Download - Collection Procedures and Tax Remedies
-
7/28/2019 Collection Procedures and Tax Remedies
1/25
General Course for Revenue Officers
TMDTB 290 Slide 1
COLLECTION
PROCEDURES &
TAX REMEDIES
Topic 290
-
7/28/2019 Collection Procedures and Tax Remedies
2/25
General Course for Revenue Officers
TMDTB 290 Slide 2
COLLECTION PROCEDURES & TAX REMEDIES
1. Statutory Basis
2. Prescriptive Rules Governing Assessment
& Collection
3. Exception as to Period of Limitation of Assessment& Collection
4. Accounts Receivable Management
5. Mode of Payment
6. Abatement / Cancellation of Tax Liability
7. Administrative Remedies Available toGovernment
8. Administrative Remedies Available to Taxpayers
-
7/28/2019 Collection Procedures and Tax Remedies
3/25
General Course for Revenue Officers
TMDTB 290 Slide 3
OBJECTIVES
1. Enumerate the powers of the Commissioner of InternalRevenue as to assessment and collection of taxes;
2. Know the prescriptive rules governing assessmentand collection;
3. Know the exceptions as to the period of limitation onassessment and collection;
4. Become familiar with accounts receivable; and
5. Identify the administrative remedies available togovernment and taxpayers.
-
7/28/2019 Collection Procedures and Tax Remedies
4/25
General Course for Revenue Officers
TMDTB 290 Slide 4
STATUTORYBASIS :
TITLE 1, VII & X , National Internal
Revenue Code, as amended
PRESCRIPTIVERULE:
Taxes shall be assessed within three (3)years after the last day prescribed by law
for the filing of the return, and noproceeding in court without assessmentfor the collection of such taxes shall be
begun after the expiration of such period.
In case a return is filed beyond the periodprescribed by law, the three year periodshall be counted from the day the return
was filed. A return filed before the lastday prescribed by law for the filing
thereof shall be considered as filed onsuch last day.
Prescriptive Rule
-
7/28/2019 Collection Procedures and Tax Remedies
5/25
General Course for Revenue Officers
TMDTB 290 Slide 5
EXCEPTION TO THE PERIOD OF LIMITATION
Assessment of false or fraudulent return shall be assessed at any time withinten (10) years after the discovery of the falsity, fraud or omission.
The period agreed upon by both the CIR and the taxpayer may be extended bysubsequent written agreement made before the expiration of the periodpreviously agreed upon.
Any internal revenue tax which has been assessed within the period of limitationmay be collected by distraint or levy or by proceeding in court within five (5) yearsfollowing the assessment of tax.
Any internal revenue tax, as provided in No. (2) may be collected by distraint orlevy or by proceeding in court within the period agreed upon in writing before theexpiration of the five (5) year period. The period so agreed upon may be extendedby subsequent written agreements made before the expiration of the periodpreviously agreed upon.
Nothing in the immediate paragraph shall be construed to authorize theexamination and investigation or inquiry into any tax return filed in accordance withthe provision of any tax amnesty law or decree.
1.
2.
3.
4.
5.
-
7/28/2019 Collection Procedures and Tax Remedies
6/25
General Course for Revenue Officers
TMDTB 290 Slide 6
It is any tax deficiency not settled within
thirty (30) days from the date ofassessment. Collection enforcementmust be initiated by the Revenue
Officer within five (5) year prescriptionperiod.
ACCOUNTS RECEIVABLES
-
7/28/2019 Collection Procedures and Tax Remedies
7/25
General Course for Revenue Officers
TMDTB 290 Slide 7
COLLECTION FIELD FUNCTION TECHNIQUE
If the taxpayer does not respondwithin the next ten (10) calendardays, enforce collection throughadministrative summary remedies
with the issuance of theWarrant of Distraint and / or Levy.
