REVENUE REGULATIONS NO. 12-99 S U B J E C T : I m p l e m e n t i n g t h e P r o v i s i o n s o f t h e N a t i o n a l I n t e r n a l R e v e n u e Co Code of 1997 Governing the Rules on Assessment of National Internal Revenue Taxes,Civil Taxes,Civil Penalties and Interest and the xtra!"udi#ial $ettlement of a Taxpa%er&s Taxpa%er&s Criminal'iolation Criminal'iolation of the Code Through Pa%ment of a $uggested CompromisePenalt% T O : A l l I n t e r n a l R e v e n u e ( f f i # e r s a n d ( t h e r s C o n # e r n e d SECTION 1. Scope. Pursuant to the provisions of $e#tion )** , in relation to $e#tion)*+ of the National Internal Revenue Code of 1997, these Regulations are here% promulgated to implement the provisions of $e#tions - , 7 , ).* , ))/ , )*7 , )*/ and )*9on assessment of national internal revenue taxes, fees and #harges and to provide the rules governing the extra!"udi#ial settlement of a taxpa%er&s #riminal violation of the said Code or an% of its implementing Regulations through pa%ment of a suggested #ompromise penalt%0 SECTION 2. General Prncple!. )01 The sur#harge andor interest herein pres#ried shall appl% to all taxes, fees and #harges imposed under the Code 2hi#h shall e #olle#ted at the same time, in the same manner, and as part of the tax0 Cdasia )0) In #ase the tax due from the taxpa%er is paid on a partial or installment asis, the interest on the defi#ien#% tax or on the delin3uen#% tax liailit% of the taxpa%er shall e imposed from due date of the tax until full pa%ment thereof0 The interest shall e #omputed ased on the diminishing alan#e of the tax, in#lusive of interests0 SECTION ". #$e Proce!! Re%$re&en' n '(e I!!$ance o) a #e)cenc* Ta+ A!!e!!&en'. ".1 ,oe o) proce$re! n '(e !!$ance o) a e)cenc* 'a+ a!!e!!&en': ".1.1 No'ce )or n)or&al con)erence. The Revenue (ffi#er 2ho audited the taxpa%er&s re#ords shall, among others, state in his report 2hether or not the taxpa%er agrees 2ith his findings that the taxpa%er is liale for defi#ien#% tax or taxes0 If the taxpa%er is not amenale, ased on the said (ffi#er&s sumitted report of investigation, the taxpa%er shall e informed, in 2riting, % the Revenue 4istri#t (ffi#e or % the $pe#ial Investigation 4ivision, as the #ase ma% e 5in the #ase Revenue Regional (ffi#es6or % the Chief of 4ivision #on#erned 5in the #ase of the IR National (ffi#e6 of the dis#repan#% or dis#repan#ies in the taxpa%er&s pa%ment of his internal revenue taxes, for the purpose of 8Informal Conferen#e,8 in order to afford the taxpa%er 2ith an opportunit% to present his side of the #ase0 If the taxpa%er fails to respond 2ithin fifteen 51+6 da%s from date of re#eipt of the noti#e for informal #onferen#e, he shall e #onsidered in default, in 2hi#h #ase, the Revenue 4istri#t (ffi#er or the Chief of the $pe#ial Investigation 4ivision of the Revenue Regional (ffi#e, or the Chief of 4ivision in the National (ffi#e, as the #ase ma% e, shall endorse the #ase 2ith the least possile dela% to the Assessment 4ivision of the Revenue Regional (ffi#e or to the Commissioner or his dul% authoried representative, as the #ase ma% e, for appropriate revie2 and issuan#e of a defi#ien#% tax assessment, if 2arranted0 ".1.2 Prel&nar* A!!e!!