REVENUE REGULATIONS NO. 16-2010 issued on December 10, 2010 prescribes the guidelines, rules and procedures in the filing of confidential information and the investigation of cases arising therefrom. A qualified informer shall be rewarded in a sum equivalent to 10% of the revenues, surcharges or fees recovered and/or fine or penalty imposed and collected or P 1,000,000 per case, whichever is lower. The following are disqualified to avail of the informer’s reward: a. A BIR official or employee or any other incumbent public official or employee; b. Relative within the 6th civil degree of consanguinity of a BIR official or employee, or other public official or employee; and c. Though already retired or otherwise separated from service, BIR officials or employees or other public officials who acquired the information in the course of the performance of their duties during their incumbency. Confidential Information against the denounced taxpayer shall be under oath and shall be personally executed and filed by the Informer before the Chief, Prosecution Division, BIR National Office on the following violations: a. Attempt to evade or defeat tax; b. Failure to file return, supply correct and accurate information, pay tax, withhold and remit tax and refund excess taxes withheld on compensation; c. Failure or refusal to issue receipts or sales or commercial invoices, violations related to the printing of such receipts or invoices or other violations; d. Unlawful pursuit of business; e. Use of multiple Tax Identification Number/s (TINs); f. Making false entries, records or reports or using falsified or false accountable forms; and g. Other violations of the National Internal Revenue Code (NIRC) of 1997. However, if the estimated basic tax liability arising from the alleged violation is less than P 1,000,000.00, the confidential information should be filed before the Chief, Legal Division of the Revenue Region having jurisdiction over the taxpayer being denounced. A Confidential Information shall be treated as valid only if it meets ALL the following requisites: a. The Informer is not disqualified. b. The Informer voluntarily provides sworn information on the tax fraud or violation of the NIRC of 1997, as amended, allegedly committed by the denounced taxpayer. c. The said information is not yet in the possession of the BIR. d. The said information does not refer to a case already pending or previously investigated or examined by the Commissioner of Internal Revenue or any of his deputies, agents or examiners, or by the Secretary of Finance or any of his deputies or agents. e. The said information does not refer to or is not exactly similar to a previous information filed by another informer covering the same taxpayer describing the same scheme or information covering the same taxable year or period. In order to protect the identity of the Informer and safeguard the strict confidentiality of his information, the name of the Informer or any information appearing in the second copy of the Confidential Information that may possibly lead to the identity of the said Informer shall be deleted by the Records Management Division. From start until completion of the investigation, the docket of the case shall bear no information on the identity of the Informer. However, in extremely meritorious cases, wherein there is a need to communicate with the Informer, the Chief, National Investigation Division (NID) or Special Investigation Division (SID), as the case may be, should be given access to the identity or contact details of the Informer. Upon the commencement of the investigation process, the assigned investigators shall not divulge to third parties, including the Informer, any information, data or documents gathered during the investigation process. The investigators may only provide the Informer with updates on the status of the investigation. In order for an Informer to be entitled to a reward, the Confidential Information given must lead to or be instrumental in the discovery of the fraud or violation of the provisions of the NIRC of 1997, as amended, or special laws being administered by the BIR, and the same must result in the actual recovery or collection of revenues, surcharges and fees, and/or the conviction of the guilty party or parties, and/or the imposition of any fine or penalty or the actual collection of a compromise amount, in case of amicable settlement. Where there are two (2) or more Informers in the same case, the one who gave the information in full satisfaction of the conditions herein outlined shall be entitled to the reward. In the event that each Informer meets all conditions fully, the Informer who first furnished the information shall be entitled to the reward. In case two (2) or more persons jointly filed the confidential information who are qualified for the reward, they shall divide the reward equally among themselves. Taxes assessed as a result of a valid Confidential Information, if involving a commission of criminal fraud established beyond reasonable doubt, shall not be compromised. Unless otherwise provided by relevant revenue issuances, taxpayer subject of a valid Confidential Information shall be excluded from the coverage of any administrative program of the Bureau promulgated to facilitate and enhance revenue collection (i.e. VAP, VAAP, CTRP, etc.). Consequently, taxpayers who availed of such programs are not entitled to the privilege of “last priority in audit or investigation” or any other benefit to be accorded therein. The informer’s claim for reward shall be filed with the Prosecution Division at the BIR National Office or with the Legal Division, Revenue Regional Office, as the case may be. Claims for rewards shall be filed within three (3) years from the date of actual payment, recovery or collection of revenues, surcharges and fees, and/or the imposition of any fine or penalty or the actual collection of a compromise amount, in case of amicable settlement. The Informer’s Reward shall be subject to Income Tax, collected as a Final Withholding Tax, at the rate of 10%. The tax shall be withheld by the Accounting Division and shall be remitted to the BIR in the manner provided by law. The procedures in the processing of Confidential Information and documents and conduct of preliminary investigation at the National Office and Regional Office are specified in the Regulations.