Rmo 13-12

(1)
March 29, 2012
REVENUE MEMORANDUM ORDER NO. 013-12
SUBJECT : Revised Guidelines and Procedures in Handling Letter

Notices Generated Through Third-Party Information Data
Matching with Tax Returns
TO : All Internal Revenue Officers and Others Concerned
I. Objective
This Order is issued to simplify guidelines, procedures and minimize

processing time in handling Letter Notices (LNs) generated through the following
third-party information (TPI) data matching programs:
Reconciliation of Listing for Enforcement System Summary

List of Sales and Purchases (RELIEF);
Bureau of Customs Data Program (BOC); and
Tax Reconciliation System (TRS).
II. Coverage
This Order shall cover the income, value-added and/or percentage tax
liabilities of individual and corporate taxpayers who are issued LNs based on the
RELIEF, BOC and TRS TPI data matching programs.
III. Policies
1. As provided for under existing Revenue Memorandum Orders (RMOs)

on RELIEF (i.e., RMO No. 30-2003 , as amended), BOC (i.e., RMO No.
34-2004 , as amended) and TRS (i.e., RMO No. 28-2007 , as amended), as
further amended by RMO Nos. 7-2010 , taxpayers with discrepancy on their
income, sales and/or purchases (domestic or imported) shall be notified of such
findings through the issuance of a Letter Notice (LN).
Copyright 2015 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia 2014 1
2. RELIEF-BOC-TRS LN (Annex "A"), together with the Details of
Taxpayer's Customers'/Suppliers' Records (DTCSR) (Annex "B-1") and/or Details
of Importations with Return Information Matching (DIRIM) (Annex "B-2"), and
Details of Withholding Agents/Payors and Payees/Income Recipients' Records
(DWAPR) (Annex "B-3"), shall be generated based on the parameters determined
and discrepancy threshold set by the Commissioner of Internal Revenue (CIR) and
to be deployed via the LN portal facility. TAHIED
3. The LNs for any given taxable year shall be handled by the
investigating office (Revenue District Office or Audit Division under the Large
Taxpayers Service [LT Audit Division]) having jurisdiction over the taxpayer.
4. If there is an on-going audit/investigation pursuant to an electronic

Letter of Authority (eLA) prior to LN assignment, the Revenue Officer (RO)
handling the eLA shall also be assigned the LN. The said LN shall not be
considered closed but shall be consolidated with the eLA. The TPI reflected in the
LN shall be properly utilized and the extent of utilization shall be included in the
report of investigation by the RO. The policy of non-closure of the eLA without
the resolution of the LN shall be strictly enforced.
5. If an eLA is terminated before an LN is issued, the investigating office

shall request the tax docket from the Assessment Division (AD) or Administrative
Division (AdminD), as the case may be, for non-large taxpayers and Records
Division for large taxpayers and shall ascertain whether the discrepancies reflected
in the LN are in the report of investigation. If discrepancies are not included, the
RO shall pursue action on the LN based on the procedures as prescribed herein. If
the discrepancies are considered, the RO shall recommend cancellation of the LN
and the tax docket shall contain the LN, photocopies of the Memorandum Audit
Report, Working Papers showing reconciliation undertaken, BIR Form 0500 Series
and other applicable documentary attachments.
6. The deficiency income, value-added and/or percentage taxes shall be

computed using the formulas prescribed in the Computation Sheet hereto attached
(Annexes "C", "C-1", "C-2", "C-3", and "C-4").
7. Taxpayer shall be entitled to abatement of surcharge, interest and

compromise penalty provided he/she/it pays the basic deficiency tax(es) within
thirty (30) days from receipt of the LN. The payment of deficiency taxes shall be
made using Payment Form (BIR Form No. 0611-A) (Annex "D"). Any payment of
tax liabilities beyond the thirty (30)-day period shall be assessed with the
corresponding surcharge (if applicable), interest and compromise penalty. In both
cases, an "Agreement Form" (Annex "E") shall be executed by the taxpayer or
his/her/its duly authorized representative/tax agent indicating therein the amount
and date when the deficiency tax(es) shall be paid.
8. Installment payment shall be allowed as settlement of the tax

deficiencies arising from LN in case the total tax liabilities exceed five hundred
thousand pesos (P500,000.00) for non-large taxpayers or ten million pesos (P10M)
for large taxpayers. In this case, a written request for installment payment of the
basic tax due plus increments using the Application for Installment Payment
(Annex "F") must be accomplished. The corresponding interest on the basic tax
due per installment shall be computed up to the date of payment as shown in the
application. The payment shall be made using Payment Form (BIR Form No.
0611-A). In case of default of any installment payment, the remaining balance of
basic tax plus the increments shall become due and demandable immediately
without prior notice to taxpayer.
9. The Revenue District Officer (RDO)/Chief, LT Audit Division shall

recommend to the Regional Director (RD)/Assistant Commissioner-LTS
(ACIR-LTS) the issuance of an issue-based eLA under certain situations as
required under this Order. HEcIDa
10. RMC No. 40-2003 provides that LN issued to taxpayers can be

considered a notice of audit or investigation insofar as amendment of any return
covering the period referred to in the LN. Accordingly, a taxpayer shall be
disqualified from amending his/her/its return covering the period referred to in the
LN upon issuance of the same. Furthermore, RMO No. 55-2010 circularizes
the decision of the Court of Tax Appeals in the case of Big AA Corporation v.
Commissioner of Internal Revenue, C.T.A. Case No. 7093, February 22, 2006,
which upheld the provisions of RMC No. 40-2003 relative to the treatment of LN,
as a "notice of audit or investigation" in the absence of evident error or clear
abuse of discretion."
11. The settlement and payment of the deficiency tax(es) under an LN or

issue-based eLA shall not preclude the Bureau from issuing an eLA covering the
comprehensive audit of a taxpayer's tax liabilities, if warranted. However, any
payment of deficiency tax(es) shall be credited against any assessment that may be
made by the investigating office pursuant to an eLA provided the discrepancies
disclosed by said audit are of the same nature as the discrepancies reflected in the
LN.
12. The AD and concerned Office of the Head Revenue Executive

Assistant-Large Taxpayers Service (OHREA-LTS) for non-large and large
taxpayers, respectively, shall evaluate, review and monitor the action taken on the
LN by the investigating offices. However, only those applicable functions shall be
performed by the concerned OHREA-LTS.
13. The taxpayer who fails to settle his/her/its tax liabilities resulting from
LN discrepancy shall be issued any or a combination of the following actions:
a) Issuance of eLA under certain situations and/or Preliminary