&en' No'ce PAN/. If after revie2 and evaluation % the Assessment 4ivision or % the Commissioner or his dul% authoried representative, as the #ase ma% e, it is determined that there exists suffi#ient asis to assess the taxpa%er for an% defi#ien#% tax or taxes, the said (ffi#e shall issue to the taxpa%er, at least % registered mail, a Preliminar% Assessment Noti#e 5PAN6 5PAN6 for the proposed assessment, sho2ing in detail, the fa#ts and the la2, rules and regulations, or "urispruden#e on 2hi#h the proposed assessment is ased 5see illustration in ANN: ANN: A hereof60 If the taxpa%er fails to respond 2ithin fifteen 51+6 da%s from date of re#eipt of the PAN, PAN, he shall e #onsidered in default, in 2hi#h #ase, a formal letter of demand and assessment noti#e shall e #aused to e issued % the said (ffi#e, #alling for pa%ment of the taxpa%er&s defi#ien#% tax liailit%, liailit%, in#lusive of the appli#ale p enalties0 ".1." E+cep'on! 'o Pror No'ce o) '(e A!!e!!&en'. The noti#e for informal #onferen#e and the preliminar% assessment noti#e shall not e re3uired in an% of thefollo2ing #ases, in 2hi#h #ase, issuan#e of the formal assessment noti#e for the pa%ment of the taxpa%er&s defi#ien#% tax liailit% shall e suffi#ient; 5i6 < hen t he fi ndingf or a n% de fi#ie n#% tax is the result of ma thema ti#al error in th e#omp e#omput utat atiion of the the tax tax appearing on the fa#e of the tax return filed % the taxpa%er= or 5ii6
representative0 The letter of demand #alling for pa%ment of the taxpa%er&s defi#ien#% tax or taxes shall state the fa#ts, the la2, rules rules and regulations, or "urispruden#e on 2hi#h the assessment is ased, o ther2ise, the formal letter of demand and assessment noti#e shall e void 5see illustration in ANN: ANN: hereof60 The same shall e sent to the taxpa%er on l% % registered mail or % personal deliver%0 If sent % personal deliver%, the taxpa%er or his dul% authoried representative shall a#>no2ledge re#eipt thereof in the dupli#ate #op% of the letter of demand, sho2ing the follo2ing; 5a6 ?is name= 56 signature= 5#6designation and authorit% to a#t for and in ehalf of the taxpa%er, if a#>no2ledged re#eived % a person other than the taxpa%er himself= and 5d6 date of re#eipt thereof0 ".1. #!p$'e A!!e!!&en'. A!!e!!&en'. The taxpa%er or his dul% authoried representative ma% protest administrativel% against the aforesaid formal letter of
demand and assessment noti#e 2ithin thirt%
[email protected] da%s from date of re#eipt thereof0 If there are several issues involved in the formal letter of demand and assessment noti#e ut the taxpa%er onl% disputes or protests against the validit% of some of the issues raised, the taxpa%er shall e re3uired to pa% the defi#ien#% tax or taxes attriutale to the undisputed issues, in 2hi#h #ase, a #olle#tion letter shall e issued to the taxpa%er #alling for pa%ment of the said defi#ien#% tax, in#lusive of
the appli#ale sur#harge andor interest0 No a#tion shall e ta>en on the taxpa%er&s disputed issues until the taxpa%er has paid the defi#ien#% tax or taxes attriutale to the said undisputed issues0 The pres#riptive period for assessment or #olle#tion of the tax or taxes attriutale to the disputed issues shall e suspended0 The taxpa%er shall state the fa#ts, the appli#ale la2, rules and regulations, or "urispruden#e on 2hi#h his protest is ased, other2ise, his protest shall e #onsidered void and 2ithout for#e and effe#t0 If there are several issues involved in the disputed assessment and the taxpa%er fails to state the fa#ts, the appli#ale la2, rules and regulations, or "urispruden#e in support of his protest against some of the several issues on 2hi#h the assessment is ased, the same shall e #onsidered undisputed issue or issues, in 2hi#h #ase, the taxpa%er