REVENUE ADMINISTRATIVE ORDER NO. 3-2001

SUBJECT : IMPLEMENTING FURTHER DEPARTMENT ORDER NO. 23-01 DATED OCTOBER 5, 2001 THAT PROVIDES FOR THE RULES ON THE FIRST PARAGRAPH OF SECTION 4 OF THE TAX CODE OF 1997

TO : ALL INTERNAL REVENUE OFFICERS AND OTHERS CONCERNED
______________________________________________________________________________________

I. OBJECTIVES

To identify the responsibilities of revenue officers and to provide for the procedure for the proper implementation of the first paragraph of Section 4 of the Tax Code of 1997, as implemented by Department Order No. 23-01, that vests in the Secretary of Finance the power to review the interpretation of the Tax Code and other tax laws by the Commissioner of Internal Revenue.

To provide for the certification fees to be paid to the Bureau of Internal Revenue by the taxpayers seeking review of rulings that interpret the provisions of the Tax Code and other tax laws.

II. SCOPE

This Revenue Administrative Order (RAO) covers rulings issued by the Commissioner of Internal Revenue (Commissioner) and by officers (delegatee/s) with duly delegated powers to issue rulings on behalf of the Commissioner under pertinent issuances such as, but not limited to the Commissioner's Memoranda dated June 21, 2000 and October 26, 2000; Revenue Memorandum Order (RMO) No. 75-99; Revenue Memorandum Circular (RMC) No. 10-2001, RMC Nos. 3-2001 and 2-2001, as supplemented by RMC No. 14-2001; and, RMC No. 39-2001.

Particularly, these rulings refer to those issued by the Commissioner, or by his Deputy Commissioner for Legal and Inspection Group, Assistant Commissioner for Legal Service, or by the Regional Directors, as may be appropriate.

This RAO does not cover, however, disputed assessments, refunds of internal revenue taxes, fees or other charges, and penalties imposed in relation thereto, or other matters arising under the Tax Code or other laws or portions thereof administered by the Bureau of Internal Revenue. In these instances, the Court of Tax Appeals has the exclusive appellate jurisdiction pursuant to the second paragraph of the same Section 4 of the Tax Code of 1997.

Neither shall this RAO apply to rulings that are deemed void ab initio because they contradict duly issued Revenue Regulations, Revenue Memorandum Orders, Revenue Memorandum Rulings, and Revenue Memorandum Circulars.

III. PROCEDURE

1. Within thirty (30) days from the date of receipt of the adverse ruling of the Commissioner, the affected taxpayer may seek the review of the ruling by the Department of Finance. In all cases, the adverse ruling that can be brought to the Department of Finance shall only be the final adverse decision of the Commissioner.

In the case of rulings by the Commissioner's delegatees, the taxpayer shall exhaust administrative remedies within the Bureau of Internal Revenue by filing a letter of reconsideration addressed to the Commissioner, but filed with the Office of the Assistant Commissioner for Legal Service (ACIR-LS) in the case of adverse rulings decided by the Revenue Regional Directors or with the Office of the Deputy Commissioner of Internal Revenue for Legal and Inspection Group (DCIR-LIG) in the case of adverse rulings decided by the ACIR-LS within fifteen (15) days from receipt of an adverse ruling, before requesting for a review by the Secretary of Finance;

2. File with the Office of the Commissioner, for endorsement to the ACIR-LS, a copy of the request for review of the Ruling;

3. Request from the ACIR-LS for an authenticated and certified true copy of the complete docket or records on file.

4. Pay the certification fee to the authorized agent bank having jurisdiction over the taxpayer or the place of business of the taxpayer, using Payment Form 0605;

5. Present to the ACIR-LS the original copy of the official receipt that evidences payment of the certification fee, and submit a photocopy thereof to form part of the docket or records of the case;

6. Within five (5) days from the date of payment of the certification fee, the ACIR-LS shall instruct the Division Chief of the Law Division or the International Tax Affairs Division, as the case may be, for each and every page of the records of the case, sequentially numbered, to be photocopied, including a copy of the subject BIR Ruling, and for the complete set to be stamped and signed by the concerned Division Chief to be an authentic and true copy of the original and complete records on file. In the case of rulings made by the Revenue Regional Directors and finally decided by the Commissioner to be adverse to the taxpayer, the ACIR-LS shall certify and authenticate the duplicate copy of the records of the case;

7. The appropriate office shall also prepare the endorsement letter of the Commissioner of Internal Revenue (Annex "A"), which letter shall be signed by the Assistant Commissioner for Legal Service, who is hereby designated as the Commissioner's duly authorized representative. In this regard, the ACIR-LS shall submit to the Commissioner, copy furnished the ODCIR-LIG, a monthly report of cases appealed and certifications made;

8. The authenticated and certified true copy of the docket or records of the case, including the endorsement thereof to the Secretary of Finance, through the Revenue Operations Group, shall be released to the holder of the original copy of the official receipt evidencing payment of the certification fee.

