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Tax Notes

Civil remedies for collecting Accounts Receivable/ Delinquent Accounts

THE Bureau of Internal Revenue (BIR) issued on July 18, 2019 Revenue Memorandum Order (RMO) 35-2019 in relation to the Civil Remedies for the Collection of Accounts Receivable/Delinquent Account.

Currently, Revenue Officers who are tasked to collect Accounts Receivable/Delinquent Accounts must follow the Collection Manual prescribed under RMO 28-2012. However, the BIR deems that the current approach to collection no longer offers substantial enhancement to collection. Thus, the BIR initiated a revision to certain policies.

Any concerned office would await the receipt of the “Form 40-Collectible” relative to the following:

1. List of Unpaid Revenues (Annex “A”) – These are self-assessed taxes, unpaid second installment of income tax due and duly validated unpaid tax due per tax returns

2. List of Unpaid Tax Assessments (Annex “B”) – Final and executory tax assessments

Once the concerned office receives the reports listed above, it will validate if the applicable fields in the said reports are completely filled out. Once validated, civil remedies under Section 205 of National Internal Revenue Code (NIRC) will be immediately pursued. Section 205 states that the BIR may collect through distraint of goods, chattels, or effects, and other personal property and by levy upon real property and interest in rights to real property or through civil or criminal action.

The Preliminary Collection Letter and the Final Notice Before Seizure will no longer be sent to delinquent tax payers. The Warrant of Distraint and/or Levy will be immediately issued. This new policy would expedite collection and provide more weight to the urgency of collection.

Source: P&A Grant Thornton Certified Public Accountants


As published in SunStar Cebu, dated 23 July 2019