Assessment Notice (PAN)/Final Assessment Notice (FAN) in
accordance with the provisions of Revenue Regulations (RR)
No. 12-99 ;
b) Imposition of administrative sanction of suspension and

temporary closure of business establishment in accordance with
the provisions of RMO No. 3-2009 (Oplan Kandado) if the
under-declaration is thirty percent (30%) or more may be
recommended;
c) Issuance and enforcement of the Subpoena Duces Tecum (SDT)

in strict compliance with procedures enunciated in RMO No.
88-2010 and other applicable pertinent revenue issuances.
After compliance with procedures on the issuance and
enforcement of the SDT, docket shall be endorsed to the Office
of the Regional Director (ORD)/Office of Assistant
Commissioner-LTS (OACIR-LTS) through the AD/concerned
OHREA-LTS for issuance of PAN/FAN in accordance with the
provisions of Revenue Memorandum Circular (RMC) No.
23-2000 .
14. A Revalida Committee in the National Office shall be created to be

headed by the CIR to conduct post review of the processes in the LN generation
and its deployment, audit reports of investigation on LNs of erring ROs, and
selected LN dockets acted upon (e.g., cancelled, closed, paid/assessed cases, etc.).
A separate Revenue Special Order shall be issued for the purpose.
15. For LN originally assigned (with eLAs [either the investigation is

on-going or terminated] or without eLAs issued) or assumed (referred to another
RO), the RO assigned shall resolve the LN discrepancy within thirty (30) days
from receipt of original assignment/referral. The RD/ACIR-LTS shall direct the
ROs to act without delay on the resolution of the LN discrepancy. After the lapse
of the thirty (30)-day period and there is no resolution or action taken, except when
RO performs other necessary procedures as herein required and/or recommends
imposition of administrative sanction of suspension and temporary closure of
business establishment under RMO No. 3-2009 or recommends the issuance and
enforcement of SDT under RMO No. 88-2010 and other applicable pertinent
revenue issuances, the RDO/Chief, LT Audit Division shall submit the list of
taxpayers/LNs and the names of the ROs to the ORD/OACIR-LTS for transmittal
to the Office of the Commissioner of Internal Revenue (OCIR). The CIR shall
refer the lists of the taxpayers/LN to the Revalida Committee for appropriate action
and the names of the erring ROs to Inspection Service for the issuance of a
Show-Cause Order. Appropriate sanctions against erring ROs shall be imposed, if
warranted.
16. Activities and accomplishments of the investigating offices relative to

this Order shall be monitored by the OCIR and the concerned offices, i.e., Office
of Deputy Commissioner Operations Group, Audit Information Tax Exemption
and Incentives Division (AITEID), etc., based on key performance indicator (KPI).
IV. Guidelines and Procedures
A. Office of the Commissioner of Internal Revenue
1. Determine the parameters and set the discrepancy threshold for

the generation of LNs.
2. Set the KPI of a given taxable year on LN performance by the

investigating office.
3. Receive from AITEID the original copies of the LNs, together

with the DTCSR/DIRIM/DWAPR, of the following taxpayers
for further appropriate action/decision:
a. Taxpayers enjoying tax exemption under Section 30

of the Tax Code, as amended, and incentives
granted by other Investment Promotion Agencies (IPAs)
such as the Board of Investments (BOI), Philippine
Export Zone Authority (PEZA), etc.;
b. Taxpayers whose total sales or receipts is classified as

zero-rated or effectively zero-rated transactions under
Sections 106 and 108 of the Tax Code, as
amended; and
c. Government agencies and instrumentalities except

government-owned and controlled corporations
(GOCCs) that are subject to income, value-added and/or
percentage taxes. cCHETI
4. Receive from the ORD/OACIR-LTS the consolidated lists of

taxpayers/LNs and refer to the Revalida Committee for
appropriate action and names of the erring ROs to Inspection
Service for the issuance of a Show-Cause Order.
5. Monitor all activities and accomplishments of the concerned

offices based on the KPI.
B. Information Systems Group
B.1 Data Warehouse Team (DWT)
1. Activate the processes needed for LN generation based on the

parameters determined and discrepancy threshold set by the
CIR.
2. Transmit electronically to investigating offices the generated

LNs, together with the DTCSR/DIRIM/DWAPR, copy
furnished the OCIR/ORD/OACIR-LTS/AITEID/AD/concerned
OHREA-LTS of the master list of LNs.
3. Transmit electronically to the ORD/OACIR-LTS the details of

cancelled LNs due to issues on data integrity.
4. Segregate and forward to AITEID the original copies of the

LNs, together with the DTCSR/DIRIM/DWAPR, of taxpayers
classified under item IV (A.3).
5. Receive from ORD/OACIR-LTS request for generation of

validated LNs, together with the DTCSR/DIRIM/DWAPR,
previously classified as cancelled due to issues on data integrity,
as well as notice of filing with the AdminD/Records Division
those that are invalid and perform the procedures under item IV
(B) (B.1) (2).
6. Receive from AITEID the following:
a. Lists of LNs of taxpayers classified under item IV (A.3)

previously transmitted to the investigating offices but
were returned to AITEID for transmittal to the OCIR, if
any;
b. Original copies of the LNs, together with the

DTCSR/DIRIM/DWAPR, and other documentary proofs
(e.g., print-out of updated ITS-REG data, etc.) for
regeneration (i.e., taxpayers who transferred to another
investigating office prior to the assignment of LNs to
ROs, ITS-REG data information error, etc.).
7. Regenerate LNs, together with the DTCSR/DIRIM/DWAPR, of

taxpayers who transferred their respective registration to
another investigating office or with ITS-REG data information
error after confirmation of the resolution of registration-related
discrepancies by the concerned investigating offices.
B.2 Security Management Division (SMD)
1. Receive from the investigating offices and

ORD/OACIR-LTS/AD/OHREA-LTS the System Access Form
(BIR Form No. 0044) (Annex "G").
2. Provide system access rights and privileges to the LN portal

facility to the concerned offices for the verification and
validation of the details of the LN data.
C. Audit Information Tax Exemption and Incentives Division
1. Receive from DWT the electronic copy of the master list of

LNs.
2. Receive from DWT and investigating offices the original copies

of the LNs, together with the DTCSR/DIRIM/DWAPR, of
taxpayers classified under item IV (A.3), if any.
3. Receive from investigating offices the original copies of LNs,

together with the DTCSR/DIRIM/DWAPR, and other
documentary proofs (e.g., print-out of updated ITS-REG data,
etc.) for regeneration (i.e., taxpayers who transferred to another
investigating office prior to the assignment of LNs to ROs,
ITS-REG data information error, etc.).
4. Receive from investigating offices/AD/concerned OHREA-LTS

the Monthly Status/Accomplishment Report on Letter Notices
(Annex "H").
5. Update status of LNs in the LN masterlist based on the Monthly

Status/Accomplishment Report on Letter Notices.
6. Transmit to OCIR the original copies of the LNs, together with
the DTCSR/DIRIM/DWAPR, of taxpayers classified under
item IV (A.3) originating from DWT and investigating offices.
7. Transmit to DWT the following:
a. Lists of LNs of taxpayers classified under IV (A.3)

originating from the investigating offices; and
b. Original copies of LNs, together with the

regeneration (i.e., taxpayers who transferred to another
ROs, ITS-REG data information error, etc.).
8. Prepare the following consolidated reports based on

accomplishment reports submitted by the investigating offices
and Assessment Division/OHREA-LTS:
a. Management reports;
b. Assessment and collection;
c. KPI on LN performance (e.g., 80% served, 50% under

audit/investigation, P1M collection) as determined by the
CIR. caHIAS
9. Provide top management with the data and reports as may be

required.
10. Monitor all activities by the investigating offices based on the

KPI.
D. Investigating Offices
1. Download and acknowledge electronically the receipt of the

LNs consisting of the following:
a. Master list of LNs;
b. LNs (RELIEF-BOC and TRS);
c. DTCSR;
d. DIRIM; and/or
e. DWAPR.
In case of system unavailability, receive soft copy of the above

from the respective RDC.
2. Fill up and submit to SMD the System Access Form for the
grant of system access to the LN portal facility to be used for
validation of LNs.
3. Validate the LNs using the following guidelines and

procedures:
a. Verify if taxpayer is classified under item IV (A.3) and

transmit to AITEID the original copies of the LNs,
together with the DTCSR/DIRIM/DWAPR.
b. Perform 100% validation on the remaining LNs:
i. Access the Integrated Tax System-Registration

