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 fraudulent acts. 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 Director.