-
7/28/2019 Collection Procedures and Tax Remedies
8/25
General Course for Revenue Officers
TMDTB 290 Slide 8
Assignment of Dockets for Collection
Collection Unit Chief / Collection
Supervisor
index each docket receivedfrom RDO
enter each core in theGeneral Control Ledger
(GCL)-BIR Form No. 1253
Group Supervisor
assigns dockets to the fieldmen prepare amemorandum of assignment to the
fieldmen for verification and enforcementof summary remedies
RDO docket with memo ofassignment for RDOssignature
Group Supervisor
furnish a copy to theCollection Supervisor
Revenue Officer
sign the memorandum
include the docket ofthe case in his inventory
of tax cases
Administrative Division as listed in Form 40
shall:
microfilm
record in the logbook
index each docket in cards furnish the Collection Division for
monitoring purposes batch dockets of collectible
accounts in a maximum of ten (10)dockets per batch
DOCKETSAssessment
Division
RDO
-
7/28/2019 Collection Procedures and Tax Remedies
9/25
-
7/28/2019 Collection Procedures and Tax Remedies
10/25
General Course for Revenue Officers
TMDTB 290 Slide 10
Requisites of a Request for Abatement
Tax Return and/or amended return with
copy of a previous return filed as basisfor comparison;
Evidence of payment of first installmentof tax due; and
Latest Certified Financial Statement.
-
7/28/2019 Collection Procedures and Tax Remedies
11/25
General Course for Revenue Officers
TMDTB 290 Slide 11
DEFINITION OF TERMS
DISTRAINT - refers to the seizure by the government ofpersonal property, tangible and intangible, to enforce the
payment of taxes.
LEVY - refers to the seizure by the government of realproperties and interest in or rights to such properties in
order to enforce the payment of taxes.
TAX LIEN - refers to the validated legal claim or charge bythe government on the property of the taxpayer eitherpersonal or real, as security for the payment of taxpayerstax liability filed by the RDO in the Register of Deed of Cityof Province where the property is located.
-
7/28/2019 Collection Procedures and Tax Remedies
12/25
General Course for Revenue Officers
TMDTB 290 Slide 12
NOTICE OF LEVY - refers to the written notice by the CIRof the act of seizure of real property addressed to the
Register of Deed of the City or Province where it issituated, for annotation at the back of the title, in orderenforce collection of delinquent taxes due from a taxpayer.
FORFEITURE - implies a divestiture of property without
compensation, in consequence of a default or offense.
GARNISHMENT - a proceeding in the nature of anattachment, by means of which credits, property, or effects
of the debtor in the hands of a third person may besubjected to the payment of claims of the creditor of suchdebtor.
DEFINITION OF TERMS
-
7/28/2019 Collection Procedures and Tax Remedies
13/25
General Course for Revenue Officers
TMDTB 290 Slide 13
CONSTRUCTIVE DISTRAINT - the distraining officer doesnot take actual possession of the properties distrained,leaves them with the taxpayer who shall be obligated topreserve the same intact and unaltered and not to disposethe same in any manner whatsover without the express
authority of the CIR.
SEIZURE - the distraining offices seizes and takes actualpossession of the property of the delinquent taxpayer.
DEFINITION OF TERMS
-
7/28/2019 Collection Procedures and Tax Remedies
14/25
General Course for Revenue Officers
TMDTB 290 Slide 14
Real Property
Warrant of Distraint and/or Levy
Under Section 207 of the NIRC:
a. Authority is given to the CIR or his dulyauthorized representative if the amountinvolved is in excess of P1, 000, 000
b. Authority is given to the RDO if the amountis P1, 000,000 or less
c. For computerized districts (ITS), the
Warrants of Distraints and/or Levy will begenerated automatically by the system
-
7/28/2019 Collection Procedures and Tax Remedies
15/25
General Course for Revenue Officers
TMDTB 290 Slide 15
REQUISITES OF A TAX LIEN
There must be a previous ascertainment of the
sum due by means of an assessment;
There must be a demand for payment of the taxliability, and
There must be a failure to pay the tax.
-
7/28/2019 Collection Procedures and Tax Remedies
16/25
General Course for Revenue Officers
TMDTB 290 Slide 16
SERVICE OF THE NOTICE OF LEVYThe Notice of Levy shall be sent thru registered mail or personally served upon:
The Register of Deeds orAssessors Office of theprovince or City where theproperty is located
The Delinquent taxpayeror his agent or managerof the business inrespect to which theliability arose
The occupant of theproperty in question, if theperson is outside thePhilippines, the facts ofthe Notice of Levy will beposted on the propertylevied upon and publishedin a newspaper once a
week for threeconsecutive weeks.
