BIR SHOULD FORGIVE THOSE TAXPAYERS WHO COMMITTED MISTAKES patreon.com/EmelinoTMaestro

 I forgive those who commit mistakes.

“IF THERE APPEARS TO BE ANY DISCREPANCIES BETWEEN THESE INSTRUCTIONS AND THE APPLICABLE LAWS AND REGULATIONS, THE LAWS AND REGULATIONS TAKE PRECEDENCE.”, say BIR Form No. 1701/1702. Meaning, if I committed a mistake for blindly following the form and standard that the said Form presented, I would still be liable for penalty.

Seldom the BIR forgives those who sinned against it although such sins originated from its negligence and incompetency.

Again, I spotted a glaring mistakes in the said Form. I believe that it is my duty to inform this Office about it.

For the delight of this Office, Schedule 2, BIR Form No. 1701 showed the following, viz;

Total Sales/Revenues/Receipts/Fees

Add: Gross Sales/Revenues/Receipts/Fees not subject to Withholding Tax

Total Sales/Revenues/Receipts/Fees (Sum of items 1 and 2)

Untrained and careless persons my perceived that item 1 includes Total Sales/Revenues/Receipts/Fees subject to Withholding Tax and not subject to Withholding Tax. Then, if item 2 would be added to it, item 3 would be overstated by the Total Sales/Revenues/Receipts/Fees not subject to Withholding Tax (item 2).

Katax believes that this Office unwittingly omitted for item 1 the phrase ‘subject to Withholding Tax.’ In this view, please confirm that the amount to be placed in “Total Sales/Revenues/Receipts/Fees” (item 1) shall pertain to those items of gross income where a withholding of a tax had been made and does not include those that are not subject to Withholding Tax.

Secondly, ETM feels sure that item 21 of Schedule 4C should be read as “Direct Charges -Materials/Supplies’ instead of ‘Direct Charges -Materials, Supplies and Facilities’. The term ‘Facilities’ is redundant because it is already well taken and accounted for either by item 22 ‘Direct Charges -Depreciation’, item 23 ‘Direct Charges -Rental’, or both. Please confirm that the amounts pertaining to Materials/Supplies shall only be placed in item 21, Schedule 4C while for the used of facilities, the proper accounting titles to be used may be item 22 ‘Direct Charges -Depreciation’, item 23 ‘Direct Charges -Rental’, or both.

Furthermore, Revenue Regulations No. 7-2007, in relation to Revenue Regulations No. 8-2007, requires all concerned taxpayers to use a very descriptive accounting titles. The purposes of the Secretary of Finance that can be read therefrom are to facilitate their understanding by the BIR auditor/investigator and to avoid confusion and irritation between the BIR auditor/investigator and the concerned taxpayer for many BIR auditors/investigators are superimposing their personal definition on the specific accounting titles used by less tax-educated taxpayer. For this Office’s information, Schedule 10 of the same Form used controlling accounts instead of what the laws of this State require. In this view, Kataxpayer Facebook is encouraging this Office to re-visit, re-work and replace such controlling accounting titles with ‘a very descriptive fashion’ accounting titles.

Finally, I am following up the resolution of this Office that pertained to Schedule 2A of the same Form.

I wrote this so that all the users of the said BIR Forms may avoid the potential tax troubles. I am also requesting the Discipline Office of the Office of the President, PACPO of Office of the Ombudsman and the Office of the Secretary of Finance to look into this possible ‘mess’

Emelino T Maestro asserts that aside from the required attachments stated in the said Form, an Ending Inventory List should also be attached thereto.

It has been a pain in the neck the attitude/behavior of many BIR officers/officials who consistently failed and refused and still fail and refuse to honor/obey the provisions of RA 9485/RA 6713. It is still a big question to my mind, ‘What devastating damages would they incur if they would follow the said laws?” Thanks a lot for reproducing this and timely replying.

Unit 419 Corporate 101, Mother Ignacia, Quezon City

PATREON.COM/EMELINOTMAESTRO

July 3, 2014

Erroneous BIR Form No. 1701 and 1702 by patreon.com/EmelinoTMaestro

I am not a FAN of incompetence and negligence.

The Philippine Supreme Court, in relation to Article 213, Revised Penal Code, says that to assess and collect a tax larger than what the law dictates is a criminal act punishable by law.

This is true and correct if the above BIR Official would not act on the injustice that the BIR Forms bring.

The revised BIR Form Nos. 1702-RT, 1702-MX and 1702-EX warned the users thereof, “IF THERE APPEARS TO BE ANY DISCREPANCIES BETWEEN THESE INSTRUCTIONS AND THE APPLICABLE LAWS AND REGULATIONS, THE LAWS AND REGULATIONS TAKE PRECEDENCE.”

It’s my belief and conviction that the use of their Schedule 2 which pertained to ‘Cost of Sales’ would unjustly increase the collection of Minimum Corporate Income Tax for it is inconsistent with the provisions of Section 27(E)(4), National Internal Revenue Code, as amended (NIRC).

