Summary
RMO No. 32-2007 prescribes guidelines for handling 2006 Letter Notices (LNs) from the RELIEF System and the Third Party Matching-Bureau of Customs (TPM-BOC) Data Program, covering income and VAT liabilities of individual and corporate taxpayers.
Key points
- Deployment and handling. 2006 LNs are deployed based on parameters set by AITEID and approved by the CIR, with the DTCS or DIRIM, via the Information Delivery Portal. They are not converted to LAs or TVNs. If an LA/TVN audit for 2006 is ongoing, the LN is handled separately and payments under the LN are credited against any assessment for discrepancies of the same nature.
- Service and response. An LN Task Force in the BIR National Office serves LNs by personal delivery and registered mail. A Follow-up Letter is served if there is no response 15 days after receipt. A taxpayer who disputes the discrepancy has 30 days from receipt to reconcile records and submit proofs.
- Escalation. If no response comes within 15 days of the Follow-up Letter, or documents are not submitted within the 30-day period, the Task Force recommends an issue-based LA on “Income and Value-Added Taxes Due to Discrepancy Reflected in the LN” with a Notice for Informal Conference. If the liability is not settled within 15 days of that notice or LA, the docket goes up for the PAN/FAN. Protests against the PAN/FAN are evaluated under RR No. 12-99.
- Unserved LNs. Unserved LNs go to the concerned RDO through the Office of the Regional Director. The RDO exhausts all means to locate the taxpayer, forwards served LNs the next day, and returns LNs still unserved after final determination that the taxpayer cannot be located.
- Computation, payment and abatement. Deficiency taxes are computed using the prescribed Computation Sheets and paid using BIR Form No. 0611-A. Interest and penalties are abated if the tax is paid within 30 days from receipt of the LN. Installment payment is allowed where liabilities exceed P 500,000.00, on a written Application for Installment Payment.
- Effect on amended returns. Under RMC No. 40-2003, LNs count as notice of audit or investigation for amending returns, so a taxpayer cannot amend the return for the period covered once the LN is issued.
Who is affected
- Individual and corporate taxpayers issued 2006 LNs
Deadlines and effectivity
- Follow-up Letter if no response 15 days after receipt of LN
- 30 days from receipt of LN to reconcile and submit proofs or to pay for abatement
- 15 days from Notice for Informal Conference/LA to settle
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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