shall e re3uired to pa% the #orresponding defi#ien#% tax or taxes a ttriutale thereto0 The taxpa%er shall sumit the re3uired do#uments in support of his protest 2ithin sixt%5-.6 da%s from date of filing of his letter of protest, other2ise, the assessment shall e#ome final, exe#utor% and demandale0 The phrase 8sumit the re3uired do#uments8 in#ludes sumission or presentation of the pertinent do#uments for s#rutin% and evaluation % the Revenue (ffi#er #ondu#ting the audit0 The said Revenue (ffi#er shall state this fa#t in his report of investigation0 If the taxpa%er fails to file a valid protest against the formal letter of demand and assessment noti#e 2ithin thirt%
[email protected] da%s from date of re#eipt thereof, the assessment shall e#ome final, exe#utor% and demandale0 If the protest is denied, in 2hole or in part, % the Commissioner, the taxpa%er ma% appeal to the Court of Tax Appeals 2ithin thirt%
[email protected] da%s from date of re#eipt of the said de#ision, other2ise, the assessment shall e#ome final, exe#utor% and demandale0 In general, if the protest is denied, in 2hole or in part, % the Commissioner or his dul% authoried representative, the taxpa%er ma% appeal to the Court of Tax Appeals 2ithin thirt%
[email protected] da%s from date of re#eipt of the said de#ision, other2ise, the assessment shall e#ome final, exe#utor% and demandale; Provided, ho2ever, that if the taxpa%er elevates his protest to the Commissioner 2ithin thirt%
[email protected] da%s from date of re#eipt of the final de#ision of the Commissioner&s dul% authoried representative, the latter&s de#ision shall not e #onsidered final, e xe#utor% and demandale, in 2hi#h #ase, the protest shall e de#ided % the Commissioner0 #dtaiIf the Commissioner or his dul% authoried representative fails to a#t on the taxpa%er&s protest 2ithin one hundred eight% 51/.6 da%s from date of sumission, % the taxpa%er, of the re3uired do#uments in support of his protest, the taxpa%er ma% appeal to the Court of Tax Appeals 2ithin thirt%
[email protected] da%s from the lapse of the said 1/.!da% period, other2ise, the assessment shall e#ome final, exe#utor% and demandale0 ".1.3 A&n!'ra'4e #ec!on on a #!p$'e A!!e!!&en'. The de#ision of the Commissioner or his dul% authoried representative shall 5a6 state the fa#ts, the appli#ale la2, rules
and regulations, or "urispruden#e on 2hi#h su#h de#ision is ased, other2ise, the de#ision shall e void 5see illustration in ANN: C hereof6, in 2hi#h #ase, the same shall not e #onsidered a de#ision on a disputed assessment= and 56 that the same is his final de#ision0 ".1.5 Con!'r$c'4e Ser4ce. If the noti#e to the taxpa%er herein re3uired is served % registered mail, and no response is re#eived from the taxpa%er
2ithin the pres#ried period from date of the posting thereof in the mail, the same shall e #onsidered a#tuall% or #onstru#tivel% re#eived % the taxpa%er0 If the same is personall% served on thetaxpa%er or his dul% authoried representative 2ho, ho2ever, refused to a#>no2ledge re#eipt thereof, the same shall e #onstru#tivel% served on the taxpa%er0 Constru#tive servi#e thereof shall e #onsidered effe#ted % leaving the same in the premises of the taxpa%er and this fa#t of #onstru#tive servi#e is attested to, 2itnessed and signed % at least t2o 5)6 revenue offi#ers other than the revenue offi#er 2ho #onstru#tivel% served the same0 The revenue offi#er 2ho #onstru#tivel% served the same shall ma>e a 2rittenreport of this matter 2hi#h shall