Law Summary

Overview

This document supplements and amends Revenue Memorandum Order No. 32-92 dated August 7, 1992, regarding the guidelines and procedures for processing tax credit/refund of excess withholding tax/overpayment of individual income tax for 1991. It specifically addresses BIR Form Nos. 1701 (for individuals with income from business/profession and compensation) and 1701A (for individuals with compensation income only).

Guidelines for Processing Tax Credit/Refund

• Employee Requirements:

  • Employees whose second installment payments were recomputed must present the Authority to Accept Payment (ATAP) to their employers.
  • Late-filed refundable 1701A returns will be accepted, but penalties for late filing will apply.

• Employer Responsibilities:

  • Employers must recompute excess tax payments and attach the ATAP to the relevant income tax returns (ITRs).
  • Employers are required to stamp recomputed ITRs with specific notations indicating the recomputation under R.A. 7167.

• ITR Verification:

  • Lost ITRs must be replaced with certified true copies from the respective Revenue District Office (RDO).
  • Both spouses must submit their ITRs if they filed separately to ensure only one claims the additional exemption for children.

Claims for Refund

• Employees not included in the Amended Alpha List must file a written claim for refund with their ITR and an employer certification stating their exclusion.
• RDO will verify claims and recompute tax due based on submitted ITRs.

Processing by RDO

• Upon receiving the Amended Alpha List of Employees, the RDO must:
  • Verify the completeness of documents and correctness of claims.
  • Assess withholding agents for unpaid amounts due to under-withholding.
  • Process and transmit all relevant ITRs and claims for refund.

Amendments to Existing Policies

• Refund Claims for Separated Employees:

  • Employees who have separated from their previous employers must submit their ITRs for recomputation of excess tax payments.
  • Those no longer employed should submit written claims for refunds directly to the RDO.

• Credit for Adjusted Refundable Cases:

  • Employers may credit adjusted refundable amounts against future tax withholdings starting September 1992, with an option for immediate refunds to employees.

Repealing Clause

• This Order repeals or amends any inconsistent previous issuances.

Effectivity

• The Order is effective immediately upon adoption on September 11, 1992.

Key Takeaways

• Employers are responsible for ensuring proper documentation and recomputation of employee taxes.
• Employees must present necessary documentation for tax credit/refund claims.
• The RDO has distinct verification responsibilities to ensure compliance with the updated guidelines.
• Both employers and employees have specific obligations regarding claims for refunds, particularly in cases of separation or late filings.