Tax Alert

(Revenue Memorandum Order No. 09-2006, as amended by Revenue Memorandum Order No. 22-2018, and Revenue Memorandum Order No. 31-2003)

This Tax Alert is issued to remind taxpayers of the usual compliance check conducted by the BIR during tax mapping.  

With the recent lifting of the suspension of the issuance of Mission Orders (MOs) authorizing Revenue Officers to conduct Tax Compliance Verification Drive (TCVD), the BIR has beefed up its enforcement efforts to ensure that taxpayers are compliant with BIR rules and regulations.  

Once businesses register with the BIR, they are expected to be aware of their obligations as taxpayers in their daily operations. The TCVD, also known as tax mapping, is an enforcement program by the BIR to identify the registration compliance of entities or business establishments.  

Although tax mapping does not involve a thorough examination of books of accounts and other accounting records but is merely a verification of compliance with basic administrative regulations, BIR Revenue Officers nevertheless need to check the following: 

1. Taxpayer’s Certificate of Registration (BIR Form No. 2303) along with related updates thereto posted in a conspicuous place; 
2. Payment of annual registration fee (BIR Form No. 0605) posted in a conspicuous place; 
3. Notice to the Public/Ask for Receipt signage (valid until 30 June 2023) or the new Notice to Issue Receipt/Invoice (NIRI) signage posted in a conspicuous place; 
4. Authority to print receipts and invoices, issuance of such receipts and invoices of every sale of services and goods, and contents of receipts and invoices under the rule on invoicing requirements; 
5. Registration of cash register machines (CRM), point-of-sale (POS) machines, and computerized accounting system (CAS), or other similar devices (if any); 
6. Registration of books of accounts or BIR approval of loose-leaf books of accounts; 
7. Compliance with bookkeeping regulations including updated recording of transactions; and 
8. Display of registration notices and other related requirements. 

After inspecting the above items, the Revenue Officer shall list down all violations in a Violations Checklist, accomplish the Taxpayers' Information Sheet (TIS), and explain to the taxpayer the nature of the violations committed and the basis therefor. If the taxpayer believes that the listed violations are not justified, then it shall explain its side for the consideration of the Revenue Officer. 

The taxpayer will then be asked to pay the compromise penalties based on the violations noted in the tax mapping operation. If the taxpayer does not respond or fails to pay the penalties, the BIR will issue a Second Opportunity Notice (SON) and a last Opportunity Notice (LON) before ultimately filing the appropriate criminal charges before the Prosecutor’s Office for the said violations.