REVENUE REGULATIONS NO. 7-2001 issued August 1, 2001 further implements the compromise settlement of internal revenue tax liabilities. Cases which may be compromised are: 1) delinquent accounts; 2) cases under administrative protest pending in the Regional Offices, Revenue District Offices, Legal Service, Large Taxpayers Service (LTS), Collection Service, Enforcement Service and other offices in the National Office; 3) civil tax cases being disputed before the courts; 4) collection cases filed in courts; 5) criminal violations, other than those already filed in court or those involving criminal tax fraud; and 6) cases covered by pre-assessment notices wherein taxpayer is not agreeable to the findings of the audit office as confirmed by the review office. Cases that cannot be compromised are: 1) withholding tax cases; 2) criminal tax fraud cases; 3) criminal violations already filed in court; 4) delinquent accounts with duly approved schedule of installment payments; 5) cases where final reports of reinvestigation or reconsideration have been issued resulting to reduction in the original assessment; and 6) cases which become final and executory after final judgement of a court. The basis for the acceptance of compromise settlement are: 1) doubtful validity of the assessment; and 2) financial incapacity. The prescribed minimum rates (based on the basic assessed tax) for the compromise settlement of tax liabilities reckoned on a per tax type assessment basis are: a) 10% in cases of financial incapacity; and b) 40% in cases of doubtful validity. The prescribed minimum rate is 20% if the taxpayer is under any of the following conditions: 1) dissolved corporations; 2) non-operating companies for a period of less than three (3) years; and 3) surplus or earnings deficit resulting to impairment in the original capital by at least 50%. All compromise settlements within the jurisdiction of the National Office shall be approved by the National Evaluation Board (NEB) composed of the Commissioner and the four Deputy Commissioners. Offers of compromise assessments issued by the Regional Offices involving basic deficiency taxes of P500,000 or less, including minor criminal violations discovered by the Regional and District Offices, shall be subject to the approval by the Regional Evaluation Board. If the offer of compromise is less than the prescribed rates set forth in Sec. 4 of the Regulations, the same shall always be subject to the approval of the NEB.