-
7/28/2019 Collection Procedures and Tax Remedies
17/25
General Course for Revenue Officers
TMDTB 290 Slide 17
ADVERTISEMENT
AND SALE
-
7/28/2019 Collection Procedures and Tax Remedies
18/25
General Course for Revenue Officers
TMDTB 290 Slide 18
CONTENTS OF THE NOTICE OF SALE
The amount of tax and penalty due;
The time and place of sale;
The name of the taxpayer against whom taxes are levied;
Exact location and short description of the property to
be sold;
The terms of payment to include cash or managerscheck; and
A Statement that reads The BIR may reject any or allbids.
-
7/28/2019 Collection Procedures and Tax Remedies
19/25
General Course for Revenue Officers
TMDTB 290 Slide 19
PUBLIC AUCTION / FORFEITURE
The sale shall be held eitherat the main entrance ofthe municipal building or cityhall or on the premises of
the property to be sold,as the officer conductingthe proceedings shalldetermine and as the noticeof sale shall specify.
-
7/28/2019 Collection Procedures and Tax Remedies
20/25
General Course for Revenue Officers
TMDTB 290 Slide 20
NEGOTIATED SALE
If there is an interested buyer on the real property absolutelyforfeited by the government, the levying officer shall:
Require thebuyer to makea written offeraddressed tothe CIR throughthe RegionalDirector /RDO.
Evaluate andanalyze if the
offer is to thebest interest ofthe government
-
7/28/2019 Collection Procedures and Tax Remedies
21/25
General Course for Revenue Officers
TMDTB 290 Slide 21
CONSTRUCTIVE DISTRAINT OF THE PROPERTY
OF A TAXPAYER
1. It is done when a person subject to tax, delinquent or not:
is retiring from any business subject to tax;intends to leave the Philippines;removes his property therefrom;hides or conceals his property; and
performs any act tending to obstruct the collection of tax.
2. Constructive Distraint is only a safeguard for and not ameans of collection of the tax. There is no definite taxdue in constructive distraint unlike in actual distraint.
-
7/28/2019 Collection Procedures and Tax Remedies
22/25
General Course for Revenue Officers
TMDTB 290 Slide 22
WARRANT OF GARNISHMENT
Bank Accounts or Salaries
Property or Rights to Property
Properties placed under
Constructive Distraint
-
7/28/2019 Collection Procedures and Tax Remedies
23/25
General Course for Revenue Officers
TMDTB 290 Slide 23
SALE OF PROPERTY DISTRAINED &
DISPOSITION OF PROCEEDS
Sell the goods, chattels, etc., including stocks and
other securities to the highest bidder for cash, orwith the approval of the Commissioner, thru theduly licensed produce or stock exchanges at thetime and place fixed in the notice.
If there is a winning bid, the Revenue Officerexecutes a Certificate of Sale of personalproperty.
-
7/28/2019 Collection Procedures and Tax Remedies
24/25
General Course for Revenue Officers
TMDTB 290 Slide 24
The Distraining Officer shall:
Require the buyer to make a written offer addressedto the CIR thru the Regional Director/RDO, indicatingthe amount offered and the mode of payment.
Prepare a memorandum, stating the background of the
case and the reasons for the negotiated sale to the RDOrequesting approval of the offer.
Prepare the Deed of Sale to be signed by the buyer, upon
receipt of the approval of the CIR. The Deed of Sale andthe entire docket will then be forwarded to the CIR.
PROCEDURES IN A NEGOTIATED SALE
-
7/28/2019 Collection Procedures and Tax Remedies
25/25
General Course for Revenue Officers
TMDTB 290 Slide 25
PROTEST ON THE ASSESSMENT
Procedures to be followed in cases of protest on assessments:
The Revenue Officer shall:
Stamp received on the letter of protest and attach the sameto the docket.
Determine if the letter of protest was filed by the taxpayerwithin the 30 day period from receipt of the assessmentnotice by the taxpayer (Sec. 228, NIRC).
Require the taxpayer to accomplish and sign a Waiver of theStatute of Limitation not later than six months.