Tax Alert No. 32 [Revenue Memorandum Order (RMO) No. 27-2024 dated 01 July 2024]

12 Jul 2024

Providing Guidelines, Policies and Procedures in the Processing of Claims for Credit/Refund of Taxes Erroneously or Illegally Received or Collected or Penalties Imposed Without Authority Pursuant to Section 204(C), in Relation to Section 229 of the National Internal Revenue Code of 1997, as Amended (Tax Code), Except Those Under the Authority and Jurisdiction of the Legal Group

Please be informed that RMO No. 27-2024 was issued to provide guidelines, policies, and procedures for processing claims for credit/refund of taxes that were erroneously or illegally received or collected, or penalties imposed without authority. It also defines the duties and responsibilities of the offices involved in processing these claims. This RMO is in line with the reforms on tax refunds introduced under the Ease of Paying Taxes Act.

The salient provisions of this RMO are as follows:

1. The following offices shall be responsible for processing, reviewing and approving the subject claims under their respective jurisdictions, regardless of amount:

Processing Office	Reviewing Office	Approving Office
Revenue District Office	Assessment Division	Regional Director
Large Taxpayers Audit Division or Large Taxpayers District Office	Head Revenue Executive Assistant, Large Taxpayers Service (LTS)	Assistant Commissioner, LTS

2. The 180-day time frame is broken down into different stages, including investigation/processing, review, and approval by the relevant offices. The RMO also outlines the procedures for processing payment for approved tax refund claims.

3. If the taxpayer-claimant has outstanding tax liabilities, the Collection Section or Division that has jurisdiction shall be notified of the approved tax credit/refund that may be used or garnished by the BIR. In case the taxpayer-claimant has "stop-filer cases," these will be addressed separately according to existing policies and guidelines.

4. The result of the verification of the claim, whether approval or denial, will be communicated to the taxpayer-claimant, and if the claim is denied, the denial will state the legal and/or factual basis.

5. The rules in elevating to the Court of Tax Appeals (CTA) the denial of, or inaction by the BIR on the claim of refund are likewise provided, to wit:

Full or partial denial of the claim for credit/refund

The taxpayer may, within 30 days from the receipt thereof, appeal the decision with the CTA

Inaction by the authorized processing office within the 180-day period, the taxpayer may opt to:

i. Appeal to the CTA within the 30-day period after the expiration of the 180-day period; or

ii. Forego the judicial remedy and await the final decision of the authorized processing office

6. The procedures to be followed by the processing, reviewing and approving offices in handling the claims for refund and the reporting and safekeeping thereof are enumerated in this RMO.

You may access the full version of this issuance through the BIR website.

For any inquiry or request for assistance, please feel free to contact anyone from our Tax Services group. You may also reach us through this link.