(ITS-REG) for basic taxpayer information (e.g.,
name/trade name, address and RDO code), match
the information indicated in the LN, and proceed
with the validation on the matched data.
ii. RELIEF-BOC LN
Access ITS Returns Processing System

(RPS) the Quarterly VAT Return (BIR
Form 2550Q) for four (4) quarters and
match with the amounts reflected in the
LN/DTCSR/DIRIM.
Obtain hard copies of all aforementioned

tax returns/attachments duly filed by
concerned taxpayer with the district office
or through the Electronic Filing and
Payment System (EFPS).
Access and download the TPI data (e.g.,

SLS, SLP and BOC data) from the LN
portal facility for matching with the
LN/DTCSR/DIRIM.
Proceed with the validation of the matched

data.
iii. TRS LN
Access ITS-RPS for the following:
o Annual Information Return of

Creditable Income Tax Withheld
(Expanded)/Income Payments
Exempt from Withholding Tax
(Form 1604-E).
o Annual Income Tax Return (BIR

Form 1701/1702).
o Quarterly VAT Returns for four (4)

quarters/Monthly Percentage Tax
Return for twelve (12) months (BIR
Form 2550Q/2551M, whichever is
applicable).
Obtain hard copies of all aforementioned

tax returns/attachments duly filed by
concerned taxpayer with the district office
or through the EFPS.
Compare the amounts reflected in the

accessed returns from ITS-RPS and/or hard
copies of returns with the figures reflected
in the LNs.
Access and download the updated TPI data

(e.g., Gross sales/Income payments per
Alphalist of Payees Subjected to Expanded
Withholding Taxes and the amount of tax
withheld) from the LN portal facility.
Match the figures reflected in the

downloaded TPI data from LN portal
facility with the figures reflected in the
LN/DWAPR with regard to the gross
sales/income declarations and tax withheld
per Alphalist of all Payors.
Proceed with the validation of the matched
data.
c. Forward to AITEID the original copies of the LNs,

together with the DTCSR/DIRIM/DWAPR, and other
documentary proofs (e.g., print out of updated ITS-REG
data, etc.) for regeneration (i.e., taxpayers who
transferred to another investigating office prior to the
assignment of LNs to ROs, ITS-REG data information
error, etc.). TcDIaA
However, and prior to transmission of the documents to

AITEID, all the registration-related
discrepancies/findings (i.e., unmatched address, error in
RDO code, error in tagging as VAT exempt entity, etc.)
shall first be resolved by the investigating offices such
as, but not limited to, updating of registration data in the
ITS-REG.
d. Recommend to the RD/ACIR-LTS the issuance of eLAs

on LNs (DTCSR/DIRIM/DWAPR) with different or
irreconcilable figures/data after actual validation of the
total discrepancy as compared to the sourced data from
the ITS, etc. (e.g., discrepancy in the amount of gross
sales/purchases per LN as against amount of
sales/purchases per verification with the ITS-RPS and
the manually filed returns [IT/VAT/Percentage/Monthly
Remittance {Creditable Income Taxes Withheld} Annual
Information] and Alphalist of Payees Subjected to
Expanded Withholding Taxes, insufficiency of data, with
ITS error (i.e., due to erroneous encoding, incorrect
taxable year, multiple same line entries on the details of
DTCSR/DIRIM/DWAPR), etc.
4. Assign to ROs the validated LNs, together with the

DTCSR/DIRIM/DWAPR, to be served personally to the
concerned taxpayers.
LNs which remain unserved due to failure to locate the

taxpayers after exhausting all possible or available means must
strictly comply with the requirements on the publication of their
status as "Cannot Be Located" taxpayers, cancellation of their
registration, and assessment of the deficiency taxes following
the guidelines and procedures under RMC 98-2010 and
unnumbered memorandum of the CIR dated April 28, 2011, as
amended.
5. Maintain a separate record of all LNs assigned to ROs for

accountability which shall contain the following information:
a. LN Number (system-assigned control number);
b. Name of Taxpayer issued LN;
c. TIN of taxpayer;
d. Period Covered;
e. Name of RO assigned to handle the LN;
f. Date of Assignment; and
g. Remarks.
6. Request from AD or AdminD for non-large taxpayers and

Records Division for large taxpayers the tax dockets with eLA
already terminated, and ascertain whether the discrepancies
reflected in the LN were considered in the report of
investigation. If discrepancies are not included, the RO shall
pursue action on the LN based on the procedures as prescribed
herein. If discrepancies are considered, the RO shall
recommend the cancellation of the LN.
In all cases, RO shall resolve LN discrepancy within thirty (30)

days from receipt of the original assignment/referral.
7. After service of the LN, RO shall compute the deficiency taxes

and prepare the Computation Sheets subject, however, to the
following procedures:
Discrepancy on sales only:
a. The RO shall reconcile on a per line-by-line basis the

discrepancy reflected on the RELIEF-BOC-TRS LN;
b. If the discrepancy in the RELIEF-BOC-TRS LN

originated from the same customer/client/payor, the RO
shall get the higher discrepancy;
c. If the discrepancy from RELIEF-BOC-TRS LN

originated from different customer/client/payor, the RO
shall add the discrepancy from both to arrive at the total
discrepancy on sales.
Discrepancies on sales and/or purchases:
a. If the discrepancies on RELIEF-BOC-TRS LN are for

both sales and purchases, the RO shall compare the
resulting additional income on the discrepancies and use
the higher additional income between the two (2) sources
of discrepancies for assessment purposes;
b. If the discrepancy on purchases is not directly

attributable to discrepancy on sales, the RO shall add the
discrepancy on sales (additional income) and the
additional gross income from the discrepancy on
purchases.
In all cases, before the RO shall compute the deficiency taxes,

the reconciliation of the discrepancy/ies in the LN must be
made.
Furthermore, the RO shall apply the audit procedures in

handling and resolution of issues related to the LN based on
applicable existing Revenue Audit Memorandum Orders and
other pertinent revenue issuances.
8. Request from the taxpayer who was issued an LN to furnish the

soft copy(ies) of the following within five (5) days from receipt
of the said request:
a. Summary List of Purchases (SLP) if discrepancy in

on sales; ScaATD
b. Summary List of Sales (SLS) and Annual Information

Return of Creditable Income Tax Withheld
(Expanded)/Income Payments Exempt from Withholding
Tax (Form 1604-E) with the Alphalist of Payees
Subjected to Expanded Withholding Taxes if
discrepancy is on purchases or if the data is incomplete
or not available in the LN portal facility.
In case of taxpayer's failure to comply with the request, the

issuance and enforcement of SDT shall be recommended
pursuant to RMO No. 88-2010 and other applicable pertinent
revenue issuances.
9. Send a Confirmation Request from TPI sources attesting to the

veracity of the data included in the LN package (Annexes "I"
and "I-1").
If no response from the TPI source after the lapse of five (5)
days from service of Confirmation Request, the RO may
consider the data in the LN package to be true and correct.
However, if there is/are TPI source/s located outside of the
jurisdiction of the investigating office, the RO shall send the
Confirmation Request to the taxpayer through registered mail
with Registered Return Card and wait for the lapse of ten (10)
days after mailing thereof before proceeding to the next step.
The RO shall recommend the issuance of an eLA and the filing
of a perjury case against the TPI source for declaring overstated
purchases/understated sales. In case the TPI source/s is/are
located outside of the jurisdiction of the investigating office, the
RO shall recommend to the concerned RD/ACIR-LTS the
issuance of eLA and the filing of a perjury case against the TPI
source for declaring overstated purchases/understated sales.
If the TPI source did not agree with the discrepancy reflected in
the LN (DTCSR/DIRIM/DWAPR), he/she/it must be required
to execute a Sworn Statement to that effect and state his/her/its
true and correct sales/purchases (Annexes "J" and "J-1"). The
RO shall recommend the issuance of an eLA and the filing of a
perjury case against the TPI source for the erroneous
declaration in the submitted SLS/SLP/information return or
supplying incorrect information. In case the TPI source/s is/are
located outside of the jurisdiction of the investigating office, the
RO shall recommend to the concerned RD/ACIR-LTS the
issuance of eLA and the filing of a perjury case against the TPI
source for declaring overstated purchases/understated sales.
10. Issue a Follow-up Letter (Annex "K") if the taxpayer fails to