IV. TAXPAYER'S REQUEST FOR REVIEW BY THE SECRETARY OF FINANCE

A taxpayer who receives an adverse ruling from the Commissioner of Internal Revenue may, within thirty (30) days from the date of receipt of such ruling, seek its review by the Secretary of Finance, either by himself/itself or through his/its duly accredited tax agent or representative. The request for review shall be in writing and under oath, and must:

a) be addressed to the Secretary of Finance and filed with the Revenue Operations Group, Department of Finance, DOF Building, BSP Complex, Roxas Boulevard corner Pablo Ocampo Street, City of Manila;
b) contain the heading "Request for Review of BIR Ruling No. _____";
c) allege and show that the request was filed within the reglementary period;
d) allege the material facts upon which the ruling was requested;
e) state that exactly the same set of facts were presented to the BIR;
f) define the issues to be resolved;
g) contain the facts and the law relied upon to dispute the ruling of the Commissioner;
h) be signed by or on behalf of the taxpayer filing the request for review, provided that, only those lawyers engaged by the taxpayer and/or tax agents accredited by the BIR may sign on behalf of the taxpayer;
i) indicate the Taxpayer Identification Number (TIN) of the taxpayer;
j) be accompanied by a copy of the Commissioner's challenged ruling;
k) contain a statement of the Office of the Commissioner of Internal Revenue, indicating that a copy of the request for review of the ruling was received by the Commissioner's Office and;
l) specifically state that the taxpayer does not have a pending assessment or case in any court of justice where the same issues are being considered.

Furthermore, the taxpayer must, at the time of filing of the request for review, submit a duplicate copy of the records on file with the BIR pertaining to his request, which set of records must be authenticated and certified by the BIR.

V. CERTIFICATION FEE

For this purpose, the requesting taxpayer shall pay a certification fee in the amount of ten pesos (P10.00) for every page of the complete records on file that shall be reproduced and certified to be a true and authentic copy thereof.

Any and all amounts paid as certification fee are non-refundable and shall be forfeited in case the taxpayer finally decides not to seek a review by the Secretary of Finance.

VI. EFFECTIVITY CLAUSE

This Order shall take effect immediately.

Date:

The Honorable Secretary
Department of Finance
DOF Building, BSP Complex
Roxas Boulevard corner
Pablo Ocampo Street
M a n I l a

Thru : The Revenue Operations Group

Gentlemen:

In compliance with the requirements of Section 3(j) and (k) and of the second paragraph of the same Section 3 of Department Order No. 23-01 dated October 5, 2001, as implemented by BIR Revenue Administrative Order No. ___ dated ___________ , we are respectfully endorsing to your Office the following:

1. A certified true copy of the BIR Ruling No. _________ dated _________ that is the subject of the request for review by the adversely affected party, ___________________; and,
2. A certified and authenticated duplicate copy of the complete docket and records on file with the Bureau of Internal Revenue.

We further state that the copy of the taxpayer's request for review of the above-stated Ruling has been endorsed by the Office of the Commissioner to, and is on file with this Office.

Thank you.

Very truly yours,

Commissioner of Internal Revenue
By:

______________________________
Assistant Commissioner, Legal Service

REVENUE MEMORANDUM CIRCULAR NO. 44-2001

SUBJECT: Circularizing Department Order No. 23-01 Providing for the Implementing Rules of the First Paragraph of Section 4 of the National Internal Revenue Code of 1997 and Repealing for this Purpose Department Order No. 005-99 and Revenue Administrative Order No. 1-99

TO: All Internal Revenue Officers and Others Concerned.
_______________________________________________________________________________________

For the information and guidance of the taxpaying public and all internal revenue officers and others concerned, the Department Order No. 23-01, dated October 5, 2001, that provides for the implementing rules of the first paragraph of Section 4 of the National Internal Revenue Code of 1997 (Tax Code of 1997) and for the repeal of Department Order No. 005-99 and Revenue Administrative Order No. 1-99, is hereby circularized as follows:

"DEPARTMENT ORDER NO. 23-01

PROVIDING FOR THE IMPLEMENTING RULES OF THE FIRST PARAGRAPH OF SECTION 4 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, REPEALING FOR THIS PURPOSE DEPARTMENT ORDER NO. 005-99 AND REVENUE ADMINISTRATIVE ORDER NO. 1-99

