QuestionsQuestions (BIR MEMORANDUM ORDER NO. 35-95)
RMO 35-95 prescribes procedures and guidelines for the proper disposition/write-off of uncollectible accounts receivable, provides for monitoring of accounts receivable, and clarifies the delineation of functions in cancellation and disposition.
It covers accounts receivable that could no longer be collected for various reasons, including cases where the taxpayer is deceased with no assets, abroad with no Philippine assets, insolvent, unknown whereabouts, dissolved corporations with no officers, accounts uncollected after prescribed periods, prescribed under the Tax Code and decisions, and certain tax amnesty cases certified but not closed.
It includes write-off where the taxpayer is deceased leaving no distrainable and leviable assets, requiring documentary proof such as certifications from registers of deeds/assessors where the taxpayer is believed to own real properties and a copy of the death certificate.
A certification from at least three different Registers of Deeds or provincial/city/municipal assessors where he is believed to own real properties; certification of at least three banks within the vicinity of the taxpayer’s residence where he is known to have deposits; and a certification for his last known address from the Professional Regulations Commission or the Supreme Court and other pertinent agencies that supervise the taxpayer’s profession (if the taxpayer is a professional).
Secure a copy of the Articles of Incorporation and the latest financial statement from the Securities and Exchange Commission.
The Revenue Officer must perform appropriate tasks related to the questions in the Fieldman’s Affidavit of Uncollected Taxes and include the duly accomplished affidavit as part of the accounts receivables docket along with the recommendation and the ATCA.
The Revenue Officer prepares the recommendation together with the ATCA, and ensures the Fieldman’s Affidavit of Uncollected Taxes is duly accomplished and included in the docket.
After the Revenue Officer secures documents and prepares the recommendation/ATCA, the Revenue District Officer forwards the docket for signature to the Head, Collection Unit and the Assistant Revenue District Officer.
The Assessment Division forwards/acts under the approval process pursuant to RMO 37-94. Specifically, the Revenue District Officer forwards the docket to the Assessment Division for approval pursuant to RMO 37-94 after signing the recommendation and the ATCA.
It forwards the docket with approved recommendation and ATCA to the Administrative Division for file and future reference, and prepares a Monthly List of Accounts Cancelled by ATCA (BIR Form No. 1247) signed by the Chief of the Assessment Division.
Original and Duplicate go to the Deputy Commissioner for Operations thru ACIR Collection, Attention: The Chief, Collection Programs Division; Triplicate goes to the Revenue District Officers concerned to update their inventory; Quadruplicate is filed.
It takes effect immediately after its approval.
Accounts receivable remain uncollected for a period of two (2) years after the lapse of the three (3) year mandatory period to collect.
It includes accounts receivable overtaken by prescription as provided for under the Tax Code and court decisions.
It includes cases where the taxpayer availed of previous tax amnesties as duly certified by the Tax Amnesty Implementation Office but which were not closed by ATCA.
It amends RMO 40-87 and all other existing issuances or portions thereof inconsistent with RMO 35-95.