Quezon City

October 22, 2001

REVENUE ADMINISTRATIVE ORDER NO. 2-2001

SUBJECT : Implementing the Provisions of Department Order No. 23-01

TO : All Internal Revenue Officers and Others

Concerned

 

STATEMENT OF POLICY:

It is the recognized policy under this Order that the power to interpret the provisions of the Tax Code of 1997 (Tax Code) and other tax laws is under the exclusive and original jurisdiction of the Commissioner of Internal Revenue, subject to review by the Secretary of Finance, as provided for in Section 4 of the Tax Code.

The Bureau of Internal Revenue is under the supervision and control of the Department of Finance as provided for in Section 2 of the Tax Code and Book IV, Title II, Chapter 4, Section 18 of the Administrative Code of 1987.

There is a need for uniformity of rulings and issuances in the interpretation and application of the provisions of the Tax Code and other tax laws.

SECTION 1. Scope - This Revenue Administrative Order (RAO) shall, in general, apply to all revenue rulings and issuances of the Bureau of Internal Revenue that pertain to the implementation of the provisions of the Tax Code and other tax laws, and shall include the following:

a)    Rulings of first impression;

b)   Rulings with established precedents;

c)    Revenue Memorandum Ruling (RMR);

d)   Revenue Travel Assignment Order (RTAO);

e)   Revenue Special Order (RSO);

f)     Revenue Memorandum Circular (RMC);

g)    Revenue Memorandum Order (RMO);

h)   Revenue Audit Memorandum Order (RAMO);

i)     Revenue Delegation of Authority Order (RDAO); and

j)     Revenue Administrative Order (RAO).

SECTION 2. Review Power of the Secretary of

Finance - In accordance with Section 4 of the Tax Code, the Secretary of Finance shall have the power to affirm, revise, modify or set aside rulings and issuances of the Bureau of the Internal Revenue concerning the implementation and application of the provisions of the Tax Code and other tax laws.

SECTION 3. Classification of BIR Rulings and Issuances - The following terms shall have the meaning described below:

a)   Rulings of first impression - These refer to the rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws without established precedent, and which are issued in response to a specific request for ruling filed by a taxpayer with the Bureau of Internal Revenue. Provided, however, that the term shall include reversal, modification or revocation of any existing ruling.

b)   Rulings with established precedents - These refer to mere reiteration of previous rulings, opinions and interpretations of the Commissioner, as delegated to duly authorized internal revenue officers (i.e., Deputy Commissioner, Legal and Inspection Group; Assistant Commissioner, Legal Service; Regional Directors) that are issued in response to a specific request for ruling filed by a taxpayer with the Bureau of Internal Revenue.

c)   Revenue Memorandum Rulings (RMR) - These

refer to the rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations.

d)   Revenue Travel Assignment Orders (RTAO) - These orders assign revenue personnel to specific functions in specific units. Travel assignment orders specifically mention the names of revenue personnel concerned. e) Revenue Special Orders (RSO) - Instructions or directives for the accomplishment of special assignments or missions of significance which are temporary in nature or for a definite period of time. These issuances specifically mention the personnel or units of organization concerned.

f)                     Revenue Memorandum Circulars (RMC) - These issuances shall disseminate and embody pertinent and applicable portions, as well as amplifications of the rules, precedents, laws, regulations, opinions and other orders and directives issued by or administered by the Commissioner of Internal Revenue, and by offices and agencies other than the Bureau of Internal Revenue, for the information, guidance or compliance of revenue personnel.

g)                    Revenue Memorandum Orders (RMO) - These are directives or instructions outlining procedures, techniques, methods, processes, operations, activities, work flow, and the like, which are necessary to carry out programs or to achieve policy goals and objectives. These issuances may be of general or of limited scope yet in any case require definite compliance by those concerned. They are not addressed to any particular group of employees or offices because they are for general information, but those directly concerned with the compliance of these provisions are either definitely stated, or unmistakably implied thereat.

h)                   Revenue Audit Memorandum Orders (RAMO) - These refer to the uniform audit procedures to be observed by revenue officers in the conduct of audit of tax cases and in their submission of reports of investigation.

i)                     Revenue Delegation of Authority Orders (RDAO) - These refer to the functions delegated by the Commissioner to revenue officers in accordance with law.

j)                     Revenue Administrative Orders (RAO) - These refer to matters that deal strictly with more or less permanent administrative set-up of the Bureau. Delineation of organizational structures, statements of functions and/or responsibilities, definitions and delegations of authority, staffing and personnel requirements, standards of performance, establishment of Bureauwide programs, installation of systems, and the like, are most likely subject matter of Revenue Administrative Orders. These issuances are for general guidance, compliance and/or information.

SECTION 4. Validity of Rulings and Issuances - All rulings and issuances of the Commissioner of Internal Revenue that pertain to the implementation and interpretation of the Tax Code and other tax laws are valid, unless revoked, reversed, modified, or superseded by the Secretary of Finance pursuant to Department Order No. 23-01.

SECTION 5. Effectivity - This Revenue Administrative Order shall take effect immediately.

(Original Signed) REN G. BANEZ