8box Solutions Inc.


Contact Number: 09369340340
Email: sales@8box.solutions

REVENUE MEMORANDUM ORDER NO. 16-2023 issued on May 17, 2023 provides supplemental guidelines and procedures on the implementation of Revenue Memorandum Order (RMO) No. 40-2022 to ensure effective conduct of apprehension/seizure and detention of unlicensed/unregistered articles. The BIR personnel coming from the concerned team of the BIR STRIKE Group shall be authorized to conduct covert surveillance activities on identified business establishments for possible violations of the provision of the National Internal Revenue Code (NIRC) of 1997, as amended, based on a validly issued Mission Order (MO) signed by the Deputy Commissioner – Operations Group (DCIR-OG), Assistant Commissioner – Large Taxpayers Service (ACIR-LTS) or the concerned Regional Director (RD), and shall perform the following procedures: a. Observe the business operations of the subject. Develop leads from other sources by obtaining information from neighboring business establishments, locating additional outlets, stores, production plant/factory, warehouses/storage, or branches of subject. b. Know the suppliers and suppliers and buyers, and volume of deliveries made to any by the subject. This should be done discreetly. c. Perform test-buy operations in furtherance of the surveillance, if applicable. d. Determine any violation of internal revenue laws, rules and regulations committed by the subject. e. Submit a report within twenty-four (24) hours after completion of the said activity. After the conclusion of the covert surveillance, a Memorandum Report shall be prepared recommending the necessary enforcement action, if the result of surveillance activities warrants the same. In such case, the Memorandum Report must state that there are reasonable grounds that articles subject to Excise Tax are produced or kept, so far as may be necessary to examine, discover, or seize the same. Within forty-eight (48) hours from submission of the Memorandum Report finding that there are reasonable grounds recommending for the necessary enforcement action, the concerned BIR Strike Team shall prepare the necessary MO for the Enforcement Action. The BIR personnel coming from the concerned team of the BIR STRIKE Group shall be authorized to conduct overt surveillance activities on identified business establishments for possible violations of the provision of the NIRC of 1997, as amended, based on the issued MO signed by the concerned authorized revenue official. The most important factor in overt surveillance is the element of surprise. The subject must be caught unaware to prevent him from committing acts which may defeat the purpose of the surveillance. When the subject is caught in flagrante delicto of committing crimes punishable under the NIRC of 1997, as amended, the concerned team of the BIR STRIKE Group must immediately proceed to the enforcement action. All enforcement activities shall be covered by MOs to be signed by the DCIR-OG, ACIR-LTS or the concerned RD. The MOs shall be issued in quadruplicate to be distributed as follows: 2 Original – Revenue Officer/s directed to conduct the surveillance and to be attached to the report on surveillance after termination of the activity 2 nd copy – Investigating office’s/division’s file copy 3 rd copy – Issuing office’s/division’s file copy 4 th copy – Subject’s copy In addition to the procedures provided under subparagraph 4.2 of RMO No. 40-2022, the MO shall be served to the subject through personal service by delivering personally a copy of the MO at the specified place stated in the MO. RD or ACIR-LTS issuing the MO shall make sure that all personnel involved in the enforcement operations are included in the MO. In case personal service is not possible, the MO shall be served by substituted service. However, substituted service can only be resorted to when the subject is not present at the specified place stated in the MO. The different ways by which substituted service shall be done are specified in Section 3.2.b.1 of this Order. The service shall be proven by an Affidavit of Service of the concerned BIR Strike Team who served the MO. Together with the service of MO, the concerned BIR Strike Team shall present to the subject a Checklist of Documentary Requirements (as specified in the Order), if applicable, to be submitted/presented to the BIR by the latter within two (2) days. The taking of inventory count shall be attended by the concerned BIR Strike Team; photographer and/or videographer; and subject or its authorized representative. The absence of the subject or its authorized representative shall not invalidate the inventory count. The concerned BIR Strike Teams shall adequately secure the location/storage room where the evidence is kept during the count to examine and verify the authenticity of the articles found in the place of the subject. The steps to be followed to secure the articles are specified in the Order. Whenever necessary, secure assistance with other government agencies, such as but not limited to National Bureau of Investigation (NBI), Bureau of Customs (BOC), Philippine National Police (PNP), and concerned Local Government Unit (LGU). After the inventory stock-taking/physical count and determining that the items found in the subject’s premises are illicit (e.g. no stamps, fake stamps, etc.), the same shall be immediately seized and confiscated, subject to the issuance of the Apprehension Slip (BIR Form No. 0423). An Apprehension Slip shall be issued for all seized/confiscated articles, raw materials, packages, cigarette paper, tipping paper, cigarette filter tips, ingredients, machinery, equipment, apparatus, mechanical contrivances, and removable fixture of any sort used for their production