form pa rt of the do#>et of this #ase 5see illustration inANN: 4 hereof60 SECTION 0. C4l Penal'e!. *01 T2ent%!ive Per#ent 5)+B6 $ur#harge0 There shall e imposed, in addition tothe asi# tax re3uired to e paid, a penalt% e3uivalent to t2ent%!five per#ent 5)+B6thereof, in an% the follo2ing #ases;*0101 ailure to file an% return and pa% the tax due thereon as re3uired under theprovisions of this Code or rules and regulations on the date pres#ried= or *010) nless other2ise authoried % the Commissioner, filing a return 2ith an internalrevenue offi#er other than those 2ith 2hom the return is re3uired to e filed= or *010@ ailure to pa% the defi#ien#% tax 2ithin the time pres#ried for its pa%ment in thenoti#e of assessment= or *010* ailure to pa% the full or part of the amount of tax sho2n on an% return re3uired toe filed under the provisions of this Code or rules and regulations, or the full amount of tax due for 2hi#h no return is re3uired to e filed, on or efore the date pres#ried for itspa%ment0 #dasia*0) ift% Per#ent 5+.B6 $ur#harge;*0)01 In #ase of 2illful negle#t to file the return 2ithin the period pres#ried % theCode, or in #ase a false or fraudulent return is 2illfull% made, the penalt% to e imposedshall e fift% per#ent 5+.B6 of the tax or of the defi#ien#% tax, in #ase an% pa%ment haseen made on the asis of su#h return efore the dis#over% of the falsit% or fraud;Provided, That a sustantial underde#laration of taxale sales, re#eipts o r in#ome, or asustantial overstatement of dedu#tions, as determined % the Commissioner or his dul%authoried representative, shall #onstitute prima fa#ie eviden#e of a false or fraudulentreturn; Provided, further, That failure to report sales, re#eipts or in#ome in an amountex#eeding thirt% per#ent
[email protected] of that de#lared per return, and a #laim of dedu#tions inan amount ex#eeding thirt% per#ent
[email protected] of a#tual dedu#tions, shall render the taxpa%er liale for sustantial underde#laration of sales, re#eipts or in#ome or for overstatement of dedu#tions, as mentioned herein; Provided, further, that the term 82illful negle#t to filethe return 2ithin the period pres#ried % the Code8 shall not appl% in #ase the taxpa%er,2ithout noti#e from the Commissioner or his authoried representative, voluntaril% filesthe said return, in 2hi#h #ase, onl% )+B sur#harge shall e imposed for late filing andlate pa%ment of the tax in lieu of the aove +.B sur#harge0 Conversel%, the +.Bsur#harge shall e imposed in #ase the taxpa%er files the return onl% after prior noti#e in 2riting from the Commissioner or his dul% authoried representative0*0)0) $e#tion - 5A6 of the Code provides that an% tax return filed % a taxpa%er 8ma% emodified, #hanged or amended8 % the taxpa%er 82ithin three 5@6 %ears from date of su#hfiling8 provided, ho2ever, that 8no noti#e for audit or investigation of su#h return,statement or de#laration has, in the meantime, een a#tuall% served upon the taxpa%er08Thus, if upon investigation, it is determined that the taxpa%er&s originall% filed tax returnis false or fraudulent, su#h taxpa%er shall remain liale to the +.B #ivil penalt%regardless that the taxpa%er has filed his amended tax return, if the said amended taxreturn, ho2ever, has een filed onl% after issuan#e of the Detter of Authorit% for theinvestigation of the taxpa%er&s tax return or su#h amendment has een made in the #ourseof the said investigation0 SECTION . ,oe o) Proce$re! n Co&p$'n6 )or '(e Ta+ an7or Applca8leS$rc(ar6e. $ho2n hereunder are illustrative #ases for the #omputation and assessmentof the tax, in#lusive of sur#harge 5if appli#ale6 and interest;