The Schedule 2A thereof shows the ensuing, viz;

Cost of Sales (For Those Engage in Trading)

Merchandise Inventory, Beginning

Add: Purchases of Merchandise

Total Goods Available for Sale

Less: Merchandise Inventory, Ending

Cost of Sales

Accordingly, the 2nd paragraph of Section 27(E)(4), NIRC says that the ‘Cost of Sales’ shall consist of the following;

Invoice amount of the goods sold

Import duties

Freight-in/out

In-transit insurance

Therefrom, the Cost of Sales that must be presented in the said BIR Forms should be as follows, viz;

Merchandise Inventory, Beginning

Add: Purchases of Merchandise

Total Goods Available for Sale

Less: Merchandise Inventory, Ending

Invoice Amount of the Goods Sold

Add: Import duties

Add: Freight-in/out

Add: In-transit insurance

Cost of Sales

I wrote this so that all the users of the said BIR Forms may avoid the potential tax troubles that may happen in the nearest future.

I also request the Discipline Office of the Office of the President, PACPO of Office of the Ombudsman and the Office of the Secretary of Finance to look into this possible ‘mess’

RA 9485 requires this Office to take an action within five (5) days from receipt hereof. Thanks a lot for your immediate reply.

Unit 419 Corporate 101, Mother Ignacia, Quezon City

0992 801 0922

Tax Code prevails over PFRS and GAAP (Your Proof)

Letter of Authority to Assessment Notice to Collection Letter: Due Process

Opportunities that BIR audit investigation brings via patreon.com/EmelinoTMaestro

To tax more, BIR employs the Tax-evasion Assault, Benchmarking, Letter of Authority, Letter Notice, Oplan Kandado, Tax Mapping, Surveillance, Subpoena Duces Tecum and Assessment Notice. Contrary to the BIR’s written claims that these tactics and techniques are necessary to establish the needed harmonious relationship and continual partnership with the taxpaying public, they are too damaging to the taxpayers’ livelihood as well as to their mental and physical health. If you are ready, Katax ETM will teach you the true and accurate ways and means in protecting your lives, livelihoods and liberties from the highly questionable tactics and techniques being employed nowadays. 

Each module, that is (1) Tax Evasion, 2 Avoid & 2 Survive, (2) BIR Subpoena, No Longer a Problem, (3) Secrets in Handling BIR Letter of Authority, (4) BIR Letter Notice, a Blessing in Disguise, (5) Benchmarking -a BIR-TIP to Prevent BIR Audit, (6) BIR Oplan Kandado, Actually an Oplan Bukas (7) DeCoding WT Assessment, (8) DeCoding VAT Assessment, (9) De-Coding IT/OT Assessment, (10) Protecting Wealth from BIR Taxation, (11) BIR Surveillance, the Survival Tools, and (12) Laughing Away Tax Mapping, would equip you the important tools to be competent in handling successfully all questionable attacks from the BIR. See all of these at patreon.com/EmelinoTMaestro

Scholarship is now available for Tax Accounting Bookkeeper via patreon.com/EmelinoTMaestro

Removing the old habits such as bribing many BIR officials and nursing the ignorance of the laws of the States sometimes are very hard to break. Neither saying emphatically,  ‘ENOUGH IS ENOUGH’, ‘NO TO CORRUPTION’, or  ‘DON’T WANT TO BE THE WEEPING AND CRYING PERSON ANYMORE.’ or  ‘TIME TO CHALLENGE THE NORMS.’ would not change anything. ACTIONS propel the boat to reach its destination. ACTION can turn a clay into a castle. THE KEY HERE IS TO EQUIP YOUR ACCOUNTANTS, FINANCE PERSONNEL OR BOOKKEEPERS WITH THE LANGUAGE USED BY THE BIR SO THAT THEY CAN EASILY UNDERSTAND THE ACTUAL USERS OF THEIR FINANCIAL STATEMENTS, REPORTS AND RETURNS that is the BIR. 

The principle of “WHEN IN ROME, DO WHAT THE ROMANS DO” still holds and is very effective in removing self from the claws of graft and corruption. patreon.com/EmelinoTMaestro is encouraging you to register your most trusted employees whatever their educational backgrounds are, else, yourself, to be trained as THE MOST KNOWLEDGEABLE TAX ACCOUNTING BOOKKEEPER in your offices. 

Free lectures on how to handle the challenges and opportunities that the Tax Code and its revenue officials bring will be discussed according to the language and spirit of the law.

Thank you for sharing this to others.

Online Taxation for Business by Emelino T Maestro

Emelino T Maestro's wish, purpose or intention is to elevate the professionalism of start-up and small Accountants, Bookkeepers and Consultants and more importantly, those who are non-Accountants and non-Lawyers. Nonetheless, he is also pursuing the reclamation of their long lost integrity and self-respect.

