Tuesday, November 27, 2007 Tax notes: BIR letter notices
THE Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) 32-2007 prescribing the guidelines and procedures in handling letter notices (LN) generated through its Reconciliation of Listing for Enforcement System (Relief) and through the Third Party Matching – Bureau of Customs (TPM-BOC) Data Program.
Under the said RMO, 2006 LNs issued through Relief and the TPM-BOC Data Program cannot be converted to a Letter of Authority (LA) or a Tax Verification Notice (TVN). If there is an on-going audit/investigation pursuant to a previously issued LA or TVN for taxable year 2006, the newly issued LN shall be separately handled and whatever discrepancy paid for under an LN shall be credited against any new assessment that may be made provided the discrepancies disclosed by said audit/investigation are of the same nature as the discrepancies reflected in the LN.
From receipt of the LN, the taxpayer shall be given 30 days within which to submit documents in support of his arguments. A follow-up letter shall be sent 15 days after receipt of the LN. In case the taxpayer fails to respond to the follow-up letter or to submit the required documents within the 30-day period, an issue-based LA to cover specifically “Income and Value-added Taxes Due to Discrepancy Reflected in the LN” shall be issued and served to the taxpayer together with a Notice for Informal Conference.
Subsequently, if the taxpayer fails to settle the deficiency taxes within 15 days from receipt of Notice for Informal Conference, a Preliminary Assessment Notice/Final Assessment Notice shall be issued.
RMO 32-2007 also provides that the taxpayer shall be entitled to the abatement of interests and penalties if the deficiency taxes are paid within 30 days from receipt of the LN. Likewise, installment payment shall be allowed for tax liabilities exceeding P500,000.00. (Source: Punongbayan & Araullo)
