Question & AnswerQ&A (BIR MEMORANDUM ORDER NO. 35-95)
The primary objective is to prescribe procedures and guidelines for the proper disposition of accounts receivables that are deemed uncollectible, and to ensure accurate monitoring and clear delineation of functions regarding these accounts.
Accounts are covered if the taxpayer is deceased without distrainable assets, residing abroad without assets, declared insolvent, foreign nationals who left after a project, whereabouts unknown without assets, dissolved corporations with paid-up shares and untraceable officers, accounts uncollected for two years after a three-year collection period, prescribed by law, or previously amnestied but not closed by ATCA.
The officer must secure certification from at least three different Registers of Deeds or the Provincial, City or Municipal Assessors where the taxpayer is believed to own property, and certification from at least three banks near the taxpayer’s last known residence regarding any bank deposits.
A copy of the Articles of Incorporation and the latest financial statement from the Securities and Exchange Commission must be secured.
It is a sworn affidavit containing information about the efforts made to collect taxes and reasons for non-collection, which forms part of the accounts receivable docket for each case recommended to be written off.
The recommendation and ATCA must be signed by the Revenue District Officer and go through the Head of the Collection Unit and the Assistant Revenue District Officer before forwarding.
The Assessment Division approves the recommendation and ATCA pursuant to RMO 37-94 and forwards the docket to the Administrative Division for filing and reference.
It is a list of accounts cancelled under the order, prepared monthly and duly signed by the Chief of the Assessment Division. It is distributed to various offices for record updating and reference.
This Order amends Revenue Memorandum Order 40-87 and any other issuances or portions thereof inconsistent with this Order.
It took effect immediately after its approval on October 20, 1995.