REVENUE MEMORANDUM CIRCULAR NO. 11-2007 issued on February 9, 2007 circularizes the unnumbered memorandum issued by Commissioner Guillermo L. Parayno, Jr. dated March 31, 2004 regarding the settlement of outstanding Withholding Tax liabilities of Local Government Units (LGUs).

         In the said memorandum, the Regional Directors, Revenue District Officers, Chief-Assessment Division and Chief-Collection Division are directed to cause the immediate settlement of the Withholding Tax liabilities of LGUs within their jurisdiction by encouraging LGUs to pay the basic tax and/or interest and file an application for abatement of other penalties imposed.

         A report on the payment/s of each LGU and the action taken by the said office should be submitted immediately to the Assistant Commissioner-Collection Service (ACIR-CS) through the Chief-Withholding Tax Division for monitoring purposes. 

        The duly accomplished three (3) copies of the Application for Abatement or Cancellation of Tax, Penalties and/or Interest (BIR Form No. 2110), with letter stating the reasons or cause for the request and payment forms evidencing payment of basic and/or interest, if any, should be submitted by the taxpayer to that office for evaluation, and thereafter be forwarded to the Technical Working Committee on Abatement throughthe ACIR-CS as Chairman.