(Revenue Memorandum Circular No. 7-2023, issued on January 17, 2023)
This Tax Alert is issued to inform all concerned taxpayers on the clarifications regarding Bureau of Internal Revenue (BIR)’s notice to taxpayers labelled as “RPS Assessment.”
The Return Processing System (RPS) is BIR’s information system which processes tax returns filed by the taxpayers. It is designed to detect any of the following scenarios:
a. a tax return filed late, but no corresponding penalties were paid;
b. a tax return filed with declared tax due, but no corresponding payment was detected; or
c. a tax return was filed with tax due, but the payment detected was only partial.
Once the system detects any of the above scenarios, it will generate an “RPS Assessment.”
The moment the taxpayer fails to pay the declared tax payable in the tax return within the prescribed due date, as described in the above scenarios, the BIR already considers it as “delinquent account” pursuant to Revenue Memorandum Order (RMO) No. 11-2014. Hence, the BIR may send notices to taxpayers, labelled as RPS Assessment, as part of the BIR’s civil/administrative remedies to collect such delinquent accounts.
It was clarified also by the BIR that an RPS Assessment is not an Assessment Notice arising from audit where the taxpayer has the chance to contest or protest. Considering that no books of accounts and accounting records are to be examined or subjected to audit, the issuance of a Letter of Authority (LOA) shall not be required for the sending of an RPS Assessment notice by the BIR.
However, the RPS Assessment sent is a Collection Letter of the BIR.
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