and the use or possession of false, counterfeit, restored or altered BIR internal revenue stamps, labels or tags found to be in violation of any tax laws, rules and regulations. The subject must be provided a copy of the Apprehension Slip, with proof of receipt thereof. Within seven (7) days from receipt of the last Apprehension Slip concluding the entire enforcement action, a Demand to Comply shall be communicated to 3 subject relative to the detention of package containing taxable articles, pursuant to Section 172 of the NIRC of 1997, as amended. The subject, as part of due process, should be served with the MO, Checklist of Documentary Requirements on the start of the enforcement activity and whenever applicable, Apprehension Slip/s and Inventory Sheets on the last day of the enforcement action and Demand to Comply. A final Memorandum Report on all apprehended items with corresponding Apprehension Slip/s must be prepared and issued by the Apprehending Team within seven (7) days from the date of issuance of the last Apprehension Slip. The apprehended items, which are in violation of the provision of the NIRC of 1997, as amended, shall be considered evidence against the subject. It is the duty of the Apprehending Team to check the proper turnover of evidence to the Storage of Facility. The turnover of evidence shall be witnessed by the BIR Strike Team, photographer and/ or videographer and subject or its authorized representative. The subject’s failure to attend, after being duly notified, shall be construed as a waiver of his/her right to witness the turnover. A Certificate of Acceptance must be issued and duly signed by the Apprehending Team and the representative of the storage facility. The DCIR-OG, as the Over-all Head, shall designate the storage facility for the Large Taxpayers Service (LTS) Office and Regional Offices. However, the custody of the apprehended items shall remain within the storage facility with the LTS/Revenue Region having jurisdiction over the subject. If the subject fails to comply and/or disagrees with the initial findings stated in the Demand to Comply, the BIR Strike Team shall issue a Collection Letter within five (5) days, for the collection of deficiency Excise Taxes arising from the enforcement operation. No Preliminary Assessment Notice (PAN) shall be issued when the excise due on excisable articles has not been paid pursuant to Section 228 of the NIRC of 1997, as amended. If the Excise Tax discrepancies remained unsettled/unpaid, the corresponding Final Assessment Notice (FAN) and Formal Letter of Demand (FLD) shall be issued and served upon the subject. The subject, or any officer or employee of such subject, or any person having possession, custody, or care of the books of accounts and other accounting records containing entries relating to the business of the subject liable for tax, or any other person, can be summoned to appear before the Commissioner of Internal Revenue (CIR) or his duly authorized representative at a time and place specified in the summons and to produce such books, papers, records, or other data, and to give testimony. A criminal complaint for failure to obey summons shall be initiated and filed against the subject and other responsible officer/person in case of failure to obey the SDT within the prescribed period. In any case the subject offers to pay the deficiency excise taxes and corresponding penalties, the offer of payment must originate from the subject. The imposition of the compromise penalties shall be in accordance with revised schedule of compromise penalties prescribed under existing revenue issuances and regulations. However, imposition of/acceptance of compromise penalties are amounts suggested for the settlement of criminal offense, thus, proper evaluation of the case must be made determine if the offer to pay the compromise penalty by 4 the subject should be accepted by the BIR Strike Team. The offer of compromise settlement shall be governed by Section 204 of NIRC of 1997, as amended, and as implemented by existing revenue issuances and regulations. The result of the investigation and/or operation pursuant to this Order shall be forwarded to the Prosecution Division for Large Taxpayers Service or the Legal Division of the concerned Revenue Region, as the case may be, for evaluation and filing of appropriate legal action in accordance with existing laws, rules and regulations. A Demand Before Suit shall be issued for criminal complaints involving collection of tax liabilities. In the event that a case has already been filed in court, proper leave of court for destruction should be filed before said court. A Certificate of Remaining Evidence shall be issued pertaining to the remaining evidence left to the Storage Facility, to be signed by the Apprehending Team, attending lawyer, authorized representative of the Storage Facility, and two (2) disinterested witnesses. A final memorandum report shall be issued by the Apprehending Team stating the sample taken and the recommendation for destruction of the remaining evidence in the Storage Facility, for approval of the DCIR, OG. The remaining apprehended items, regardless of subsequent payment of unpaid Excise Taxes and incremental penalties, must be disposed of by destruction or by any other appropriate modes of disposition at the discretion of the CIR, subject to existing rules and regulations. The DCIR-OG, ACIR, LTS and concerned RDs should assign a focal person who will document the process of the seized/unlawful articles from the commencement until completion. It is the duty of the Apprehending Team to preserve all reports, photos and videos of all activities relevant to the entire enforcement and operation until proper turn over to the proper authority/office.