REVENUE MEMORANDUM ORDER NO. 7-2015 issued on March 23, 2015 prescribes and
implements the revised consolidated Schedule of Compromise Penalties for Violations of the
National Internal Revenue Code.
The internal revenue officers concerned shall apply the revised Schedule of Compromise
Penalties embodied in Annex “A” of the Order to ensure uniformity of action. Cases involving
fraud shall be referred to the concerned Division having jurisdiction over the case, for the
institution of the corresponding criminal action.
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
The schedule of compromise penalties herein prescribed shall not prevent the
Commissioner or his duly authorized representative from accepting a compromise amount higher
than what is provided hereof. A compromise offer lower than the prescribed amount may be
accepted after approval by the Commissioner of Internal Revenue or the concerned Deputy
Commissioner/Assistant Commissioner/Regional Director.