least two (2) cases per month
- Each SID: at least three (3) cases per quarter
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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