REVENUE MEMORANDUM ORDER NO. 19-2007 issued on August 10, 2007
prescribes the Consolidated Revised Schedule of Compromise Penalties for violations of
the National Internal Revenue Code (NIRC).
In all cases of criminal violations of the NIRC not involving the commission of
fraudulent act, the compromise penalties to be imposed shall follow strictly the amounts
in the “Revised Schedule of Compromise Penalties” (Annex A of the Order). Certain
acts/violations which are commonly resorted to by taxpayers as means of tax evasion are
deleted from the coverage thereof for having met the requirements of the definition of
In no case shall the compromise penalty differ in amount from those specified in
the aforementioned Schedule, except when duly approved by the Commissioner or
concerned Deputy Commissioner, or in proper cases, by the Regional Directors.
Although all amounts of compromise penalties incident to violations shall be
itemized in the assessment notice and/or demand letter, the same should not form part of
assessment notice that reflects deficiency basic tax, surcharge and interest but should
appear in a separate assessment notice/demand letter as the amount suggested to the
taxpayer to pay in lieu of criminal prosecution. If paid, the compromise penalties shall be
collected and accounted for under the usual procedures, as internal revenue collection.
Since compromise penalties are only amounts suggested in settlement of criminal
liability, and may not therefore be imposed or exacted on the taxpayer, the violation shall
be referred to the appropriate office for criminal action in the event that a taxpayer
refuses to pay the suggested compromise penalty. Cases involving fraud shall be referred
to the concerned Division having jurisdiction over the case, for the institution of the
corresponding criminal action.
The prescribed schedule of compromise penalties shall not prevent the
Commissioner of Internal Revenue (CIR) or his duly authorized representative from
accepting a compromise amount higher than what is provided in the Order. A
compromise offer lower than the prescribed amount may be accepted after approval by
the CIR or the concerned Deputy Commissioner/Assistant Commissioner/Regional