June 3, 2019

JOINT OPERATIONS MEMORANDUM NO. 01-19

TO : The Assistant Commissioner, Assessment Service

The Assistant Commissioner, Collection Service
The Assistant Commissioner, Large Taxpayers Service
The Assistant Commissioner, Legal Service
The Regional Directors
The Revenue District Officers
The Chiefs, Regional Assessment Divisions
The Chiefs, Regional Collection Divisions
The Chiefs, Regional Investigation Divisions
The Chiefs, Regional Legal Divisions
The Chiefs, Accounts Receivables Monitoring Division
The Chiefs, Large Taxpayers Audit Divisions
The Chief, Large Taxpayers Collection Enforcement
Division
The Chief, Legal and Legislative Division
The Chief, National Investigation Division
All Others Concerned

SUBJECT : Assessments Pursuant to Issued Letter Notices

This Memorandum is issued in order to address the issues and

concerns on protested/disputed and delinquent assessments made pursuant
to a Letter Notice, in view of the Decision of the Supreme Court in the case
of Medicard Philippines, Inc. vs. Commissioner of Internal Revenue (G.R. No.
222743) dated 05 April 2017, in which the Court held that the "assessment
issued against Medicard Philippines, Inc. is hereby declared unauthorized for
having been issued without a Letter of Authority by the Commissioner of
Internal Revenue or his duly authorized representatives."
Revenue Memorandum Circular (RMC) No. 75-2018 dated September 5,
2018 emphasized and clarified that any tax assessment issued without a
Letter of Authority (LOA) is a violation of taxpayer's right to due process and
is therefore "inescapably void." Thus, any assessment issued pursuant to a
Letter Notice (LN) which was not replaced by LOA is invalid and, therefore,
should be cancelled and/or withdrawn. DETACa

In order to resolve the issues on assessments issued based on LNs not

replaced by LOAs, which have become final, executory and demandable,
including disputed/protested assessments, the following guidelines shall be
observed:
1. The Revenue District Offices (RDOs), Assessment Divisions (ADs),
Collection Divisions (CDs), and Legal Divisions (LDs) under the
Revenue Regional Offices, as well as the Legal and Legislative
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 Division (LLD), Accounts Receivables Monitoring Division (ARMD),
Large Taxpayers Audit Divisions (LTADs) under the LTS and Large
Taxpayers Collection Enforcement Division (LTCED) in the
National Office shall prepare inventory lists of all LN dockets in
their custody. The inventory lists shall be submitted in hard and
soft copies to the Audit Information, Tax Exemption and
Incentives Division (AITEID) within five (5) days from issuance of
this memorandum, using the format prescribed in Annex "A"
hereof. The soft copy of the list shall be sent through email
address aiteid@bir.gov.ph.
2. For protested/disputed LN cases which were referred to the LD or
LLD for confirmatory ruling or opinion, the office having custody
of the dockets shall refer the dockets with a transmittal list to the
concerned RDO or LT Division, for evaluation in accordance with
paragraph no. 3 below. A copy of the transmittal list shall be
furnished to the Assessment Service, Attention: AITEID.
3. Assessments covered by LNs which are dated prior to January
2010 shall no longer be pursued and the aforesaid offices shall
recommend the issuance of Authority to Cancel Assessment
(ATCA) in accordance with the policies and guidelines prescribed
in Revenue Memorandum Order (RMO) No. 33-2018.
For assessments covered by LNs which are dated January 2010
and onwards; the concerned RDOs, ADs, CDs, ARMD, LTADs and
LTCED, where the case/docket is pending, shall evaluate the
discrepancies involved per LN based on the Details of
Discrepancies attached to the Final Assessment Notice
(FAN)/Formal Letter of Demand (FLD) or Final Decision on
Disputed Assessment (FDDA).
If the discrepancy is 30% or less, the concerned office shall
recommend for the issuance of ATCA since the assessment is no
longer within the three (3)-year period to assess prescribed in
Section 203 of the 1997 Tax Code, as amended. However, if the
discrepancy is more than thirty percent (30%) and the 10-year
prescriptive period to assess has not yet prescribed pursuant to
Section 222 (a) of the 1997 Tax Code, as amended, based on the
date of the LN as the reckoning date, it shall be referred for
issuance of electronic Letter of Authority (eLA) to the concerned
Regional Investigation Division (RID) under the Revenue Region
having jurisdiction over the RDO where the taxpayer is
registered, or to the National Investigation Division (NID) in case
the taxpayer is registered as large taxpayer. A copy of the
referral/transmittal to the RID or NID, as the case may be, shall
be furnished to the Assessment Service, Attention: AITEID. aDSIHc

Upon receipt by the RID/NID of the LN cases, it shall prepare a list

of taxpayers with LN cases for issuance of eLAs for the approval
of the Regional Director or Assistance Commissioner,
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 Enforcement and Advocacy Service (EAS). Upon approval, the
RID/NID shall request for a "Data Fix" in order to generate the
eLAs for the LN cases, through the Electronic Letter of Authority
Monitoring System (ELAMS). The requests, together with the
approved lists shall be referred to the Assessment Service,
Attention: AITEID.
4. The RID/NID shall ensure that the report of investigation shall be
transmitted to the concerned reviewing offices not later than six
(6) months prior to the end of the ten (10)-year period to assess
pursuant to Section 222 (a) of the 1997 Tax Code, as amended.
For strict and immediate compliance.
(SGD.) MARISSA O. CABREROS
Deputy Commissioner
Legal Group
(SGD.) ARNEL SD. GUBALLA
Deputy Commissioner
Operations Group

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