Question & AnswerQ&A (BIR REVENUE MEMORANDUM CIRCULAR NO. 17-90)
The objective is to update the Schedule of Compromise Penalties to increase penalties, delete certain acts from coverage to prevent tax evasion, reflect changes in the Schedule including Code Sections and penalties, adopt uniform application of compromise penalties for criminal violations of the Tax Code, and provide guidelines for both resident and non-resident taxpayers.
No, certain acts/violations applicable to non-resident taxpayers are imposed the same amount of compromise penalty as resident taxpayers.
No, compromise penalties shall not differ from the specified amounts except when approved by the Commissioner or, in proper cases, the Regional Directors.
Compromise penalties should be itemized separately from other administrative penalties such as surcharge and interest and should appear as a suggestion to pay instead of criminal prosecution. They should not form part of the total amount assessed or demanded.
No, payment of compromise penalties is voluntary. If a taxpayer refuses to pay, the case shall be referred for criminal prosecution.
Non-resident taxpayers shall pay the amount in pesos or its equivalent in U.S. dollars, following the prescribed uniform exchange rate.
Willful attempt to evade or defeat any tax (Section 253) and misrepresentation as to actual filing or withdrawal of return already filed (Section 254(e)) cannot be compromised because they involve fraud.
The penalty ranges from P200 to P25,000 depending on the unpaid tax amount, with specific amounts increasing as the amount of tax unpaid increases.
The compromise penalty for such violation under Section 274 is P1,000.
No, violations involving unlawful divulgence or publication of confidential taxpayer information under Section 277 should not be compromised as it is against public policy, unless authorized by law.