.1 La'e )ln6 an la'e pa*&en' o) '(e 'a+. Illustration; In#ome tax return for the#alendar %ear 199/ 2as due for filing on April 1+, 1999 ut the taxpa%er voluntaril% filedhis tax return, 2ithout noti#e from the IR, onl% on Eune @., 19990 The tax due per returnamounts to P1..,...0 In this #ase, the taxpa%er shall e liale for delin3uen#% penalties#onsisting of )+B sur#harge, plus ).B interest per annum, #omputed from due date of the tax until date of pa%ment, #omputed as follo2s; Calendar Fear 199/ In#ome tax due per return Add; )+B sur#harge for late filing and late pa%ment 5P1..,...0.. times )+B6 ).B int0 p0a0 from *!1+!99 to -!@.!99 5P1..,...0.. times 0.*1++)*6 P*,1++0)*
P1..,...0.. P)+,...0.. P)9,1++0)*
Total amount due 5ex#luding suggested #ompromise for late filing and late pa%ment of the tax6 P1)9,1++0)* HHHHHHHHH (nl% one )+B sur#harge shall e imposed for late filing of the return and late pa%ment of the tax0 .2 T(e 'a+ re'$rn ! )le on '&e 8$' )le '(ro$6( an n'ernal re4en$e o))cer o'(er '(an '( (o& '(e re'$rn ! re%$re 'o 8e )le. Illustration; The taxpa%er&s 199/in#ome tax return is re3uired to e filed through the authoried agent an> under the"urisdi#tion of R4( ast a>ati0 ut, 2ithout prior authoriation from the IR, thetaxpa%er filed his tax return and paid the tax through the authoried agent an> under the"urisdi#tion of R4( 4avao Cit%0 Tax due and paid per return is P1..,...0..0 Calendar Fear 199/ In#ome tax due per return Add; )+B sur#harge Total amount due Dess; Amount paid Amount still due HHHHHHHHH
P1..,...0.. P)+,...0.. P1)+,...0.. P1..,...0.. P)+,...0..
+0@ Date filing and late pa%ment due to taxpa%er&s 2illful negle#t0 Illustration; Thetaxpa%er did not file his in#ome tax return for the #alendar %ear 1997 2hi#h 2as due for filing on April 1+, 199/0 ?e 2as notified % the IR of his failure to file the tax return,for 2hi#h reason, he filed his tax return and paid the tax, onl% after the said noti#e, onEune @., 19990 The tax due per return is P1..,...0..0 Calendar Fear 1997 In#ome tax due per return P1..,...0.. Add; +.B sur#harge for 2illful negle#t to file the return and late pa%ment of the tax P1..,... times +.B6 P+.,...0.. ).B int0 p0a0 fr0 *!1+!9/ to -!@.!99 5P1..,...0.. times 0)*1++)*6 P)*,1++0)* P7*,1++0)* Total amount due 5ex#luding suggested #ompromisefor late filing and late pa%ment of the tax6 P17*,1++0)* HHHHHHHHH .0 Penal'* or penal'e! )or e)cenc* 'a+. As a rule, no sur#harge is imposed ondefi#ien#% tax and on the asi# tax0 ?o2ever, if the amount due in#lusive of penalties isnot paid on or efore the due date stated on the demand letter, the #orrespondingsur#harge shall e imposed0Illustration No0 1; Taxpa%er filed on time his in#ome tax return for #alendar %ear 1997and paid P1..,...0.. on April 1+, 199/0 pon pre!audit of his return, it 2as dis#losedthat he erroneousl% #omputed the tax due0 The #orre#t amount of tax due is P1).,...0..0The taxpa%er is assessed for defi#ien#% in#ome tax in a letter of demand and assessment noti#e issued on Eune @., 19990 Calendar Fear 1997 Tax due per pre!audit Dess; Amount assessed and paid per tax return filed 4efi#ien#% in#ome tax Add; ).B int0 p0a0 from *!1+!9/ to -!@.!99 5P).,...0.. times 0)*1++)*6
P1).,...0.. P1..,...0.. P).,...0.. P*,/@10.+
