THE BUREAU of Internal Revenue (BIR) has simplified verification of tax refund claims for “simple cases” that do not require in-depth investigation.
BIR Revenue Memorandum Order (RMO) 48-2018, dated Oct. 24, now allows the use of a Tax Verification Notice (TVN) to check claims of tax refunds arising from erroneous or double payment of taxes made by individuals and businesses, instead of a Letter of Authority (LoA) that can be issued only by the bureau’s chief.
TVNs will also now be sufficient for verification of tax refund claims made by temporary government workers, or those covered by job orders.
A TVN is a pre-audit document issued by the revenue district office that has jurisdiction on the taxpayer concerned, while an LoA is a document signed by the Commissioner of Internal Revenue that starts investigation into a taxpayers’ books of accounts in order to determine correct tax liabilities.
Under the previous process, a TVN was issued only for verification of estate tax cases where “the decedent has no other tax liabilities” and for processing of value-added tax (VAT) refund claims.
“This order is issued to authorize the use of a TVN, instead of a Letter of Authority, in the verification of claims for tax refund of job order personnel and claims arising from erroneous/double payment of taxes which can be considered as simple cases that will not require an in-depth audit/investigation,” the RMO read.
“Letter of Authority is the notice for audit but… is for in-depth audit and for a full-year audit. Having TVNs for simple cases like Job Order refunds will fast-track processing of their claims,” BIR Deputy Commissioner Marissa O. Cabreros said in a mobile phone message yesterday when asked for an explanation.
Luis Jose P. Ferrer, partner and head of Tax of SyCip, Gorres, Velayo & Co., said in a separate mobile phone message that “[i]n the past… LoA covers a review of all other taxes in addition to verification of refund.”
“As such, LoA makes it more difficult to claim refund since BIR will most likely assess deficiency taxes which are more than the amount claimed as refund.”
RMO 48-2018 also required that verification of claims arising from erroneous or double payment of taxes as well as claims from temporary state workers be accomplished within 30 days from submission of complete supporting documents.
The verification deadline for estate taxes remains at 60 days from submission, while for VAT refunds it is 55-65 days. — Elijah Joseph C. Tubayan