Publications


Tax Digest
Volume 9,
Series 52
Standardization of Processing Compromise Settlement & Abatement

This Revenue Memorandum Order (RMO) discusses the new amendments on RMO No. 20-2007 on simplified processing of application for compromise settlement and abatement cases by concerned regional offices. The objectives of the Bureau are to facilitate and expedite the processing on application for compromise settlement, and abatement or cancellation of tax liabilities. Although, this order is for internal purposes, it is appropriate that taxpayers know how their application runs thru the system.

Accordingly, compromise settlement cases, resulting to a recommendation for denial of the application, shall be considered FINAL and the outstanding tax liabilities and/or penalties shall be immediately collected from the concerned taxpayer-applicant. The form on which the denial should be is prescribed on this revenue order, and will be called “Notice of Denial.” This notice are prepared by the authorized Large Taxpayers Service (LTS)-sub-Technical Working Committee (TWC) or Evaluation Board (EB) and Regional Evaluation Board (REB), in which case their initials must be duly affixed on the notice.

The flow of the process is as follows for DENIED application:

  1. Within 10 days after the denial, the notice, together with the entire docket of the application, shall be transmitted to the Chief, Accounts Receivable Monitoring Division (ARMD) for recording and monitoring purposes;
  2. Within 5 days from receipt of the Chief-ARMD, it shall be forwarded to the Commissioner of Internal Revenue (CIR) for signature;
  3. After approval of the CIR, the notice will again be forwarded to the Chief-ARMD for recording purposes;
  4. After recording, the Chief-ARMD will give the notice to the originating revenue officer, thereafter, issue the notice to the taxpayer.

A monthly consolidated report on all denied applications shall be prepared and submitted to the following, within 10 days after the end of each month:

  1. Assistant Commissioner (ACIR);
  2. Collection Service;
  3. Deputy Commissioner for Operations; and
  4. CIR

If, however, the application is APPROVED, it should strictly follows the procedural requirements set forth under Revenue Regulation (RR) No. 30-2005, and RR No. 13-2001, as amended by RR No. 4-2012; RMO No. 20-2007, and other relevant revenue issuances.

Furthermore, within 15 days, LTS-sub-TWC or EB and all regional TWGs or REBs shall evaluate and release their respective board’s decision from receipt of any application for compromise settlement or abatement.

Finally, the rules in this revenue order shall not apply to all applications for compromise settlement and abatement penalties that are transmitted to and pending with the TWG, NEB or TWC in the National Office as of January 29, 2016, but the pertinent procedural requirements set forth under RR No. 30-2002, and RR No. 13-2001, as amended by RR No. 4-2012, RMO No. 20-2007, and other relevant revenue issuances shall apply instead.

Revenue Memorandum Order No. 4-2016, January 25, 2016
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