Amount still due P)*,/@10.+ HHHHHHHHH Illustration No0 ); AC C(RP(RATI(N filed its in#ome tax return for #alendar %ear 1997 and paid on time its in#ome tax sho2n thereunder, amounting to P1..,...0 $aidtaxpa%er 2as investigated0 pon verifi#ation of its a##ounting re#ords, it 2as dis#losedthat its dedu#tion, from gross in#ome, of representation expenses in the amount of P)..,...0.. did not meet all the statutor% re3uisites for dedu#tiilit%0 The #orporation2as dul% notified of the said dis#repan#% through a Preliminar% Assessment Noti#e0ased on the @+B in#ome tax rate on #orporations appli#ale in the %ear 1997, thein#ome tax due after investigation amounts to P17.,...0..0 After dedu#tion of in#ometax paid per return filed, the asi# defi#ien#% in#ome tax amounts to P7.,..., ex#ludingpenalties0 ailing to protest on time against the preliminar% assessment noti#e, a formalletter of demand and assessment noti#e 2as issued on a% @1, 1999, re3uiring pa%mentof the assessment not later than Eune @., 19990 Calendar Fear 1997 In#ome tax due per investigation P17.,...0.. Dess; In#ome tax paid per return P1..,...0.. 4efi#ien#% in#ome tax P7.,...0.. Add; ).B int0 p0a0 fr0 *!1+!9/ to -!@.!99 5P7.,... times 0)*1++)*6 P1-,9./0-7 Total amount still due P/-,9./0-7
HHHHHHHHH Illustration No0 @; :FJ C(RP(RATI(N filed its in#ome tax return for #alendar %ear 1997 2ith a net taxale in#ome of P+..,...0..0 At the appli#ale in#ome tax rate of @+Bfor the %ear 1997, its in#ome tax amounted to P17+,...0..0 ?o2ever, upon investigation,it 2as dis#losed that its in#ome tax return 2as false or fraudulent e#ause it did not reporta taxale in#ome amounting to another P+..,...0..0 (n its net in#ome of P1,...,...0..,per investigation, the in#ome tax due is P@+.,...0..0 4edu#ting its pa%ment per returnfiled, the defi#ien#%, ex#luding penalties, amounted to P17+,...0..0 It 2as dul% informedof this finding through a Preliminar% Assessment Noti#e0 ailing to protest on timeagainst the preliminar% assessment noti#e, a formal letter of demand and assessmentnoti#e 2as issued on a% @1, 1999 #alling for pa%ment of the defi#ien#% in#ome tax onor efore Eune @., 19990 In this #ase, said #orporation is liale for the #ivil penalties of +.B sur#harge for havingfiled a false or fraudulent return, plus ).B interest per annum on the defi#ien#%,#omputed as follo2s; Calendar Fear 1997 In#ome tax due per investigation P@+.,...0.. Dess; In#ome tax paid per return P17+,...0.. 4efi#ien#% in#ome tax P17+,...0.. Add; +.B sur#harge for filing a fraudulent or false return 5P17+,...0.. times +.B6 ).B int0 p0a0 fr0 *!1+!9/ to -!@.!99 5P17+,...0.. times 0)*1++)*6 P*),)710-7 Total amount due P@.*,7710-7
P/7,+..0.. P1)9,7710-7
HHHHHHHHH . La'e pa*&en' o) a e)cenc* 'a+ a!!e!!e. In general, the defi#ien#% taxassessed shall e paid % the taxpa%er 2ithin the time pres#ried in the noti#e anddemand, other2ise, su#h taxpa%er shall e liale for the #ivil penalties in#ident to latepa%ment0 Illustration; ased on the aove Illustration No0 @, $#enario *, assuming that the #alendar %ear 1997 defi#ien#% in#ome tax assessment against :FJ C(RP(RATI(N, in theamount of P@.*,7710-7, is not paid % Eune @., 1999, the deadline for pa%ment of theassessment, and assuming further that this a ssessment has alread% e#ome final and#olle#tile0 In this #ase, su#h #orporation shall e #onsidered late in pa%ment of the saidassessment0 Assuming, further, that the #orporation pa%s its tax assessment onl% % Eul%@1, 1999, the #ivil penalties for late pa%ment shall e #omputed as follo2s; Calendar Fear 1997 Total defi#ien#% in#ome tax assessed on a% @1, 1999 Add; )+B sur#harge for late pa%ment 5P@.*,7710-7 times )+B6 ).B interest p0a0 from 7!1!99 to 7!@1!99 5P@.*,7710-7times 0.1----76 P+,.790+* Total amount due 5ex#luding suggested #ompromisepenalt% for late pa%ment6 HHHHHHHHH
