Revenue Regulations

No. 22-2020
dated September 15, 2020

Subject: Amending Certain Sections of Revenue Regulations No. 12-

1999, as Amended by Revenue Regulations No. 18-2013 and Revenue
Regulations No. 7-2018, Relative to the Due Process Requirement in the
Issuance of a Deficiency Tax Assessment.
 𝑅𝑒𝑝𝑢𝑏𝑙𝑖𝑐 𝑜𝑓 𝑡h𝑒 𝑃h𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒𝑠 RR No. 22-2020
𝐵𝑢𝑟𝑒𝑎𝑢𝑜𝑓 𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒

AMENDMENT:
Providing for the preparation of a Notice of
Discrepancy, instead of a Notice of Informal
Conference.
 𝑅𝑒𝑝𝑢𝑏𝑙𝑖𝑐 𝑜𝑓 𝑡h𝑒 𝑃h𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒𝑠 RR No. 22-2020
𝐵𝑢𝑟𝑒𝑎𝑢𝑜𝑓 𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒

Section 3. Due Process Requirement in the

Issuance of a Deficiency Tax Assessment
3.1 Mode of procedure in the issuance of deficiency tax assessment
3.1.1 Notice of Discrepancy
• If a taxpayer is found liable for deficiency taxes in the course of an investigation conducted by
a Revenue Officer, the taxpayer shall be informed through a Notice of Discrepancy.
• This aims to fully afford the taxpayer with an opportunity to present and explain his side on the
discrepancies found.
• The Revenue Officer shall state in the initial report of investigation his findings of
discrepancies.
• The taxpayer shall be informed, in writing, of the discrepancies in the taxpayer’s payment of
his internal revenue taxes, for the purpose of the “Discussion of Discrepancy”.
• The Discussion of Discrepancy shall in no case extend beyond thirty (30) days from receipt of
the Notice of Discrepancy.
 𝑅𝑒𝑝𝑢𝑏𝑙𝑖𝑐 𝑜𝑓 𝑡h𝑒 𝑃h𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒𝑠 RR No. 22-2020
𝐵𝑢𝑟𝑒𝑎𝑢𝑜𝑓 𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒

What if taxpayer disagrees with the

discrepancies noted during audit investigation?
The taxpayer must present an explanation and provide documents
to support his explanation.
The documents must be submitted during the discussion. Should
the taxpayer need more time to present the documents, he may
submit such documents after the discussion.
The taxpayer must submit all necessary documents that will
support his explanation within thirty (30) days after receipt of the
Notice of Discrepancy.
 𝑅𝑒𝑝𝑢𝑏𝑙𝑖𝑐 𝑜𝑓 𝑡h𝑒 𝑃h𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒𝑠 RR No. 22-2020
𝐵𝑢𝑟𝑒𝑎𝑢𝑜𝑓 𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒

After the Discussion of Discrepancy, and the following

occurs:
 The taxpayer is still found liable for deficiency taxes and the taxpayer does
not address the discrepancy through payment of the deficiency taxes
 The taxpayer does not agree with the findings

Then:
The investigating officer shall endorse the case to the reviewing officer
and approving official in the National Office or the Revenue Regional
Office for issuance of deficiency tax assessment in the form of
Preliminary Assessment Notice within ten (10) days from the
conclusion of the discussion.
 𝑅𝑒𝑝𝑢𝑏𝑙𝑖𝑐 𝑜𝑓 𝑡h𝑒 𝑃h𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒𝑠 RR No. 22-2020
𝐵𝑢𝑟𝑒𝑎𝑢𝑜𝑓 𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒

Failure on the part of the Revenue Officer to

comply with the periods indicated herein
shall be meted with penalty as provided by
existing laws, rules and regulations.
RMC 102-2020
dated September 22, 2020
 Revenue Memorandum
Circular No. 15-2020
dated February 12, 2020

Subject: Prescibing the Manner on How Concerned Taxpayers Shall Be

Informed of the Procedures in Responding to the Issuance of Deficiency
Tax Assessments.
 𝑅𝑒𝑝𝑢𝑏𝑙𝑖𝑐 𝑜𝑓 𝑡h𝑒 𝑃h𝑖𝑙𝑖𝑝𝑝𝑖𝑛𝑒𝑠 RMC No. 15-2020
𝐵𝑢𝑟𝑒𝑎𝑢𝑜𝑓 𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒

The Revenue Officer assigned to the case shall prepare

three (3) copies of Annex “A” to be distributed as
follows:
Original - Taxpayer’s copy
Duplicate - To be attached to the docket of the case
Triplicate - Office’s file copy

Annex “A” shall be distributed to the TP during the Discussion of

Discrepancy. To acknowledge receipt, the taxpayer or his authorized
representative shall be required to print his name and affix his signature on
the space provided.
 Notice of Discrepancy
Appearance w/in 5 days from the
Discussion of Discrepancy receipt of the notice
Shall in no case extend beyond 30 days
from the
receipt of the Notice of Discrepancy
Preliminary Assessment Notice (PAN) (RO has 10 days from the conclusion of Discussion of Discrepancy)
(TP has 15 days to reply)
Final Assessment Notice (FAN)/Final Letter of Demand (FLD)
(TP has 30 days to file a
written protest)
Reconsideration Reinvestigation
TP has to submit documents
w/in 60 days from
the filing of protest

Scenario 1: The BIR decides

Scenario 2: In case of BIR’s inaction

TP has 30 days from lapse of 180 days from TP has 30 days from lapse of 180 days from date of
filing the protest to file judicial appeal submission of docs (w/in 60 days from filing of
protest) to file judicial appeal
 Related
Jurisprudence
Not having requisite eLOA to continue the examination of the Petitioner’s records in the first place,
the subject tax assessments issued by the BIR are inescapably void. The court said that a valid tax
assessment must contain computation of the liabilities and demand for settlement or due date.
(Robinsons Toys, Inc. v. CIR.)

The Court said the Final Assessment Notice/Formal Letter of Demand to Jollibee Worldwide was
issued prematurely as they were received by the company only five days after it received the
Preliminary Assessment Notice. Under Section 3 of Revenue Regulations 12-99, a formal letter of
demand and assessment notice should be issued if the taxpayer fails to respond within 15 days from
receipt of the preliminary assessment. Respondent, in failing to await the lapse of fifteen (15) day
period correspondingly disregarded the mandatory due process requirement under RR 12-99. As a
consequence, the petitioner was denied of its right to due process. As a result, the assessments issued
in this case are void, and all the proceedings and orders emanating from there are likewise void.
(Jollibee Worldwide v. CIR)
 Related Jurisprudence
The assessment would be declared illegal if issued without Letter of Authority (LOA) or even with
an LOA but defective when it adds “and unverified prior years” in addition to specific year to be
examined (Commissioner of Internal Revenue v. Sony Philippines, Inc. GR No. 178697)

Section 228 of the NIRC is instructional as to the remedies of a taxpayer. Said Section grants the
taxpayer the remedy to appeal within 30 days after the lapse of the 180 day period but it also grants
the taxpayer the option to wait for the final decision of the CIR. These options are mutually
exclusive and resort to one bars the application of the other. (Lascona Land Co., Inc. v.
Commissioner of Internal Revenue GR No. 171251)

***Nothing Follows***
Thank you!