WHEREAS, Section 4 of the National Internal Revenue Code of 1997 ("the NIRC") vests with the Commissioner of Internal Revenue exclusive and original jurisdiction to interpret its provisions and other tax laws, subject to review by the Secretary of Finance;

WHEREAS, Department Order No. 005-99, dated January 26, 1999 and Revenue Administrative Order No. 1-99, dated February 5, 1999, implements the power of the Secretary of Finance to review rulings of the Commissioner of Internal Revenue;

NOW, THEREFORE, I, JOSE ISIDRO N. CAMACHO. Secretary of Finance, by virtue of the powers of supervision and control over the Bureau of Internal Revenue granted to me by Section 2 of the NIRC and Book IV, Title II, Chapter 4, Section 18 of the Administrative Code of 1987, do hereby order:

Section 1. Scope of this Order. This Department Order shall apply to all rulings of the Bureau of Internal Revenue (BIR) that implement the provisions of the NIRC and other tax laws.

Section 2. Validity of Rulings. A ruling by the Commissioner of Internal Revenue shall be presumed valid unless modified, reversed or superseded by the Secretary of Finance.

Section 3. Rulings Adverse to the Taxpayer. A taxpayer who receives an adverse ruling from the Commissioner of Internal Revenue may, within thirty (30) days from the date of receipt of such ruling, seek its review by the Secretary of Finance, either by himself/itself or through his/its duly accredited agent or representative. The request for review shall be in writing and under oath, and must:

a) be addressed to the Secretary of Finance and filed with the Revenue Operations Group, Department of Finance, DOF Building, BSP Complex, Roxas Boulevard corner Pablo Ocampo Street, City of Manila;
b) contain the heading "Request for Review of BIR Ruling No. _____";
c) allege and show that the request was filed within the reglementary period;
d) allege the material facts upon which the ruling was requested;
e) state that exactly the same set of facts were presented to the BIR;
f) define the issues to be resolved;
g) contain the facts and the law relied upon to dispute the ruling of the Commissioner;
h) be signed by or on behalf of the taxpayer filing the request for review, provided that, only those lawyers engaged by the taxpayer and/or tax agents accredited by the BIR may sign on behalf of the taxpayer;
i) indicate the Taxpayer Identification Number (TIN) of the taxpayer;
j) be accompanied by a copy of the Commissioner's challenged ruling;
k) contain a statement of the Office of the Commissioner of Internal Revenue, indicating that a copy of the request for review of the ruling was received by the Commissioner's Office and;
l) specifically state that the taxpayer does not have a pending assessment or case in any court of justice where the same issues are being considered.

Furthermore, the taxpayer must, at the time of filing of the request for review, submit a duplicate copy of the records on file with the BIR pertaining to his request, which set of records must be authenticated and certified by the BIR.

These are mandatory requirements, and failure to comply with any of the stated substantive requirements shall be sufficient basis for the Secretary of Finance to dismiss with prejudice the request for review.

Section 4. Affirmation, Reversal or Modification by the Secretary of Finance. The Secretary of Finance may affirm, reverse or modify a ruling of the Commissioner of Internal Revenue. The action of the Secretary shall consider only the same set of facts presented to the BIR in the first instance.

In the case of an affirmation, the Secretary of Finance may rely wholly on the reasons stated in the ruling of the Commissioner of Internal Revenue.

Subject to the provisions of Section 246 of the NIRC, a reversal or modification of the ruling shall terminate its effectivity upon the earlier date of the receipt of written notice of such reversal or modification by the taxpayer or by the BIR.

Section 5. Certification Fee to be Imposed by the BIR. For this purpose, the BIR is given the authority to impose appropriate certification fees to carry out the provisions of this order.

Section 6. Repealing Clause. Department Order No. 005-99 and Revenue Administrative Order No. 1-99, as well as all other existing Department Orders and issuances of the Commissioner of Internal Revenue that are inconsistent with this Order, are hereby repealed.

Section 7. Effectivity. This Department Order shall take effect immediately.

Done in the City of Manila this 5th day of October 2001.

