RMO No. 26-2016 Policies and Guidelines in Handling Disputed Assessments.

On June 13, 2016, the Commissioner of Internal Revenue issued Revenue Memorandum Order (RMO)
No. 26-2016, which prescribe policies, uniform guidelines and procedures in handling disputed
assessments, and in issuing Final Decision on Disputed Assessment (FDDA) and revision thereof by the
Commissioner of Internal Revenue.
Taxpayers are advised to take note of the following changes:
New Rule

Previous Rule

(RMO No. 26-2016)

(RR 12-99, as amended by RR 18-2013)

Formal Letter of Demand and Final Assessment

Notice (FLD)/(FAN) shall be issued fifteen (15)
days from date of receipt by the taxpayer of
the PAN, whether the same was protested or not.

If the taxpayer fails to respond within fifteen (15)

days from date of receipt of the PAN, he shall be
considered in default, in which case, a Formal
Letter of Demand and Final Assessment Notice
(FLD/FAN) shall be issued calling for payment of
the taxpayer's deficiency tax liability, inclusive of
the applicable penalties.
N.B. No period provided for issuance of FLD/FAN
if the taxpayer fails to file a reply.

If a request for Reinvestigation was made, the

taxpayer shall submit all the relevant supporting
document in support of his/her/its protest within
sixty (60) days from the date of the filing of the
taxpayers letter of protest. Evaluation of the
protest shall be based exclusively on the
documents submitted within this period, and no
further documents shall be accepted after the
expiration of the said period.The assessment
shall become final and executoryin the event
the taxpayer fails to submit the relevant
supporting document within sixty (60) days
period, and a Collection Letter and other
collection remedies such as but not limited
garnishment, warrant and levy shall be issued
against the taxpayer.

If the taxpayer, within fifteen (15) days from date

of receipt of the PAN, responds that he/it
disagrees with the findings of deficiency tax or
taxes, an FLD/FAN shall be issued within fifteen
(15) days from filing/submission of the
taxpayers response, calling for payment of the
taxpayer's deficiency tax liability, inclusive of the
applicable penalties.
For requests for reinvestigation, the taxpayer shall
submit all relevant supporting documents in
support of his protest within sixty (60) days from
date of filing of his letter of protest, otherwise, the
assessment shall become final. The term
relevant supporting documents refer to those
documents necessary to support the legal and
factual bases in disputing a tax assessment as
determined by the taxpayer. The sixty (60)-day
period for the submission of all relevant
supporting documents shall not apply to requests
for reconsideration. Furthermore, the term the
assessment shall become final shall mean
the taxpayer is barred from disputing the
correctness of the issued assessment by
introduction of newly discovered or additional
evidence.
N.B. In Commissioner of Internal Revenue v. First
Express Pawnshop Company, G.R. Nos. 17204546, June 16, 2009, the Supreme Court has held
that it is the taxpayer, not the BIR, who
determines what relevant supporting documents
to submit as the basis of its claim. The BIR can

An assessment shall become final, executory

and demandable due to:

only inform the taxpayer to submit additional

documents. The BIR cannot demand what type of
supporting documents should be submitted.
Same as above

Failure of the taxpayer to submit all

relevant documents in support of his
protest by way of request for
reinvestigation within sixty (60) days
from the date of filing thereof.
All protest shall be considered request for
reconsideration unless said protest clearly
indicates that the request is for reinvestigation.

An assessment shall become final, executory

and demandable due to:

Failure of the taxpayer to receive any

assessment notices because it was
served in the address indicated in the
BIRs registration database and the
taxpayer transferred to a new address
or closed/ceased operations without
updating and transferring its BIR
registration or cancelling its BIR
registration as the case may be, through
the accomplishment and filing of BIR
Form
No.
0605-Application
for
Registration Information Update, as
prescribed by pertinent issuance and/or
amendments thereto.
The above Order shall take effect immediately.

The taxpayer shall state in his protest (i) the

nature of protest whether reconsideration or
reinvestigation, specifying newly discovered or
additional evidence he intends to present if it is a
request for reinvestigation, (ii) date of the
assessment notice, and (iii) the applicable law,
rules and regulations, or jurisprudence on which
his protest is based, otherwise, his protest shall
be considered void and without force and effect.
N.B. There is no language in RR 12-99, as
amended by RR 18-2013 which states that failure
to indicate that the protest is a request for
reinvestigation will merit automatic treatment of
the protest as a request for reconsideration.
N.B. There is no similar rule in RR 12-99, as
amended by RR 18-2013