BIR Revenue Memorandum Circular No. 17-90 (1990)

(NAR) VOL. 1 NO. 3 / JULY - SEPTEMBER 1990

[ BIR REVENUE MEMORANDUM CIRCULAR NO. 17-90, February 01, 1990 ]

SCHEDULE OF COMPROMISE PENALTIES IN COLLECTION OF TAXES ABROAD

For Internal revenue tax purposes, the pertinent portions of Revenue Memorandum Order No. 1-90, relevant to the collection of taxes abroad are quoted below: "I Objectives This Order is issued:

A. To update the Schedule of Compromise Penalties with a view to increase the compromise penalties and delete from the coverage thereof certain acts commonly resorted to by taxpayers as a means of tax evasion;

B. To reflect the changes in the Schedule which includes the Code Section, Nature of Violation, Criminal Penalty imposed and Amount of Compromise Penalty which are prescribed on Chapter II, Title X of the revised National Internal Revenue Code;

C. To adopt and implement a uniform application of the various compromise penalties for criminal violations of the Tax Code; and D. To provide supplemental guidelines on compromise penalties for resident taxfilers and non-residents as well." "II Policies Certain acts/violations which are commonly resorted to and applicable to non-resident taxpayers are imposed the same amount of compromise penalty as the resident taxpayers." "III Guidelines and Instructions 1. The internal revenue officers concerned shall apply the “Revised Schedule of Compromise Penalties”[given below] to ensure uniformity of action.

2. In no case shall the compromise penalty differ in amount from those specified in the Schedule, except when duly approved by the Commissioner or, in a proper case, by the Regional Directors.3. Although all amounts of compromise penalties incident to violations shall be itemized in the assessment notice and/or demand letter along with the other administrative penalties like surcharge and interest, the same should not form part of the total amount assessed/demanded but should appear separately as a suggestion to the taxpayer to pay lieu of criminal prosecution. If paid, the compromise penalties shall be collected and accounted for under the usual procedures, as internal revenue.

4. Since compromise penalties are only amounts suggested in settlement of criminal liability, and may not therefore be imposed or exacted on the taxpayer in the event that a taxpayer refuses to pay the suggested compromise penalty, the violation shall be referred for criminal action as heretofore mentioned.

5. Non-resident filers who commit any of the violations stated in the schedule shall pay the equivalent amount of compromise penalty in pesos or its equivalent in U.S. dollars." (Note: In the implementation of No. 5, above, reference should be made to Revenue Memorandum Circular No. 77-89, dated December 19, 1989, prescribing a uniform exchange rate of U.S. Dollar for the collection of taxes abroad. The said Circular has earlier been circularized.) "IV Repealing Clause All other orders which are inconsistent herewith are hereby repealed or revoked accordingly." "V Effectivity This Order shall take effect immediately." All revenue officers and other officials charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and urged to give the same the widest publicity possible. Adopted: 1 Feb. 1990

(Sgd.) JOSE U. ONG Commissioner of Internal Revenue REVISED SCHEDULE OF COMPROMISE PENALTIES Code Nature of Violation Amount of Compromise Sec. Penalty 253 Willful attempt to evade or defeat This violation cannot be any tax imposed by the National compromised because it Internal Revenue Code or the involves fraud Sec. 204 payment thereof. NIRC.*Code Nature of Violation Amount of Compromise Sec. Penalty 254 a) Willful failure to pay any internal There is no specific revenue tax at the time required by amount of compromise law or regulation. penalty prescribed but the same may be compromised at the discretion of the Commissioner on a case-to-case bases.* b) Failure to pay any internal b) If the amount of tax revenue tax at the time required by unpaid law or regulation. Exceeds But Does Compro- Not mise is Exceed P xxx P 500 P 200 500 1,000 400 1,000 2,000 700 2,000 5,000 1,000 5,000 7,500 1,500 7,500 10,000 2,000 10,000 15,000 3,000 15,000 2,000 4,000 20,000 30,000 6,000 30,000 60,000 8,500 50,000 100,000 12,000 100,000 500,000 16,000 500,0001,000,000 20,000 1,000,000 x x x 25,000 c) Willful failure to make/file any There is no specific return, keep records, or supply amount of compromise information at the time required by penalty prescribed, but the law or regulations. same may be compromised at the discretion of the Commissioner on a case to cases basis.* d) Failure to make / file any return If gross annual sales, or supply information at the time earnings, or receipts; or required by laws or regulations gross estate or giftExceeds But Does Compro- Not mise is Exceed P xxx P 10,000 P 200 10,000 20,000 400 20,000 30,000 600 30,000 50,000 1,000 50,000 75,000 1,500 75,000 100,000 2,000 100,000 300,000 3,000 300,000 500,000 5,000 5,000,00010,000,000 15,000 10,000,00025,000,000 20,000 25,000,000 x x x 25,000 e) Misrepresentation as to actual This violation cannot be filing of return or statement or compromised because it withdrawal of return or statement involves fraud. (Sec. 204, already filed. NIRC)* 274 Violation of any provision of the P 1,000 National Internal Revenue Code or any regulation of the Department of Finance for which no specific penalty is provided by law. Code Nature of Violation Amount of Compromise Sec. Penalty 277 Procuring the unlawful divulgence This violation should not of any confidential information be compromised because regarding the business, income, or it is against public policy inheritance of any taxpayer; to allow divulgence of unlawfully publishing or printing the confidential information, income, profits, losses, or unless this is validly expenditures appearing in any authorized under existing income tax return. law. * NOTE: These violations should be the subject of a formal written report on a case to case basis, addressed to: The Commissioner Bureau of Internal Revenue Quezon City, Philippines Attention: Chief, International Tax Affairs DivisionSource: Supreme Court E-Library