Publications


Tax Digest
Volume 9,
Series 54
BIR Revises Waiver

Last April 4, Bureau of Internal Revenue (BIR) Commissioner Kim Henares consigned Revenue Memorandum Order 14-2016. It is to revise some of the guidelines concerning the Waiver of the Statute of Limitations, under Section 222, in relation to Section 203 of the National Revenue Code of 1997, which was revised for many times, the last amendment made was on June 29, 2012. This memorandum also concerns the Supreme Court case entitled CIR vs. Next Mobile Inc. It discusses the defective waivers may still be vs. Next Mobile Inc. It discusses the defective waivers may still be valid if both parties, such as BIR and taxpayers, are in pari delict. Thus, to avoid this from happening again, here are the new guidelines:

First, that the waiver “may be, but not necessarily” have a format, as long as it contains the important details, like: date of the execution shall be specified to conduct the collecting and assessing of taxes; and the signature of the taxpayer or an authorized representative, if it’s a corporation, then its officials may sign the waiver.

Second, the taxpayers should also indicate the particular taxes which are to be assessed in the waiver. According to the memorandum, there is only one exception.

“Except for waiver of collection of taxes which shall indicate the particular taxes assessed, the waiver need not specify the particular taxes to be assessed nor the amount thereof, and it may simply state "all internal revenue taxes" considering that during the assessment stage, the Commissioner of lnternal Revenue or her duly authorized representative is still in the process of examining and determining the tax liability of the taxpayer.” The memorandum stated.taxpayer.” The memorandum stated.

Third, it is the taxpayer’s burden to ensure that his/her waiver of statute of limitation is correct and validated by his/her appointed representative. The memorandum indicates that “the authority of the taxpayer's representative who participated in the conduct of audit or investigation shall not be thereafter contested to invalidate the waiver.”

Fourth, that the waiver is written is sufficient enough, provided that it follows NIRC’s guidelines. It may or may not be notarized.

Fifth, since the waiver is a voluntary act in the part of the taxpayer, the memorandum says that “the waiver shall take legal effect and be binding on the taxpayer upon its execution thereof.”

Sixth, submitting the waiver is the taxpayer’s duty and to keep a copy of it as well. “Submit its duly executed waiver to the Commissioner of lnternal Revenue or official is previously designated in existing issuances or the concerned revenue district officer or group supervisor as designated in the Letter of Authority/Memorandum of Assignment who shall then indicate acceptance by signing the same. Such waiver shall be executed and duly accepted prior to the expiration of the period to assess or to collect. The memorandum explained.

Seventh, there are only two material dates that should be indicated there – the execution and expiration.

Lastly, the taxpayer may extend the period of a previously executed waiver, provided that he/she would write it before the period expires.

Source: BIR tweaks rules on prescription waiver (by David Cagahastian) Business Mirror, April 26, 2016
RMO 14 - 2016

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