BIR mulls schemes to ease delinquent estate tax payment

Posted on 10:22 PM, April 28, 2010 [ BusinessWorld Online ]

THE BUREAU of Internal Revenue (BIR) is considering schemes to facilitate the payment of delinquent estate taxes on properties of deceased loved ones.

Internal Revenue Commissioner Joel L. Tan-Torres said in an interview Wednesday night that the agency is mulling reducing penalties for those who would avail of the agency’s Rest in Peace (RIP) project.

"These are long and unpaid taxes so the problem of the heirs is that they don’t have money to pay given penalties. We are looking if we can reduce penalties or allow them to pay on installment basis or even allow them to sell their properties on the condition they will pay taxes," he said.

Project RIP was launched last February as part of the efforts to improve revenue collection. The project was launched as estate tax returns filed for the past years have been low.

BIR statistics showed only 29,198 estate tax returns were filed in 2007 with tax collections amounting to P649.9 million, 29,863 filed in 2008 with tax collections worth P854.9 million and 26,811 estate tax returns filed in 2009 with collections amounting to P876.8 million.

Data from the National Statistics Office, however, showed that there were 415,271 deaths in 2005 and 389,081 in 2006.

Mr. Tan-Torres said with the project in place, the BIR would be able to monitor or determine cases or records of death from sources of information such as civil registry, cemeteries, obituaries, funeral parlors and hospitals.

"Using that information, we will be the one to approach them [heirs] because in our experience in the past, even though there’s a death, the heirs do not file the returns so we will be the one to remind the heirs that they have to do this," he said.

In some cases, Mr. Tan-Torres said, the estate taxes have not been filed and paid for ten years so the tax due would be costly.

He noted that the nonpayment of estate taxes has a 25% surcharge and 20% interest per year.

"Depending on the feedback from our offices, we will look at how we can do this [scheme]," he said, adding only the penalties could be dropped but the estate taxes due would still have to be paid.
Asked how much the BIR expects to lose from condoning the penalties, he said that the agency has yet to come up with an estimate.
Mr. Tan-Torres earlier said the agency expects to collect P10.7 billion from Project RIP.
The BIR, he added, may issue a memorandum on the subject sometime in April.
The BIR is tasked to collect P830 billion this year. The agency’s collections as of the first quarter totaled P173.9 billion, exceeding its P157.7 billion goal for the period. -- Louella D. Desiderio

BIR issues guidelines for designation of private appraisers

BIR issues guidelines for designation of 
private appraisers

The BIR has issued the policies and guidelines in the recruitment and designation of private appraiser members to the Regional Executive and Technical Committees on real property valuation.

Under Revenue Memorandum Order No. 40-2010, dated April 23, 2010, the BIR issued the procedures and guidelines on the involvement of private real estate appraisers to the Regional and Technical Committee which also prescribes the responsibilities of the Committee Chairmen to secure a list of  realty service organizations such as, but not limited to, the following:
  1. Philippine Association of Realty Appraisers (PARA);
  2. Institute of Philippine Real Estate Appraisers, Inc. (IPREA);
  3. Philippine Association of Realtor Board, Inc. (PAREB);
  4. Chamber of Real Estate Builders Association, Inc. (CREBA);
  5. Philippine Council of Real Estate Educators, Inc. (PHILCORE); and
  6. Other associations recognized by the Realty Service Council of the Philippines (RESCOP) as the consultative body of the Department of Trade and Industry (DTI).


BIR Identifies In-House Experts

BIR Identifies In-House Experts

Quezon City, 06 April 2010 – In order to improve the voluntary tax compliance and enhance the taxpayer servicing and enforcement capability of the Bureau of Internal Revenue (BIR), a program called the “Industry Champion Program” has been implemented through the issuance of Revenue Memorandum Order (RMO) No. 24-2010.

Under the program, several task forces were formed to provide BIR Revenue Officers or so-called Industry Champions with in-depth expertise and specialization that will enable them to better identify tax issues affecting the taxability and compliance of said industries.

The Industry Champions are expected to know the taxpayers/stakeholders comprising the industry or sector, and also other relevant factors such as clientele/suppliers/associations of taxpayers in the industry; government offices regulating the taxpayers in the industry/sector; industry developments and its work environment; and industry strengths, weaknesses, opportunities and threats/risks.

The Industry Champions shall be the principal BIR officials who shall be responsible for the development and dissemination of expertise and issues on identified industries and sectors. They shall also be tasked to work with experts from the private sector, other government regulators, and industry players/associations; monitor industry events and developments; establish industry benchmarks and standards to be used in the Bureau's administration and enforcement activities; come up with reports on audit issues/inputs for the communication of tax issues and developments to stakeholders; conduct training of BIR personnel; and organize task forces to conduct selective industry audit and investigations on a need basis as approved by the Commissioner of Internal Revenue.

In the process, Industry Champions will be responsible in addressing outdated revenue issuances and rulings that need modification through issuance of new regulations and guidelines.

The initial list of industries included in the program are Banking and Insurance, Telecommunications, Power, Petroleum, Cement, Shipping, Fishing, Health Maintenance Organizations, Semiconductors, Business Process Outsourcing, Mining, Real Estate, Education/Training Institutions, Show business and Entertainment, Travel and Tourism, Foundations, Enterprises enjoying tax incentives, and Professionals (including lawyers, doctors, Certified Public Accountants and architects).

(original signed)
Please refer to: REYMARIE T. DE LA CRUZ, Chief, TIED, 9243245
(original signed)
Approved for Release: AIDA S. SIMBORIO, OIC-Assistant Commissioner, TAS

Revenue Regulations (RRs)
are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes

Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.
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