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
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