respond within five (5) days from receipt of LN and if no
response is received from the taxpayer within the said period or
he fails to submit the required documents after filing his/her/its
protest within ten (10) days after receipt of the LN, the RO shall
endorse the docket and recommend to the RD/ACIR-LTS
through the AD/concerned OHREA-LTS the issuance of Notice
for Informal Conference (Annex "L"), together with the
DTCSR/DIRIM/DWAPR and Response to Findings Pursuant to
Section 228 of the NIRC of 1997, as amended, (Annex
"L-1") shall be served to the taxpayer within thirty (30) days
from issuance thereof.
If the taxpayer fails to settle his/her/its tax liabilities within five

(5) days from receipt of Notice for Informal Conference,
together with the DTCSR/DIRIM/DWAPR and Response
Form, the investigating office shall endorse immediately the
docket to the ORD/OACIR-LTS through the AD/concerned
OHREA-LTS for any or a combination of the following actions:
a) Issuance of Preliminary Assessment Notice (PAN)/Final

Assessment Notice (FAN) in accordance with the
provisions of RR No. 12-99;
b) Imposition of administrative sanction of suspension and

temporary closure of business establishment in
accordance with the provisions of RMO No. 3-2009
(Oplan Kandado) if the under-declaration of sales,
receipts and income is thirty percent (30%) or more may
be recommended;
c) Issuance and enforcement of the SDT in strict

compliance with procedures enunciated in RMO No.
88-2010 and other applicable pertinent revenue
issuances. After compliance with procedures on the
issuance and enforcement of the SDT, docket shall be
endorsed to the ORD/OACIR-LTS through the
AD/concerned OHREA-LTS for issuance of PAN/FAN
in accordance with the provisions of RMC No. 23-2000.
11. Receive from taxpayer who refutes the accuracy of the figures
in the LN (e.g., due to erroneous encoding or due to timing
differences, etc.) documentary proofs, reconciliation schedules,
etc. in support of his/her/its arguments within ten (10) days
from receipt of the LN. Evaluate, review and compute the
deficiency income, value-added and/or percentage taxes based
on the corrected/adjusted taxable base plus increments. If there
are no documentary proofs or there are incomplete documentary
requirements submitted by the taxpayer within the prescribed
period in support of his/her/its protest, follow the applicable
procedures as herein prescribed.
12. Receive from taxpayer the duly accomplished Application for

Installment Payment, if applicable. The interest corresponding
to the basic tax due per agreed installment plan shall be
computed up to the date of payment as shown in the application.
Evaluate and recommend the approval of the application in
accordance with the conditions under item III (8) of this Order;
otherwise, recommend the disapproval thereof if there is a
deviation from the payment scheme. Monitor and keep track the
payments of taxpayers with approved requests for installment
payments. HDIaST
Classification Total Amount of Frequency Approving

Tax Liabilities Official
Non-large Exceeds five hundred Two (2) equal Regional Director

taxpayer thousand pesos monthly installment
(P500,000.00) but not
more than three million
pesos (P3.0M)
Exceeds three million Three (3) equal

pesos (P3.0M) but not monthly installment
more than ten (10)
million pesos (P10.0M)
Exceeds ten million Six (6) equal

pesos (P10.0M) monthly installment
Large Exceeds ten million Two (2) equal ACIR-LTS

Taxpayer pesos (P10M) but not monthly installment
more than thirty million
pesos (P30.0M)
Exceeds thirty million Three (3) equal

pesos (P30.0M) but not monthly installment
more than fifty million
pesos (P50.0M)
Exceeds fifty million Six (6) equal monthly

pesos (P50.0M) installment
13. Submit to AD/OHREA-LTS LN dockets for paid cases within

ten (10) days after the payment of deficiency taxes for
approval/disapproval by the RD/ACIR-LTS. Likewise, the LN
dockets for assessed cases shall be submitted to AD
immediately after affixture of signature on the reports by the
RDO/Chief, LT Audit Division for issuance of PAN/FAN in
accordance with RR No. 12-99.
14. Forward to AD the following LN dockets:
a. For cancellation of LNs, if the discrepancy is considered

in the audit case of taxpayers covered by eLAs already
terminated;
b. For closure of LNs consolidated with eLAs, either paid

or assessed, if the discrepancy is considered in the audit
case of taxpayers; and
c. Other LNs recommended for cancellation/closure, e.g.,

no discrepancy, etc.
15. Submit to the ORD/OACIR-LTS the list of taxpayers/LNs and

the names of erring ROs referred to in item III (15), in relation
to item III (14) of this Order, for transmittal to the OCIR within
five (5) days following the close of each month.
16. Act on all protests by taxpayers requesting reinvestigation or

reconsideration on the PAN/FAN within ten (10) days after
receipt of the protest letter/tax docket referred by the AD. If the
protest letter is filed with the investigating office, request
immediately the retrieval of the tax docket from AD or AdminD
for non-large taxpayers, as the case may be, and the Records
Division for large taxpayers and proceed with the evaluation
thereof in accordance with the provisions of RR No. 12-99.
17. Prepare and submit to AITEID the Monthly

Status/Accomplishment Report on Letter Notices within ten
(10) days following the close of each month, copy furnished the
ORD/OACIR-LTS/AD/concerned OHREA-LTS.
Cancelled/Closed LNs that were either paid or assessed, for

regeneration, etc. shall be excluded in the report on the
following month after their cancellation, closure, etc. However,
cases issued with PAN/FAN which are validly protested for
reinvestigation/reconsideration shall be included in the report
for the month the tax docket is received from the AD/Admin or
Records Division, as the case may be.
18. Monitor activities and evaluate the performance of ROs relative

to the LNs assigned to them based on KPI.
E. Office of the Regional Director/Office of the Assistant Commissioner

Large Taxpayers Service
1. Receive from DWT the electronic copy of the master list of

LNs.
grant of system access to the LN portal facility to be used in the
review of LNs classified as cancelled due to issues on data
integrity.
3. Ascertain the validity of the cancelled LNs due to issues on data

integrity based on the LN masterlist received from DWT. If
valid, prepare request and forward to DWT for generation of the
LNs, together with the DTCSR/DIRIM/DWAPR; otherwise,
file the LNs with the AdminD/Records Division and inform
DWT of the action taken thereon.
4. Receive from investigating office through the

AD/OHREA-LTS, if applicable, the LNs of taxpayers that were
acted upon for approval/disapproval, e.g., classified under IV
(A.3), recommended for cancellation and closure, regeneration,
report of investigation on paid cases, request for issuance of
eLAs, issuance of PAN/FAN, recommendation on imposition of
administrative sanction of suspension and temporary closure of
business establishment, Application for Installment Payment,
etc.
5. Endorse to Legal/Law Division LN cases that were recommend

for issuance of SDT.
6. Transmit to OCIR the consolidated list of taxpayers/LNs and

the names of erring ROs referred to in item III (15), in relation
to item III (14) of this Order, within ten (10) days following the
close of each month.
7. Receive from investigating office/AD/concerned OHREA-LTS
the Monthly Status/Accomplishment Report on Letter Notices.
8. Monitor all activities/accomplishments by the investigating

offices. cCESTA
F. Assessment Division/Concerned Office of the Head Revenue Executive

