Law Summary

1. Scope

• Explanation: These regulations are established to enhance the computerized tax systems in accordance with the National Internal Revenue Code (NIRC).
• Key Definitions:
  • Account Information Form (AIF): A new mandatory form accompanying income tax returns.
• Important Requirements:
  • The AIF must be filed with specific income tax return forms:
    • 1701AIF-1: For Self-Employed and Professionals
    • 1701AIF-2: For Estates and Trusts
    • 1702AIF-1: For Corporations and Partnerships
    • 1702AIF-2: For General Professional Partnerships
    • 1702AIF-3: For Exempt Organizations

2. Account Information Form

• Explanation: The AIF is designed to align with the BIR Integrated Tax Systems (ITS) and must include the taxpayer's business profile and relevant data.
• Key Definitions:
  • Integrated Tax Systems (ITS): The computerized system for processing tax returns.
• Important Requirements:
  • The AIF must be completed and attached to the income tax return, along with:
    • Audited balance sheet
    • Profit and loss statements
    • Schedules of income-producing properties and their corresponding income (for estates and trusts).

3. How and Where to File the AIF

• Explanation: Procedures for filing the AIF depend on the operational status of the ITS in Revenue District Offices.
• Important Requirements:
  • In pilot offices with ITS, the AIF and financial statements must be attached to the income tax return.
  • In non-pilot offices without ITS, only the regular audited financial statements need to be submitted.

4. Penalty

• Explanation: Failure to attach the AIF constitutes a violation of the NIRC, subjecting the taxpayer to penalties.
• Key Definitions:
  • Penalties of Perjury: Legal consequences for submitting false information.
• Important Requirements:
  • The AIF must be signed by the taxpayer, heir, or trustee.
  • Non-compliance results in penalties as laid out in Section 274 of the NIRC.
• Consequences:
  • Payment of penalties does not exempt the taxpayer from submitting the AIF.

5. Repealing Clause

• Explanation: Any conflicting rules or regulations are modified or repealed as necessary to conform with these regulations.

6. Effectivity

• Explanation: These regulations will take effect 15 days after publication.
• Important Timeframes:
  • The effective date is contingent upon publication in the Official Gazette or a newspaper of general circulation.

Key Takeaways

• The introduction of the Account Information Form (AIF) is mandatory for various categories of taxpayers filing income tax returns.
• Compliance with these regulations is essential to avoid penalties, and the AIF must be submitted with the required financial statements.
• The regulations come into effect 15 days post-publication, emphasizing the importance of timely compliance for taxpayers.