P@.*,7710-7 P7-,19)09) P/1,)7)0*P@/-,.**01@
+0- Computation of ).B interest per annum in #ase of partial or installment pa%mentof a tax liailit%0 Illustration No0 1; In #ase extended pa%ment of the tax is dul%authoried0 4 C(RP(RATI(N, due to finan#ial in#apa#it%, re3uested that it eallo2ed to pa% its in#ome tax liailit% per return for #alendar %ear 199/, in the amount of P1,...,...0.., in four 5*6 monthl% installments, starting April 1+, 19990 Its re3uest haseen dul% approved pursuant to $e#0 +@ of the Tax Code0In this #ase, no )+B sur#harge shall e imposed for late pa%ment of the tax sin#e itsdeadline for pa%ment has een dul% extended0 ?o2ever, ).B interest per annum for theextended pa%ment shall e imposed, #omputed ased on the diminishing alan#e of the8unpaid amount8, pursuant to the provisions of $e#tion )*9 546 of the Code0No )+B sur#harge on extended pa%ment shall e imposed provided, ho2ever, that thetaxpa%er&s re3uest for extension of the period 2ithin 2hi#h to pa% is made on or eforethe deadline pres#ried for pa%ment of the tax due0 Conversel%, if su#h re3uest is madeafter the deadline pres#ried for pa%ment, the taxpa%er shall alread% e treated late inpa%ment, in 2hi#h #ase, the )+B sur#harge shall e imposed, even if pa%ment of thedelin3uen#% e a llo2ed in partial amortiation0 E+a&ple: Calendar Fear 199/ In#ome tax due per return P1,...,...0.. Dess; 1st installment of the tax on or efore *!1+!99 P)+.,...0.. alan#e as of *!1+!99 P7+.,...0.. Add; ).B int0 p0a0 from *!1+!99 to +!1+!99 5P7+.,...0.. times 0.1----76 P1),+..0.@ Amount due on +!1+!99 P7-),+..0.@ Dess; )nd installment on +!1+!99 5P)+.,...0.. plusP1),+..0.@ interest6 P)-),+..0.@ alan#e as of +!1+!99 P+..,...0.. Add; ).B int0 p0a0 from +!1+!99 to -!1+!99 5P+..,...0.. times 0.1----76 P/,@@@0@+ Amount due on -!1+!99 P+./,@@@0@+ Dess; @rd installment on -!1+!99 5P)+.,...0.. plus P/,@@@0@+ interest6 P)+/,@@@0@+ alan#e as of -!1+!99 P)+.,...0.. Add; ).B int0 p0a0 from -!1+!99 to 7!1+!99 P)+.,...0.. times 0.1----76 P*,1--0-/ *th and final installment on 7!1+!99 P)+*,1--0-/ Illustration No0 ); Computation of tax delin3uen#% in #ase of partial pa%ment of the taxdue 2ithout prior IR authoriation for extended pa%ment0 xample; G?I C(RP(RATI(N did not file its final ad"ustment in#ome tax return for the#alendar %ear 199/ 2hi#h 2as due on April 1+, 19990 The IR informed the #orporationof its failure to file its said tax return and re3uired that it file the same, in#lusive of the)+B sur#harge and ).B interest per annum penalties in#ident to the said omission0 (na% 1+, 1999 it advised that its in#ome tax due for the said %ear amounts toP1,...,...0.. ut, ho2ever, due to its adverse finan#ial #ondition at the moment, it 2ille unale to pa% the entire amount, in#lusive of the delin3uen#%
penalties0 ?en#e, ona% 1+, 1999, it made a partial pa%ment of P*..,...0..0 Assuming that the IR demanded pa%ment of the unpaid alan#e of its tax oligation pa%ale % Eune 1+, 1999,the unpaid alan#e of the #o rporation&s delin3uent in#ome tax shall e #omputed asfollo2s; Calendar Fear 199/ In#ome tax due per return Add; )+B sur#harge for late filing and late pa%ment ).B interest per annum from *!1+!99 to +!1+!99 5P1,...,...0..times 0.1----76 P1-,---07. !