Assistant Large Taxpayers Service
1. Receive from the DWT the electronic copy of the master list of
LNs.
grant of system access to the LN portal facility to be used in the
review of LNs.
3. Forward to the investigating office the tax dockets with eLAs

already terminated to ascertain whether or not the discrepancies
reflected in the LNs were considered in the report of
investigation. If the discrepancies were not included, the RO
shall pursue action on the LNs based on the procedures as
prescribed in this Order. If the discrepancies were considered,
the RO shall recommend the cancellation of the LNs.
4. Receive from investigating office the LN dockets and conduct

appropriate review based on the prescribed procedures on the
action taken on the LNs with respect to the extent of
discrepancy utilization/payment of deficiency taxes and forward
the same to the ORD/OACIR-LTS for approval/disapproval
thereof:
a. Original copies of the LNs, together with the

DTCSR/DIRIM/DWAPR, of taxpayers classified under
IV (A.3);
b. Original copies of the LNs, together with the

regeneration, (i.e., taxpayers who transferred to another
ROs, ITS-REG data information error, etc.);
c. For cancellation of LNs, if the discrepancy is considered

in the audit case of taxpayers covered with eLAs already
terminated;
d. For closure of LNs consolidated with eLAs, either paid

or assessed (for issuance of PAN/FAN), if the
discrepancy is considered in the audit case of taxpayers;
e. Application for Installment Payment;
f. Other LN dockets recommended for cancellation/closure

by the investigating office, e.g., no discrepancy, etc.
5. Prepare and submit to AITEID the Monthly

Status/Accomplishment Report on Letter Notices within ten
(10) days following the close of each month, copy furnished the
ORD/OACIR-LTS.
6. Evaluate the protest of the taxpayer, either for reinvestigation or

reconsideration, on the PAN/FAN in accordance with the
provisions of RR No. 12-99.
a. If the protest is valid, refer the case to the investigating

office within five (5) days from receipt of the protest
letter for appropriate action on the request for
reinvestigation or reconsideration.
b. If the protest, however, is not valid, taxpayer shall be

informed in writing that his/her/its request for
reinvestigation or reconsideration has been denied and
the case shall be referred to the appropriate BIR office to
effect collection of the deficiency tax(es).
7. Receive the Monthly Collection and Status Report on Letter

Notices.
G. Legal Division/Prosecution Division
1. Receive from ORD/OACIR-LTS recommendation for issuance

of SDT on the following:
(a) For failure of the LN recipient to settle his/her/its tax

liabilities within five (5) days from receipt of the eLA
under certain situations and/or Notice for Informal
Conference, together with the Response to Findings;
(b) For failure of the LN recipient to comply with the
request for the submission of the soft copies of the SLP,
SLS and Annual Information Return of Creditable
Income Tax Withheld (Expanded)/Income Payments
Exempt from Withholding Tax (Form 1604-E) with the
Alphalist of Payees Subjected to Expanded Withholding
Taxes.
2. Receive from concerned taxpayer/s the documents required

through the SDT issued.
3. Forward to the investigating offices all documents submitted by

the taxpayer in compliance with the SDT.
4. Receive list of LN recipients who did not obey with the

summons contained in the SDT and file the appropriate criminal
cases for violation of Section 266 of the NIRC of 1997, as
amended.
H. Inspection Service
1. Receive from the OCIR the list of names of ROs who did not
comply with the 30-day resolution rule.
2. Send Show-Cause Order to the concerned RO who failed to

comply with the 30-day resolution rule.
3. Conduct the necessary investigation to determine the reason for

non-compliance with the 30-day resolution rule.
4. Impose the appropriate sanctions against any erring employee, if

warranted.
5. Submit to OCIR report of action taken on item 1 above within

fifteen (15) days after the close of each month. ICTacD
V. Transitory Provisions
1. The herein procedures shall be used in the resolution of issues on 2009

and 2010 LNs issued prior to the effectivity of this Order, if applicable.
2. The 2011 LNs shall use RELIEF-BOC LN (Annex "A-1") and TRS
LN (Annex "A-2") together with Details of Taxpayer's Customers'/Suppliers'
Records (DTCSR) (Annex "B-1") and/or Details of Importations with Return
Information Matching (DIRIM) (Annex "B-2"), and Details of Withholding
Agents/Payors and Payees/Income Recipients' Records (DWAPR) (Annex "B-3")
until such time that the new template for the consolidated LN (RELIEF-BOC-TRS
LN [Annex "A"]) is in place. If a taxpayer is issued RELIEF-BOC LN and TRS
LN, both LNs shall be handled by one and the same RO.
VI. Repealing Clause
All other issuances and/or portions thereof inconsistent herewith are hereby
repealed, modified or amended accordingly.
VII. Effectivity
This Order shall take effect immediately.
(SGD.) KIM S. JACINTO-HENARES

Commissioner
Bureau of Internal Revenue
ANNEX A
Quezon City
RELIEF-BOC-TRS LN No.
__________
TIN
_____________________________
Date
_____________________________
___________________
___________________
___________________
Sir/Madam :
A computerized matching conducted by the Bureau on information/data provided by third

party sources, Withholding Agents/Payors and Payees/Income Recipients against your
declarations per Income/VAT/Percentage returns disclosed the following discrepancy(ies)
for the taxable year ending ___________.
A. Sales
Per Summary List of Purchases submitted

by your customers (see attached
DTCSR) P____________
Sales per Quarterly VAT Returns filed ____________
Under-declaration on Sales P____________
Percentage (%) of Discrepancy __________%
B. Local Purchases
Per Summary List of Sales submitted by

your suppliers (see attached DTCSR) P____________
Domestic Purchases per Quarterly VAT
Returns filed ____________
Under-declaration of Local Purchases P____________
C. Importations
VAT Amount per BOC Data (see

