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(NAR) VOL. III NO. 4 / OCTOBER - DECEMBER 1992

[ BIR REVENUE MEMORANDUM ORDER NO. 38-92, September 11, 1992 ]

ADDENDA/AMENDMENTS TO RMO NO. 32-92 DATED AUGUST 7, 1992 RELATIVE TO THE GUIDELINES AND PROCEDURES IN THE PROCESSING OF TAX CREDIT/REFUND OF EXCESS WITHHOLDING TAX/OVERPAYMENT OF INDIVIDUAL INCOME TAX FOR 1991 (COVERING BIR FORM NOS. 1701 - FOR INDIVIDUALS WITH INCOME FROM BUSINESS/PROFESSION AND COMPENSATION; 1701A - FOR INDIVIDUALS WITH COMPENSATION INCOME ONLY)



Revenue Memorandum Order No. 32-92 dated August 7, 1992 is hereby supplemented/amended with the following guidelines in the processing of tax credit/refund of excess withholding tax/overpayment of individual income tax for 1991 covering BIR Form Nos. 1701 and 1701A:

1. In the case of employees whose second installment payments were already recomputed by the Revenue District Office as of July 15, 1992 by taking into consideration the increased exemptions under R.A. 7167, the employer shall require presentation of the copy of the Authority to Accept Payment (ATAP) from such employees to establish payment of the second installment.  Said copy of the ATAP shall be attached to the income tax return (ITR) of the employee to be submitted to the employer.

2. A refundable 1701A return showing a computation of income tax due in accordance with the increased exemptions under R.A. 7167 but filed late by the taxpayer/employee shall be received by the Office of the Collection Officer.  However, an ATAP shall be issued to the said taxpayer/employee for payment of penalties for late filing to the accredited bank branch/Office of the Collection Officer.  The validated ATAP shall be attached to the ITR which shall be submitted by the taxpayer/employee to his employer for attachment to the Amended Alpha List of Employees.

3. Employers who recomputed excess tax payments of employees without their 1701A ITRs shall be assessed for under remittance of said tax payments for the month when credit/refund was made.

4. All 1701A tax returns for 1991 which were subjected to recomputation shall be noted/stamped by the employer (who made the recomputation) on the upper right hand corner of said returns with the following:
"RECOMPUTED UNDER RA 7167 FOR (HUSBAND/WIFE)"

______________________________
5. The employers concerned shall be responsible for procurement/preparation of said stamp for their office/s use.

6. The copies of the 1991 income tax returns presented by the employees to their employer and which are to be attached to the Amended Alpha List shall be stamped "Verified from the Original Duplicate Copy" and signed by the employer.

7. In case an employee has lost his ITR for 1991, said employee shall secure a "certified true copy" of the ITR from the RDO where he filed the return.

8. If husband and wife filed separate tax returns for 1991, their employer/s shall require each of them to present both copies of their ITRs to determine if only one of the spouses claimed the additional exemption for their qualified dependent children.  Copies of both ITRs shall be attached to the "Amended Alpha List of Employees for 1991".

9. In case both husband and wife claimed the additional exemption for their qualified dependent children, only one of them shall be allowed to do so at their option and corresponding adjustments shall be made in the recomputation of their 1991 1701A ITR.  The employer of the spouse who claimed the additional exemption shall note/indicate on the upper right hand corner of the ITR of the other spouse that the "ADDITIONAL EXEMPTION FOR CHILDREN HAVE ALREADY BEEN CLAIMED BY THE HUSBAND, OR THE WIFE," as the case maybe.

10. An employee who was not included in the recomputation and in the Amended Alpha List of Employees for 1991 submitted by the employer to the RDO, shall file a written claim for refund together with his copy of ITR and a Certification by his employer that he was not included in the amended alpha list submitted to the RDO concerned, for processing.

11. The RDO shall verify the claims and declarations of the taxpayers/employees by checking on the correctness of the said claims and that no recomputation has been made by the employer.

12. The RDO shall recompute the income tax due on the basis of the ITRs of the taxpayers/employees mentioned in paragraphs 10 and 11 of this RMO and shall reflect said recomputation using the Pre-Audit Sheet for 1701 returns prescribed in Annex C of RMO No. 32-92 dated August 7, 1992.

13. The Pre-Audited Sheets shall be attached to the corresponding recomputed 1701A returns and shall be transmitted together with other pertinent documents mentioned above to TC/RD for review and monitoring.

14. CISS shall prepare the corresponding TRNs for refundable taxpayers/employees based on the reviewed Pre-Audit Sheets attached to the taxpayer's/employee's ITRs and other supporting documents.  Said ITRs are not supposed to have any Document Locator Number (DLN).

15. Upon receipt of the Amended Alpha List of Employees for 1991, the RDO shall:
  1. Check completeness of supporting documents attached to the said list as required under paragraph III, A.6, a-c of RMO 32-92 dated August 7, 1992.

  2. Check completeness of corresponding ITRs/ATAPS attached to said list and that refunds/credits were made only to employees who presented ITRs/ATAPs.

  3. Verify correctness of claims for exemptions and check mathematical computations of credits/refunds.

  4. Assess Withholding Agent concerned for unpaid collectible amounts due to under withholding.

  5. Report the number/amount of assessments issued for collectible amounts per Amended Alpha List to WTD not later than January 15, 1993.

  6. Process and transmit to TC/RD the following:
    1. Refundable 1701A ITRs filed after the submission of the Amended Alpha List by the employer to the RDO, where personal and additional exemption under R.A. 7167 were claimed. (as in No. 10 above)

    2. Claims for refund of excess tax payments for 1991 of employees who are no longer employed as adverted to in the second paragraph of No. 16(a) of this RMO.
16. The following sections of the aforementioned RMO are hereby amended to read as follows:

a. II-G (Policies)

Employees separated from the service of their previous employers, who have filed their 1991 ITRs using the old personal and additional exemption rates and who have present (new) employers, shall submit their ITR for 1991 for recomputation of their excess tax payments to their present employers.

On the other hand, employees separated from the service of their employers and who are no longer employed shall submit their written claim for refund of any excess withholding tax, together with the certified true copy of the ITR and withholding tax statement to the RDO for processing and for transmittal to the Tax Credit/Refund Division for preparation of corresponding TRN.

b. III-A-4-a (On Adjusted Refundable Cases)

Allow Credit for adjusted refundable amount (excess of taxes withheld over the adjusted tax due and tax paid in 1991) against the tax required to be withheld from the compensation of the employees beginning September, 1992 and the succeeding months.

However, the employers shall have the option to refund all amounts refundable to the employees immediately.  In turn, the total amount, actually refunded by the employer to the employees, shall be repaid from the remittable amount of taxes withheld from compensation income for the current month in which refund was made in the succeeding months until the overwithheld tax is fully repaid.

REPEALING CLAUSE

This Order hereby repeals or amends accordingly all issuances or portions thereof inconsistent herewith.

EFFECTIVITY

This Order shall take effect immediately.

Adopted: 11 Sept. 1992

(SGD.) JOSE U. ONG
Commissioner of Internal Revenue
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