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SECTION 1.       Scope - Pursuant to the provisions of Section 245 in relation to Sections 49, 51, 74, 84, 97, 110, 125, 127 and 200 of the National Internal Revenue Code, as amended, these regulations are promulgated to govern payment of internal revenue taxes by check or bank debit memos.

SECTION 2.       Checks or Bank Debit Memos acceptable as Payment for Taxes - Payment of internal revenue taxes amounting to P10,000.00 or more shall be made in check or bank debit memos, debiting a taxpayer's bank account maintained with any of the accredited banks of the BIR, for the payment of taxes; otherwise, if the amount involved is less than P10,000.00, payment thereof can be made in cash, check or bank debit memos.  However, payment for capital gains tax and creditable withholding tax by individuals on sales or transfers of real property classified as capital assets as well as documentary stamp tax shall be made only by or thru Manager's or Cashier's check or bank debit memo, regardless of amount (RMO Nos. 28-91 dated September 10, 1991 and 11-73 dated March 2, 1973).  Provided, that, in the case of check payment, the taxpayer shall issue a separate check for each kind and nature of the tax to be paid.  If the payment is through a bank debit memo, the kind and nature of the tax to be paid should also be separately identified by the bank and reflected in its reports.

Only checks specially issued and drawn for credit to BIR (as provided for in Section 3 hereof) and collectible within the local clearing facilities of the Central Bank of the Philippines, the Philippine Clearing House Corp. (PCHC), or other established clearing channels may be accepted as payment for national internal revenue taxes.  However, the following checks are not acceptable:

a)         Accommodation checks - checks issued or drawn by a party other than the taxpayer making the payment, except the following:

1. Manager's or cashier's checks;
   
   
2. Checks drawn against joint or multiple accounts for tax payment purposes by anyone of them or either for himself or in behalf of the other members thereof;
   
   
3. Checks issued by either of the spouses to pay the tax liability of anyone of them;
   
   
4. Checks issued by the father or mother for the tax liability of his/her child/children or vice-versa;
   
   
5. Checks drawn by a corporation/partnership for the tax liability of its officers/partners only; and
   
   
6. Other special arrangements duly approved by the Commissioner of Internal Revenue or his authorized representatives on case-to-case basis.

b.         Out-of-town checks - checks drawn on banks outside the local area coverage (local clearing) of the Central Bank/PCHC clearing house;

c.         Stale checks - checks dated more than six (6) months prior to presentation to accredited banks;

d.         Postdated checks;

e.         Unsigned checks; and

f.          Checks with unauthorized erasures/alterations.

SECTION 3.       To Whom and How Checks Shall be Made Payable - To protect the interest of the taxpayer and preclude unauthorized diversion of the proceeds of checks intended to cover tax payment, such checks, including Manager's or Cashier's checks, shall be made payable to the Bureau of Internal Revenue with parenthetical reference to the payor and the kind of tax to be paid.  For example, a check of Juan dela Cruz, taxpayer, in payment of a Value Added Tax (VAT) will be prepared as follows:

Pay to the Bureau of Internal Revenue
(VAT of Juan dela Cruz)

or

Pay to the Commissioner of Internal Revenue
(VAT of Juan dela Cruz)
SECTION 4.       Authority of Accredited Banks to refuse acceptance of payment of taxes - Accredited Banks authorized to accept payment of taxes by checks have the right to refuse acceptance thereof if the same were not drawn in accordance with the requirement of Section 3 above.

SECTION 5.       Liability of the Drawer/Taxpayer and Drawee/Bank - Taxpayers using checks in payment of taxes not drawn in accordance with Section 3 above shall be liable for the unpaid taxes and increments therefor.  However, when said checks are accepted by the Bank and subsequently diverted for other uses or purposes through the fault or negligence of the bank accepting such check and without the fault of the taxpayer, the bank accepting such check shall be liable to the BIR for the amount of the check so diverted plus increments.

In both instances as aforesaid and in addition to the foregoing sanctions, the person liable, whether the taxpayer or the bank, as the case may be, shall face the civil and criminal liabilities/sanctions provided for in the Tax Code and other existing laws.

The taxpayers/drawers of dishonored checks for whatever reason, shall be liable for the unpaid tax and the increments due to late payment.

SECTION 6.       Repealing Clause - Rules and regulations or parts thereof which are inconsistent with the provisions of these regulations are hereby modified, repealed or amended accordingly.

SECTION 7.       Effectivity - These regulations shall take effect fifteen (15) days after publication in the Official Gazette or newspaper of general circulation whichever comes first.

Adopted: 31 Aug. 1993

(Sgd.) ERNEST LEUNG
Acting Secretary of Finance