attached (DIRIM) P____________
Input Tax on Importations per Quarterly
VAT Returns filed ____________
Discrepancy P____________
Under-declaration of Imported Purchases
(discrepancy divided by 12%) ____________
D. Agent-Taxpayer Reconciliation
In line with the Bureau's policy of affording taxpayers the opportunity to reconcile the
above discrepancy(ies), you are hereby invited to this Bureau _____________________
(address of office) on _________________________________ (should not be more than
five (5) days from receipt of the LN) from 8:00 a.m. to 12:00 noon, to present any
documentary evidence in connection therewith.
Should you agree with the findings of discrepancy(ies) stated above, you are
hereby directed to pay the resulting deficiency tax(es) using BIR Form No. 0611-A. The
computation of the deficiency taxes shall be based on the formula prescribed in BIR Form
No. _____________ (Computation Sheet[s]). However, if you opt to settle and pay your
tax liabilities within thirty (30) days from receipt hereof, you shall be entitled to the
abatement of the corresponding surcharge, interest and compromise penalty. Settlement
and payment of your tax liabilities beyond the said period shall be considered as a waiver
of such entitlement.
Any payment of deficiency taxes under this LN shall be credited against any additional
assessments that may be made by the appropriate BIR Office pursuant to an electronic
Letter of Authority (eLA) provided the discrepancies disclosed by said audit are of the
same nature as the above discrepancy(ies), if warranted. Furthermore, upon payment of
the taxes resulting from the aforesaid under-declaration(s)/discrepancy(ies), submit a
photocopy of the validated BIR Form No. 0611-A to the same office.
If, however, you have already paid the taxes due pursuant to an eLA before the receipt of
this letter, submit proof of such payment, together with the details of findings and
computation on the amount paid was arrived at, to the undersigned, Attention:
______________________ (RDO/(Chief LT Audit Division), at the soonest time possible
for us to ascertain whether or not the discrepancies disclosed in the audit are of the same
nature as the above discrepancies.
Should you fail to make a correct disclosure of sales/purchases and pay the corresponding
taxes due thereon within the deadline set above, we will be constrained to fully enforce
the provisions of the Tax Code of 1997, as amended, which, among others, provides that
under-declaration of sales, receipts and income is a ground for administrative, civil and/or
criminal action. Furthermore, Sec. 115 of the same Tax Code empowers the
Commissioner or his authorized representative to suspend business operations and
temporarily close the business establishment of any VAT-registered taxpayer found
understating his sales, receipts and income by thirty percent (30%) or more of its
corrected taxable sales, receipts and income for the taxable period.
You may call the BIR Hotlines at ___________________ (telephone number of office) for
further information.
We trust that this matter will merit your preferential attention.
Very truly yours,
KIM S. JACINTO-HENARES
Commissioner of Internal Revenue
Received by:
________________________
Signature over Printed Name
Title/Position:
_______________________
Date: _______________________
Refer to:
Revenue Officer ______________

Group Supervisor ______________
ANNEX A-1
Quezon City
RELIEF-BOC LN No. __________

TIN _________________________
Date ________________________
___________________
___________________
___________________
Sir/Madam :
A computerized matching conducted by the Bureau on information/data provided by third

party sources against your declarations per VAT returns disclosed the following
discrepancy(ies) for the taxable year ending ___________.
A. Sales
Per Summary List of Purchases submitted

by your customers (see attached
DTCSR) P____________
Sales per Quarterly VAT Returns filed ____________
Under-declaration on Sales P____________
B. Local Purchases
Per summary List of Sales submitted by

your suppliers (see attached DTCSR) P____________
Domestic Purchases per Quarterly VAT
Returns filed ____________
Under-Declaration of Local Purchases P____________
C. Importations
VAT Amount per BOC Data (see

attached (DIRIM) P____________
Input Tax on Importations per Quarterly
VAT Returns filed ____________
Discrepancy P____________
Under-declaration of Imported Purchases
(discrepancy divided by 12%) ____________
In line with the Bureau's policy of affording taxpayers the opportunity to reconcile the
above discrepancy(ies), you are hereby invited to this Bureau
_________________________ (address of office) on
_________________________________ (should not be more than five (5) days from
receipt of the LN) from 8:00 a.m. to 12:00 noon, to present any documentary evidence in
connection therewith.
Should you agree with the findings of discrepancy(ies) stated above, you are hereby
directed to pay the resulting deficiency tax(es) using BIR Form No. 0611-A. The
No. _______________ (Computation Sheet[s]). However, if you opt to settle and pay
your tax liabilities within thirty (30) days from receipt hereof, you shall be entitled to the
Any payment of deficiency taxes under this LN shall be credited against any additional
photocopy of the validated BIR Form No. 0611-A to the same office.
______________________ (RDO/(Chief, LT Audit Division), at the soonest time possible
Should you fail to make a correct disclosure of sales/purchases and pay the corresponding
taxes due thereon within the deadline set above, we will be constrained to fully enforce
the provisions of the Tax Code of 1997, as amended, which, among others, provides that
under-declaration of sales, receipts and income is a ground for administrative, civil and/or
criminal action. Furthermore, Sec. 115 of the same Tax Code empowers the
Very truly yours,
Received by:
________________________
Title/Position:
_______________________
Date: _______________________
Refer to:
Revenue Officer ______________

Group Supervisor _____________
ANNEX A-2
Quezon City
TRS LN No.:
___________
TIN:
__________________
Date:
_________________
___________________
___________________
___________________
Sir/Madam :
A computerized matching conducted by the Bureau on information/data provided by

Withholding Agents/Payors and Payees/Income Recipients against your declarations per
Income/VAT/Percentage returns disclosed the following discrepancy(ies) for the taxable
year ending ___________.
Agent-Taxpayer Reconciliation
In line with the Bureau's policy of affording taxpayer the opportunity to reconcile the
above discrepancy(ies), you are hereby invited to this Bureau
_________________________ (address of office) on
_________________________________ (should not be more than five (5) days from
receipt of the LN) from 8:00 a.m. to 12:00 noon, to present any documentary evidence in
connection therewith.
Should you agree with the findings of discrepancy(ies) stated above, you are hereby
directed to pay the resulting deficiency tax(es) using BIR Form No. 0611-A. The
No. _______________ (Computation Sheet[s]). However, if you opt to settle and pay
your tax liabilities within thirty (30) days from receipt hereof, you shall be entitled to the
Any payment of deficiency tax(es) under this LN shall be credited against any additional
photocopy of the Validated BIR Form No. 0611-A to the same office.
______________________ (RDO/(Chief, LT Audit Division), at the soonest time possible
Should you fail to make a correct disclosure of sales/receipts/income/purchases/expenses
and pay the corresponding taxes due thereon within the deadline set above, we will be
constrained to fully enforce the provisions of the Tax Code of 1997, as amended, which,
among others, provide that under-declaration of sales, receipts and income, as well as
violations on withholding tax rules and regulations, are grounds for administrative, civil
and/or criminal action. Furthermore, Sec. 115 of the same Tax Code empowers the
Very truly yours,
Received by:
________________________
Title/Position:
_______________________
Date : _______________________
Refer to:
Revenue Officer: ______________

Group Supervisor: ______________
ANNEX B-1
Details of Taxpayer's Customers'/Suppliers' Records
ANNEX B-2
Details of Importation with Return Importation Matching
ANNEX B-3
Details of Withholding Agents/Payors and Payees/Income Recipients Records
ANNEX C
Computation Sheet
ANNEX C-1
Computation Sheet
ANNEX C-2
Computation Sheet
ANNEX C-3
Computation Sheet
ANNEX C-4
Computation Sheet
ANNEX D
Payment Form
ANNEX E
Agreement Form
ANNEX F
Application for Installment Payment
ANNEX G
Request for Systems Access
ANNEX H
RDO/LT Audit Division/Assessment Division
ANNEX I
Taxpayers' Suppliers
(insert date)
(insert name, TIN and address of vendor/supplier)
The Bureau of Internal Revenue is currently conducting an LN investigation of the

income, value-added and/or percentage tax liabilities for the taxable year ending
________________ of __________________ (name), TIN: ______________,
__________________________ (address). Our database showed that you sold
goods/services to them, in the following quarters:
Qtr Non-VATable VATable Output VAT

Sales (Goods/ Sales Passed On
Services) (net of VAT)
1st __________________ _________________ ______________

2nd __________________ _________________ ______________
3rd __________________ _________________ ______________
4th __________________ _________________ ______________
TOTAL __________________ _________________ ______________
Please advise us in the space provided below whether the above figures are correct. If
there is/are any discrepancy(ies) in the sales amounts, please provide us with a statement
of the items comprising the discrepancy(ies).
If this Office does not receive any response from you within five (5) days from receipt of
this letter, we will consider the above sales amounts to be true and correct.
After affixing your signature and dating your reply, please submit or mail it directly to
___________________ (name of office), Attention: __________________________ (the
undersigned signatory), at _________________________ (address of office), telephone
number(s) _____________________.
Sincerely,
_______________________
RDO/Chief, LT Audit Division
To: RDO/Chief, LT Audit Division
Our records indicate that the above sales amounts to ______________________ are true
and correct.
Name and Signature: _______________________
Title/Position of Signatory: __________________
TIN: ____________________________________
Date: ____________________________________
Received By: ___________________