In this line of reasoning, he is pursuing that the taxation-specialisation topics that may change the perspective and prospective of those who are concerned to their career, business-plan and value should be made accessible and available nationwide to these Accountants, Bookkeepers, Consultants and other concerned Filipinos.

A. Letter of Authority
1.
2.

B. Tax Mapping
1.
2.

C. Letter Notice
1.
2.

D. Oplan Kandado
1.
2.

E. Benchmarking
1.
2.

F. Inventory Taking
1.
2.

G. Subpoena Duces Tecum
1.
2.

H. Tax Preparer
1.
2.

I. Tax Documentation
1.
2.

J. Tax Accounting Bookkeeper
1.
2.

K. Tax Examiner
1.
2.

L. Taxation Professional
1.
2.

The details are available and accessible at teachable.com/taxationprofessionaluniversity.com. 
Register, Enrol. Pay. 0998 9793922, 0917 8610550
For details, email ETM @ go@taxaccountingguru.com

Online Taxation for Beginners by EmelinoTMaestro

Education is Empowering & Enabling.
Avail yourselves of the Important all about Taxation information.
(Visit, register and watch videos @ patreon.com/emelinotmaestro)
Topics that might change your perspectives and prospectives...

A. Register a business
1. Single proprietor (Entrepreneur)
2. Corporation
3. Cooperative
4. Joint venture
5. Partnership
6. Estate
7. Trust

B. Books of accounts
1. Registration
2. Types
3. Submission
4. Safekeeping, retrieval and disposal
5. Renewal

C. Invoices, receipts and other accountable forms
1. Registration
2. Types
3. Format
4. Safekeeping, retrieval and disposal
5. Reprinting

D. Retire a business
1. Single proprietor (Entrepreneur)
2. Corporation
3. Cooperative
4. Joint venture
5. Partnership
6. Estate
7. Trust

E. Update an information
1. Accounting method
2. Accounting period
3. Registered address
4. Registered activity
5. Tax type
6. Trade name
7. Representative
8. File
9. Clearance
10. Loss

F. Accounting
1. Types
2. Differences
3. Uses and purposes
4. Cycle
5. Sales
6. Optional standard deduction (OSD)
7. Allowable itemised deduction (AID)
8. Value added tax
9. Withholding taxes
10. Income tax
11. Creditable taxes
12. SSS premium
13. PHIC premium
14. HDMF premium

G. Withholding taxes
1. Expanded
2. Compensation
3. Final
4. Fringe benefit

H. Employee-employer relations
1. Registration
2. Transfer
3. Resignation
4. Retirement
5. Rehiring
6. Compensation
7. Withholding tax
8. Reportorial requirements

I. De minimis
1. Monetised unused vacation leave
2. Medical allowance
3. Rice subsidy
4. Uniform and clothing allowance
5. Actual yearly medical benefits
6. Laundry allowance
7. Achievement awards
8. Christmas and anniversary gifts
9. Daily overtime meals allowance
10. 13th month and other benefits

J. Fringe benefit
1. Housing
2. Expense arrangement
3. Household personnel
4. No-interest bearing advances or loans
5. Membership in social clubs
6. Holiday and vacation expenses
7. Foreign travel expenses
8. Education assistance
9. Insurance expenses

K. Audit notice
1. Letter of Authority (eLA)
2. Letter Notice (LN)
3. Mission Order (MO)
4. Access Letter (AL)
5. Open Cases (OC)

L. Non-compliance threat
1. Run After Tax Evader (RATE)
2. Subpoena Duces Tecum (SDT)
3. Oplan Kandado (OK)
4. Tax Mapping (TCVD)
5. Inventory Taking

M. Collection notice
1. Preliminary Collection Letter (PCL)
2. Final Collection Letter (FCL)
3. Final Notice Before Seizure (FNBS)
4. Warrant of Garnishment (WG)
5. Warrant of Distraint and Levy (WDL)

N. Reporting periods
1. Withholding tax (EWT, FWT, WTC)
2. Value added tax (VAT)
3. Income tax (IT)
4. Excise tax (ET)
5. Documentary stamp tax (DST)
6. Percentage tax (PY)
7. Fines and penalties (MC)
8. Reportorial requirements

O. Assessment notice
1. Preliminary Assessment Notice (PAN)
2. Formal Letter of Demand (FLD)
3. Details of Discrepancies (DD)
4. Final Assessment Notice (FAN)

P. Tax Agent accreditation (BIR)
1. Initial application
2. Renewal

Q. Real property valuation
1. Zonal value (ZV)
2. Fair market value (FMV)
3. Selling price (SP)

R. Tax Clearance
1. Bidding
2. Outstanding liability

S. Reportorial requirements
1. Balance Sheets
2. Revenue and Expenses
3. Cash Flows
4. Retained Earnings
5. Changes in Equity
6. Notes and Disclosures
7. VAT Summary Lists
8. Alpha Lists
9. Inventory List
10. Books of Accounts