The Bureau of Internal Revenue (BIR) has come out with additional guideline for its new audit strategy facilitating the speedy collection of deficiency taxes involving millions and even hundreds of millions of pesos.
The set of rules contained in Revenue Memorandum Circular No. 15-2020 issued by BIR Commissioner Caesar Dulay clarified certain provisions of Revenue Regulations No. 22-2020 that uses notice of discreprancy (ND) audit method instead of the traditional informal conference (IC) schedule which delay the collection of unpaid tax dues.
Under the ND, taxpayers are furnished with information about disallowances and discrepancies found in their tax returns.
The ND gives taxpayers 30 days to submit documents and answer the deficiency tax assessments.
The circular stated that if a taxpayer disagrees with the findings, the docket of the case is forwarded to the office of the regional director or to the concerned assistant commissioner in the national office for evaluation.
The regional director or the assistant commissioner shall issue the preliminary assessment notice (PAN) if the discrepancy is sustained.
The PAN shall be converted to final assessment notice (FAN) if not answered within 15 days upon receipt, thus, making the collection of deficiency taxes mandatory and executory.
However, taxpayers may still apply for reconsideration or reinvestigation with the regional director or the assistant commissioner.
The taxpayers may also elevate the case to internal revenue commissioner or file a judicial protest with the Court of Tax Appeals within 30 days upon receipt of the FAN.
BIR insiders admitted that the traditional IC unnecessarily delay the collection of deficiency taxes as taxpayers always make excuses to postpone scheduled meetings and submit piecemeal documents sought by taxmen.