Title/Position: ___________________
Date Received: __________________
ANNEX I-1
Taxpayers' Suppliers
(insert date)
(insert name, TIN and address of vendee/customer)
The Bureau of Internal Revenue is currently conducting an LN investigation of the

income, Value-Added and/or Percentage Tax liabilities for the taxable year ending
________________ of __________________ (name), TIN: ______________,
__________________________ (address). Our database showed that you purchased
goods/services from them, in the following quarters:
Qtr Non-VATable VATable Input VAT

Purchases (Goods/ Purchases Claimed
1st __________________ _________________ ______________

2nd __________________ _________________ ______________
3rd __________________ _________________ ______________
4th __________________ _________________ ______________
TOTAL __________________ _________________ ______________
Please advise us in the space provided below whether the above figures are correct. If
there is/are any discrepancy(ies) in the purchase amounts, please provide us with a
statement of the items comprising the discrepancy(ies).
If this Office does not receive any response from you within five (5) days from receipt of
this letter, we will consider the above purchase amounts to be true and correct.
After affixing your signature and dating your reply, please submit or mail it directly to
___________________ (name of office), Attention: __________________________ (the
undersigned signatory), at _________________________ (address of office), telephone
number(s) _____________________.
Sincerely,
_______________________
To: RDO/Chief, LT Audit Division
Our records indicate that the above purchase amounts from ______________________
are true and correct.
Name and Signature: _______________________

Title: ____________________________________
TIN: ____________________________________
Date: ____________________________________
Received By: ___________________

Title/Position: ___________________
Date Received: __________________
ANNEX J
For Taxpayer's Supplier
Sworn Statement
I,____________________ (Name), TIN: __________, _______________

(Owner/Position) of _________________________ (Registered Name of Taxpayer's
Supplier), TIN: __________, _________________________ (address) after having been
duly sworn to in accordance with law, hereby depose and state that:
1. ____________ (Taxpayer's Supplier) sold goods/services to

__________________ (Registered Name of Taxpayer Issued LN),
TIN: _________________,
______________________________________ (address) for taxable
year ending ________________ as follows:
Qtr Non-VATable VATable Sales Output VAT

Purchases (Goods/ (Goods/Services) Declared
1st __________________ _________________ ______________

2nd __________________ _________________ ______________
3rd __________________ _________________ ______________
4th __________________ _________________ ______________
TOTAL __________________ _________________ ______________
2. ________________ (Taxpayer's Supplier) has declared the output

taxes on the aforesaid sales and the same are covered by a duly issued
by VAT invoices/receipts.
3. The aforesaid sales were included in the Quarterly Summary List of

Sales (SLS) submitted by ____________________ (Taxpayer's
Customer) to the Bureau of Internal Revenue pursuant to Revenue
Regulations (RR) No. 7-95, as amended by RR Nos. 13-97, 7-99,
8-2002 and 16-2005.
_________________________________
Registered Name of Taxpayer's Supplier
_________________________________
(Signature Over Printed Name)
President/Chief Finance Officer/Owner
SUBSCRIBED AND SWORN to before me, this ____ day of ___________,

200__, at ________________, affiant exhibiting to me his/her Community Tax
Certificate, as follows:
Name CTC Number Date of Issue Place of Issue

______________ ____________ ______________ ________________
______________ ____________ ______________ ________________
NOTARY PUBLIC
Doc. No. _______

Page No. _______
Book No. ______
Series of 20_____
ANNEX J-1
For Taxpayer's Customer
Sworn Statement
I,____________________ (Name), TIN: __________, _______________

(Owner/Position) of _________________________ (Registered Name of Taxpayer's
Customer), TIN: __________, _________________________ (address) after having been
duly sworn to in accordance with law, hereby depose and state that:
1. ___________________ (Taxpayer's Customer) purchased
goods/services from _________________________ (Registered
Name of Taxpayer Issued LN), TIN: _________________,
______________________________________ (address) for taxable
year ending ________________ as follows:
Qtr Non-VATable VATable Input VAT

Purchases (Goods/ Purchases Claimed
Services) (Goods/Services)
(net of VAT)
1st __________________ _________________ ______________
2nd __________________ _________________ ______________
3rd __________________ _________________ ______________
4th __________________ _________________ ______________
TOTAL __________________ _________________ ______________
2. ________________ (Taxpayer's Customer) has claimed the input

taxes on the aforesaid purchases and the same are duly supported by
VAT invoices/receipts issued by ______________________
(Registered Name of Taxpayer).
3. The aforesaid purchase were included in the Quarterly Summary List

of Purchases (SLP) submitted by ____________________
(Taxpayer's Customer) to the Bureau of Internal Revenue pursuant to
Revenue Regulations (RR) No. 7-95, as amended by RR Nos. 13-97,
7-99, 8-2002 and 16-2005.
_________________________________
Registered Name of Taxpayer's Customer
_________________________________
(Signature Over Printed Name)
SUBSCRIBED AND SWORN to before me, this ____ day of ___________,

200__, at ________________, affiant exhibiting to me his/her Community Tax
Certificate, as follows:
Name CTC Number Date of Issue Place of Issue

______________ ____________ ______________ ________________
______________ ____________ ______________ ________________
NOTARY PUBLIC
Doc. No. _______

Page No. _______
Book No. ______
Series of 20_____
ANNEX K
Follow-Up Letter
Date: ____________
__________________
__________________
__________________
TIN: ______________
Dear Sir/Madam,
Subject: RELIEF-BOC LN No. ________________ and/or

TRS LN No. _________________
We refer to the above Letter Notice/s informing you of the discrepancy resulting
from the Reconciliation of Listing for Enforcement Summary Lists of Sales and
Purchases (RELIEF), Third Party Matching Bureau of Customs (BOC) Data Program
and/or Tax Reconciliation System (TRS) as declared in your tax returns filed for taxable
year ending __________.
To date, you have not taken any positive action to refute the validity of our
finding/s and/or present any documentary evidence to reconcile the variances so indicated
therein. We made it clear to you that your failure to respond within five (5) days from
receipt hereof will consider you in default and, as a matter of course, the Bureau shall
conduct an appropriate review of the case and cause the issuance of Notice for Informal
Conference/electronic Letter of Authority, Preliminary Assessment Notice (PAN) or Final
Assessment Notice (FAN), and other remedies provided for by law, rules and regulations.
Please consider this letter as reminder and final notice to you that there has been a
previous finding upon which we will base our forthcoming review/assessment.
Henceforth, any further inaction on your part or after the lapse of ten (10) days after
receipt hereof we do not hear from you is deemed as an admission to the validity and
accuracy of the discrepancy indicated in the subject LNs.
You are hereby accorded the last chance to settle at the soonest time possible the
basic taxes (income, VAT and/or percentage) without the corresponding surcharge,
interests and compromise penalty accruing on the aforementioned LNs on the condition
that herein payment, using BIR Form No. 0611-A, shall be paid within thirty (30) days
from receipt of subject LNs. The same shall be considered an advance deficiency tax
payment and therefore without prejudice to any additional assessment that might be made
by the appropriate BIR Office on subsequent issuance of an electronic Letter of Authority
provided the discrepancies disclosed by said audit are of the same nature as the
discrepancies reflected in the LNs.
If, however, payment has been made before the receipt of this letter, please submit
proof of such payment to the undersigned, together with the details of findings and
computation on how the amount paid was arrived at.
Your prompt action is hereby enjoined.
Very truly yours,
____________________________
RDO/Head, LT Audit Division
Received by:
__________________________________
Signature over Printed name of Taxpayer/
Authorized Representative/Tax Agent
__________________________________
Title/Position or Signatory
__________________________________
Contact #
__________________________________
Date Received
ANNEX L
Date ____________
Notice for Informal Conference
Name of Taxpayer
Address
TIN:
Sir/Madam :
Please be advised that the report of investigation of your income, value-added

