RMO No. 45-2019: Amends the definition of the term “Accounts Receivable/Delinquent Accounts” (AR/DAs) to be reported in the Financial Statements

Key points

1. Amended definition. AR/DA means the amount of tax due from a taxpayer that was not paid within the time prescribed for its payment.
2. Unpaid Revenues. These are dishonored checks, validated unpaid tax due per returns filed by the taxpayer, validated unpaid second installment of Income Tax by individual taxpayers, and tax liabilities per a final and executory court decision.
3. Unpaid Assessments. These become final and executory when the taxpayer fails to file a valid protest within thirty (30) days from receipt, or fails to submit supporting documents within sixty (60) days from filing a valid protest. They also arise when the taxpayer fails to appeal within thirty (30) days from receipt of the denial decision, to move for reconsideration or appeal a court decision favorable to the BIR in time, or to update the BIR on a change of address or cancellation of business registration.
4. What is recorded as an asset. Only Unpaid Revenues are recorded in the NG Books of Accounts and reported in the Financial Statements as an asset. They are reported by the Regional Collection Division, Large Taxpayers Division-Cebu/Davao and Large Taxpayers Collection Enforcement Division to the Finance Division or the Revenue Accounting Division.
5. Unpaid Assessments not recorded. Unpaid Assessments are not recorded in the NG Books of Accounts or reported in the Financial Statements. The taxpayer can still invoke the doubtful validity of the assessment at any stage of collection enforcement.

Who is affected

• Regional Collection Divisions
• Large Taxpayers Division-Cebu/Davao
• Large Taxpayers Collection Enforcement Division

Deadlines and effectivity

• Valid protest filed within thirty (30) days from receipt
• Supporting documents within sixty (60) days from filing the protest
• Appeal within thirty (30) days from receipt of the denial decision