REVENUE MEMORANDUM CIRCULAR NO. 44-2001

SUBJECT: Circularizing Department Order No. 23-01 Providing for the Implementing Rules of the First Paragraph of Section 4 of the National Internal Revenue Code of 1997 and Repealing for this Purpose Department Order No. 005-99 and Revenue Administrative Order No. 1-99

TO: All Internal Revenue Officers and Others Concerned.
_______________________________________________________________________________________

For the information and guidance of the taxpaying public and all internal revenue officers and others concerned, the Department Order No. 23-01, dated October 5, 2001, that provides for the implementing rules of the first paragraph of Section 4 of the National Internal Revenue Code of 1997 (Tax Code of 1997) and for the repeal of Department Order No. 005-99 and Revenue Administrative Order No. 1-99, is hereby circularized as follows:

"DEPARTMENT ORDER NO. 23-01

PROVIDING FOR THE IMPLEMENTING RULES OF THE FIRST PARAGRAPH OF SECTION 4 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, REPEALING FOR THIS PURPOSE DEPARTMENT ORDER NO. 005-99 AND REVENUE ADMINISTRATIVE ORDER NO. 1-99

WHEREAS, Section 4 of the National Internal Revenue Code of 1997 ("the NIRC") vests with the Commissioner of Internal Revenue exclusive and original jurisdiction to interpret its provisions and other tax laws, subject to review by the Secretary of Finance;

WHEREAS, Department Order No. 005-99, dated January 26, 1999 and Revenue Administrative Order No. 1-99, dated February 5, 1999, implements the power of the Secretary of Finance to review rulings of the Commissioner of Internal Revenue;

NOW, THEREFORE, I, JOSE ISIDRO N. CAMACHO. Secretary of Finance, by virtue of the powers of supervision and control over the Bureau of Internal Revenue granted to me by Section 2 of the NIRC and Book IV, Title II, Chapter 4, Section 18 of the Administrative Code of 1987, do hereby order:

Section 1. Scope of this Order. This Department Order shall apply to all rulings of the Bureau of Internal Revenue (BIR) that implement the provisions of the NIRC and other tax laws.

Section 2. Validity of Rulings. A ruling by the Commissioner of Internal Revenue shall be presumed valid unless modified, reversed or superseded by the Secretary of Finance.

Section 3. Rulings Adverse to the Taxpayer. A taxpayer who receives an adverse ruling from the Commissioner of Internal Revenue may, within thirty (30) days from the date of receipt of such ruling, seek its review by the Secretary of Finance, either by himself/itself or through his/its duly accredited agent or representative. The request for review shall be in writing and under oath, and must:

a) be addressed to the Secretary of Finance and filed with the Revenue Operations Group, Department of Finance, DOF Building, BSP Complex, Roxas Boulevard corner Pablo Ocampo Street, City of Manila;
b) contain the heading "Request for Review of BIR Ruling No. _____";
c) allege and show that the request was filed within the reglementary period;
d) allege the material facts upon which the ruling was requested;
e) state that exactly the same set of facts were presented to the BIR;
f) define the issues to be resolved;
g) contain the facts and the law relied upon to dispute the ruling of the Commissioner;
h) be signed by or on behalf of the taxpayer filing the request for review, provided that, only those lawyers engaged by the taxpayer and/or tax agents accredited by the BIR may sign on behalf of the taxpayer;
i) indicate the Taxpayer Identification Number (TIN) of the taxpayer;
j) be accompanied by a copy of the Commissioner's challenged ruling;
k) contain a statement of the Office of the Commissioner of Internal Revenue, indicating that a copy of the request for review of the ruling was received by the Commissioner's Office and;
l) specifically state that the taxpayer does not have a pending assessment or case in any court of justice where the same issues are being considered.

Furthermore, the taxpayer must, at the time of filing of the request for review, submit a duplicate copy of the records on file with the BIR pertaining to his request, which set of records must be authenticated and certified by the BIR.

These are mandatory requirements, and failure to comply with any of the stated substantive requirements shall be sufficient basis for the Secretary of Finance to dismiss with prejudice the request for review.

Section 4. Affirmation, Reversal or Modification by the Secretary of Finance. The Secretary of Finance may affirm, reverse or modify a ruling of the Commissioner of Internal Revenue. The action of the Secretary shall consider only the same set of facts presented to the BIR in the first instance.

In the case of an affirmation, the Secretary of Finance may rely wholly on the reasons stated in the ruling of the Commissioner of Internal Revenue.

Subject to the provisions of Section 246 of the NIRC, a reversal or modification of the ruling shall terminate its effectivity upon the earlier date of the receipt of written notice of such reversal or modification by the taxpayer or by the BIR.

Section 5. Certification Fee to be Imposed by the BIR. For this purpose, the BIR is given the authority to impose appropriate certification fees to carry out the provisions of this order.

Section 6. Repealing Clause. Department Order No. 005-99 and Revenue Administrative Order No. 1-99, as well as all other existing Department Orders and issuances of the Commissioner of Internal Revenue that are inconsistent with this Order, are hereby repealed.

Section 7. Effectivity. This Department Order shall take effect immediately.

Done in the City of Manila this 5th day of October 2001.