Law Summary

I. Objectives

This section outlines the primary goals of the surveillance activities mandated by the Bureau of Internal Revenue (BIR) to ensure compliance with tax laws.

• Legal Principle: Establish a prima facie basis for assessing internal revenue tax liabilities under Section 6(c) of the National Internal Revenue Code (NIRC) of 1997.
• Key Definitions:
  • Prima Facie: Presumption of correctness in tax assessments based on collected evidence.
• Important Requirements:
  • Establish correct tax amounts using admissible evidence.
  • Validate the information provided by informants.
  • Report surveillance activities.
• Consequences: Ensures substantial revenue loss is addressed through proper tax assessment.

II. Coverage

This section specifies who and what is subject to surveillance under this Order.

• Legal Principle: Surveillance applies to individuals or entities that violate tax declarations and filing obligations.
• Key Definitions:
  • Natural or Juridical Persons: Individuals or legal entities subject to taxation.
• Important Requirements:
  • Target individuals failing to declare correct income or issue official receipts.
  • Include those who file false returns or fail to register with BIR.
• Consequences: Non-compliance may lead to tax assessments and penalties.

III. Policies

This section describes the types of surveillance and the procedural framework for conducting surveillance.

• Legal Principle: Defines surveillance types and mandates the issuance of Mission Orders (MOs).
• Key Definitions:
  • Covert Surveillance: Undercover observation without the subject's knowledge.
  • Overt Surveillance: Official monitoring where the subject is informed.
  • Short Duration Surveillance: Brief checks for primary registration compliance.
• Important Requirements:
  • MOs must be requisitioned and recorded.
  • Surveillance teams composed of at least two officers must be established.
  • Overt surveillance has a minimum period of 10 days, extendable to 30 days.
• Timeframes: Weekly progress reports are required during surveillance.
• Consequences: Findings can lead to tax assessments based on surveillance data.

IV. Procedures

This section outlines the steps to be followed before and during surveillance.

• Legal Principle: Establishes a structured approach for conducting surveillance.
• Key Definitions:
  • Implementing Officers: Revenue officers, intelligence officers, and investigators conducting surveillance.
• Important Requirements:
  • Preliminary information gathering is essential before surveillance initiation.
  • Implementing officers must maintain a low profile during covert surveillance.
  • Reports of findings must be communicated promptly.
• Timeframes: Surveillance must be reported by the following day after an apprehension.
• Consequences: Improper conduct may invalidate surveillance findings.

V. Reporting Requirement

This section specifies the obligations for reporting surveillance activities.

• Legal Principle: Ensures accountability and tracking of surveillance activities.
• Key Definitions:
  • Status Report: A summary of surveillance activities submitted to higher authorities.
• Important Requirements:
  • Reports must be prepared within 10 days after the month’s end.
  • Lists of issued MOs must be submitted by the 5th of the following month.
• Consequences: Failure to comply may result in administrative actions.

VI. Repealing Clause

This section ensures that any conflicting orders are superseded by this memorandum.

• Legal Principle: Modifies or repeals previous conflicting issuances.
• Consequences: Provides clarity and uniformity in enforcement.

VII. Effectivity

This section states the immediate enforcement of the memorandum.

• Legal Principle: The Order is effective immediately upon adoption.
• Consequences: Ensures timely implementation of surveillance policies.

Key Takeaways

• Surveillance is a critical tool for the BIR to ensure compliance with tax laws, particularly for those suspected of underreporting income or failing to adhere to tax regulations.
• There are structured types of surveillance (covert, overt, short duration) each with specific procedures and requirements.
• Reporting and accountability mechanisms are established to maintain oversight of surveillance activities.
• Immediate effectivity emphasizes the urgency in enforcing these guidelines to enhance tax compliance.