Filed tax returns with no or partial payment to be tagged as delinquent subject to penalty

The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular No. 7-2023, which provides guidelines on Return Processing System (RPS) assessments, identifying all tax returns that are:

1. Filed late but no corresponding penalties were paid;
2. Filed with declared tax due but no corresponding payment was detected; or
3. Filed with declared tax due but payment detected was only partial.

RPS assessments are not tax assessments arising from the conduct of audit or investigation of taxpayers’ books of accounts and other relevant records, but rather, are tax payables based on the taxpayers’ own tax declarations as reflected in their respective tax returns, which are considered as delinquent accounts, pursuant to Revenue Memorandum Order No. 11-2014.

RPS assessments are deemed collection letters and are not letters of authority, as no books of accounts and accounting records of taxpayers are examined or subjected to audit. Further, collection letters are considered part of civil and administrative remedies of the BIR under Section 205 of the Tax Code, as amended.

Please be guided accordingly.

Source:

P&A Grant Thornton

Certified Public Accountants

P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.

As published in SunStar Cebu, dated 02 February 2023