RR No. 30-2002: Implements certain provisions of the Tax Code relative to the compromise settlement of internal revenue tax liabilitiess superseding RR Nos. 6-2000 and 7-2001

Summary

RR No. 30-2002 implements Tax Code of 1997 provisions on the compromise settlement of internal revenue tax liabilities, superseding RR Nos. 6-2000 and 7-2001.

Key points

1. Cases that may be compromised. These are delinquent accounts, and cases under administrative protest after issuance of the Final Assessment Notice that are still pending in BIR offices. Civil tax cases disputed before the courts, collection cases filed in courts, and criminal violations also qualify, other than those already filed in court or involving criminal tax fraud.
2. Cases that may not be compromised. These include Withholding Tax cases, unless the taxpayer invokes provisions of law that cast doubt on the obligation to withhold. Also excluded are criminal tax fraud cases confirmed by the Commissioner, criminal violations already filed in court, delinquent accounts with an approved installment schedule, and Estate Tax cases where compromise is requested on financial incapacity.
3. Grounds. The Commissioner of Internal Revenue may compromise any internal revenue tax on two grounds: doubtful validity of the assessment and financial incapacity.
4. Limits on financial incapacity offers. No such offer is considered if the taxpayer has a Tax Credit Certificate on hand or in transit, a pending claim for tax refund or tax credit, or a finalized agreement, or prospect of one, that resulted or could result in increased equity. No offer is entertained until the taxpayer waives in writing the secrecy of bank deposits, and circumstances that put the inability to pay in serious doubt can be a ground to deny it.
5. Minimum rates. Compromise on a per tax type assessment basis is subject to minimum rates in the Regulations, ranging from 10% to 40% of the basic assessed tax. The minimum rate for doubtful validity is 40% of the basic assessed tax, but the taxpayer may request a lower rate in writing, stating the legal and/or factual reasons.

Who is affected

• Taxpayers seeking compromise settlement of internal revenue tax liabilities

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