Submission of records during tax investigation, and issuance of SDT

Submission of records during tax investigation, and issuance of subpoena duces tecum (SDT)

Taxpayers who refuse or disregard requests from the BIR to produce their books of accounts and/or other records and documents in the course of a tax investigation now face the threat of an ealier issuance of the  subpoena duces tecum (SDT) under the revised guidelines and procedures, as follows:

     1. Issuance of first notice. In case the taxpayer ignores or disregards the demand to furnish the required documents to the revenue officer (RO), the first notice will be issued after ten (10) calendar days from receipt of the letter of authority and checklist of documents  for audit or access to records request.

     2. Issuance of second and final notice.  If the taxpayer ignores the first notice and disregards the demand for submission of the required documents, a second and final notice shall be sent to the taxpayer after ten (10) calendar days from receipt of first notice.

     3.  Request for issuance of SDT.  After 10 calendar days from receipt of the second and final notice and the taxpayer still refuses to comply with the requirement under the second and final notice, the revenue officer shall request for the issuance of SDT from the legal service (national office), legal division (regional office), or any other authorized office, as the case may be. 
The concerned offices should act on the request for issuance of SDT within 5 calendar days from receipt of the request.  Once issued, the SDT should be served immediately to the taxpayer while the served copy of the SDT should be returned to the issuing office within 5 calendar days from the issuance of the SDT.

     4. Filing of case against taxpayer.  In case of refusal to comply with the SDT, the BIR shall file a criminal case for failure to produce books of accounts or furnish information under Sections 5, 14, and 266 of the Tax Code and/or initiate a proceeding to cite the taxpayer for contempt under the Revised Rules of Court. 

     5. Case dismissal and payment of penalty.  If the taxpayer submits the required information and requests for the dismissal of the case/s filed in court, the BIR shall concur with the request upon the submission of the requested documents and payment of P10,000 as penalty for delayed compliance and violation of provisions of the revenue regulations.

Please see attached copy of RMO 45-2010 for your reference.