and/or percentage tax liabilities for taxable year ending ____________ under
RELIEF-BOC/TRS LN No(s). _____________________________ dated ____________,
assigned to _________________ was already submitted for appropriate action. The
deficiency taxes as per Computation Sheets _______________________ ("C", "C-1",
"C-2", "C-3" and "C-4") are hereto attached for easy reference. DHECac
Pursuant to the provisions of Section 228 of the National Internal Revenue Code
of 1997, as amended, which requires this Office to notify you of the above findings of
your tax liabilities, and to enable you to present your side of the case, you are requested to
appear for an informal conference at the Office of ___________________,
______________________ (Address), within five (5) days from receipt of this notice.
Kindly bring the necessary documents in order for us to properly evaluate the merit of
your case. In this conference, you may be represented by your duly authorized
representative or tax agent and assisted by your counsel who should be authorized in
writing if you cannot come personally. If you agree to the findings, or if you choose to file
your objections thereto, or take other courses of action, you may forego this conference
and instead, you may accomplish the enclosed Response Form by checking the applicable
item of your choice and submit the same within five (5) days after receipt hereof.
We shall appreciate your preferential attention on this case. Your failure to appear
on the scheduled date of conference without prior notice to us, or if the enclosed
Response Form is not accomplished by you, we shall presume that you have waived your
right to a preliminary conference and that you have opted to file no objections at this
level. Accordingly, the report on your case, on the basis of the findings per our
investigation, shall be submitted to higher authorities for review and proper disposition.
Very truly yours,
__________________________
ANNEX L-1
Response to Findings Pursuant to Section 228 of NIRC of 1997, as Amended
The RDO/Chief, LT Audit Division
Sir/Madam:
This refers in reference to your verification of income, value added and/or

percentage tax liabilities covering taxable year ending __________ under LN No(s).
__________ and/or _____________ dated ______________, please be informed that
after you have afforded us the opportunity to evaluate the basis of your findings, and the
resulting proposed tax deficiency assessment thereon are as follows:
Basic Surcharge Interest Compromise Total

Deficiency (if applicable) penalty
_________ ____________ ____________ _________ ___________ _____
_________ ____________ ____________ _________ ___________ _____
_________ ____________ ____________ _________ ___________ _____
Grand Total ____________ ____________ _________ ___________ _____
In view thereof: (Check applicable action)
[] A. I/We fully subscribe to the findings, and I/We agree to pay the
deficiency taxes, including increments thereon, in accordance with
the above proposed assessments, within the period that I/We shall be
required to pay the same.
[] B. I/We do not subscribe to the findings:
[] 1. Will file a protest, as soon as the assessments notice/s shall

have been received by me/us.
[] 2. My/Our position paper is enclosed, without prejudice to

submission of additional documents/paper on the matter as
warranted.
[] C. I/We shall take the proper courses of action as soon as the notice/s
of assessment/s hereon will have been received by me/us.
[] D. I/We shall avail of other administrative and legal remedies

provided by existing laws, rules and regulations.
_______________________________
Signature Over Printed Name of
Name of Company: _______________
TIN: ___________________________
Endnotes
1 (Popup - Popup)
Annex A
Annex A-1
Annex A-2
Annex B-1
Annex B-2
Annex B-3
Annex C
Annex C-1
Annex C-2
Annex C-3
Annex C-4
Annex D
Annex E
Annex F
Annex G
Annex H
Annex I
Annex I-1
Annex J
Annex J-1
Annex K
Annex L
Annex L-1

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March 29, 2012

REVENUE MEMORANDUM ORDER NO. 013-12

SUBJECT : Revised Guidelines and Procedures in Handling Letter

TO : All Internal Revenue Officers and Others Concerned

This Order is issued to simplify guidelines, procedures and minimize

Reconciliation of Listing for Enforcement System Summary

Bureau of Customs Data Program (BOC); and

Tax Reconciliation System (TRS).

1. As provided for under existing Revenue Memorandum Orders (RMOs)

4. If there is an on-going audit/investigation pursuant to an electronic

5. If an eLA is terminated before an LN is issued, the investigating office

6. The deficiency income, value-added and/or percentage taxes shall be

7. Taxpayer shall be entitled to abatement of surcharge, interest and

8. Installment payment shall be allowed as settlement of the tax

9. The Revenue District Officer (RDO)/Chief, LT Audit Division shall

10. RMC No. 40-2003 provides that LN issued to taxpayers can be

11. The settlement and payment of the deficiency tax(es) under an LN or

12. The AD and concerned Office of the Head Revenue Executive

a) Issuance of eLA under certain situations and/or Preliminary

b) Imposition of administrative sanction of suspension and

c) Issuance and enforcement of the Subpoena Duces Tecum (SDT)

14. A Revalida Committee in the National Office shall be created to be

15. For LN originally assigned (with eLAs [either the investigation is

16. Activities and accomplishments of the investigating offices relative to

IV. Guidelines and Procedures

A. Office of the Commissioner of Internal Revenue

1. Determine the parameters and set the discrepancy threshold for

2. Set the KPI of a given taxable year on LN performance by the

3. Receive from AITEID the original copies of the LNs, together

a. Taxpayers enjoying tax exemption under Section 30

b. Taxpayers whose total sales or receipts is classified as

c. Government agencies and instrumentalities except

4. Receive from the ORD/OACIR-LTS the consolidated lists of

5. Monitor all activities and accomplishments of the concerned

B. Information Systems Group

B.1 Data Warehouse Team (DWT)

1. Activate the processes needed for LN generation based on the

2. Transmit electronically to investigating offices the generated

3. Transmit electronically to the ORD/OACIR-LTS the details of

4. Segregate and forward to AITEID the original copies of the

5. Receive from ORD/OACIR-LTS request for generation of

6. Receive from AITEID the following:

a. Lists of LNs of taxpayers classified under item IV (A.3)

b. Original copies of the LNs, together with the

7. Regenerate LNs, together with the DTCSR/DIRIM/DWAPR, of

B.2 Security Management Division (SMD)

1. Receive from the investigating offices and

2. Provide system access rights and privileges to the LN portal

C. Audit Information Tax Exemption and Incentives Division

1. Receive from DWT the electronic copy of the master list of

2. Receive from DWT and investigating offices the original copies

3. Receive from investigating offices the original copies of LNs,

4. Receive from investigating offices/AD/concerned OHREA-LTS

5. Update status of LNs in the LN masterlist based on the Monthly

6. Transmit to OCIR the original copies of the LNs, together with

7. Transmit to DWT the following:

a. Lists of LNs of taxpayers classified under IV (A.3)

b. Original copies of LNs, together with the

8. Prepare the following consolidated reports based on

b. Assessment and collection;

c. KPI on LN performance (e.g., 80% served, 50% under

9. Provide top management with the data and reports as may be