P1,...,...0.. P)+.,...0.. P)--,---07.
Amount due as of +!1+!99 P1,)--,---07. Dess; Partial pa%ment on +!1+!99 P*..,...0.. alan#e as of +!1+!99 P/--,---07. Add; ).B interest per annum from +!1+!99 to -!1+!99 5P/--,---07. times 0.1----76 P1*,***0*7 Amount still due 5ex#lusive of the suggested #ompromisepenalt% for late filing and late pa%ment P/11,111017 HHHHHHHHH If the said taxpa%er fails to pa% the amount of P/11,111017 % Eune 1+, 1999, no further )+B sur#harge for late pa%ment of the tax shall e imposed0 Instead, onl% the ).Binterest per annum shall e imposed against the taxpa%er against the taxpa%er, #omputedfrom due date thereof 5i0e0, Eune 1+, 19996 until paid0 If said taxpa%er pa%s the same onpartial pa%ment asis, the ).B interest per annum shall e #omputed on the diminishingalan#e thereof, pursuant to the pro#edures in the pre#eding Illustration No0 1, $e#tion-0- hereof0 SECTION 3. S$66e!'e Co&pro&!e Penal'* n E+'ra-$cal Se''le&en' o) aTa+pa*er;! Cr&nal 'iolation0 $e#tion ).* of the Tax Code of 1997 provides that 8All #riminal violations ma% e #ompromised ex#ept; 5a6 those alread% filed in #ourt, or 56 those involving fraud08 This means that, in general, the taxpa%er&s #riminal liailit% arising from his violation of the pertinent provision of the Code ma% e settled extra!"udi#iall% instead of the IR instituting against the taxpa%er a #riminal a#tion in Court0 A #ompromise in extra!"udi#ial settlement of the taxpa%er&s #riminal liailit% for his violation is #onsensual in #hara#ter, hen#e, ma% not e imposed on the taxpa%er 2ithout his #onsent0 ?en#e, the IR ma% onl% suggest settlement of the taxpa%er&s liailit% through a #ompromise0 The extra!"udi#ial settlement of the taxpa%er&s #riminal liailit% and the amount of the suggested #ompromise penalt% shall #onform 2ith the s#hedule of #ompromise penalties provided under Revenue emorandum (rder No0 1!9. or as hereafter revised0 SECTION 5. Repealn6 Cla$!e. An% revenue issuan#e 2hi#h is in#onsistent here2ithshall e #onsidered repealed, amended, or modified a##ordingl%0 SECTION <. E))ec '4'*. /01 General Rule0 In general, the provisions of these Regulations shall e effe#tive eginning Eanuar% 1, 199/ pursuant to the provisions of $e#tion / of R0A0 No0 /*)*,other2ise >no2n as the National Internal Revenue Code of 19970 /0) Computation of $ur#harge and Interest on 4efi#ien#% Tax Assessment0 An %defi#ien#% tax assessment issued eginning Eanuar% 1, 199/ shall e governed % therules pres#ried in these Regulations0 /0@ (ther Provisions0 An % pro vi sio n of th ese Re gu la ti on s not oth er 2i se spe#ifi#all% provided in the National Internal Revenue Code of 1997 shall ta>e effe#t fifteen 51+6 da%s after puli#ation in an% ne2spaper of general #ir#ulation0
