The enforcement of summary remedies for the collection of taxes from the delinquent taxpayer is done through the issuance of the WDL and the service thereof to the taxpayer. The WDL serves as the basic instrument authorizing the BIR to implement summary remedies by distraint and/or levy of personal and real properties, respectively, of the delinquent taxpayer.
Procedures in the Preparation of the Warrant of Distraint and Levy (WDL)
In the preparation of the Warrant of Distraint and/or Levy (WDL), the Revenue Officer/Seizure Agent shall:
- Accomplish WDL-BIR Form No. 1301 or ITS BIR Form No. 0700, whichever is applicable, in quadruplicate (Annex 300-1.27);
Accurately fill-up the form, more particularly on the name and address of the taxpayer, the amount of tax due, the date of assessment, the applicable tax type, taxable period, and the assessment number.
The amount to be reflected in the warrant shall be the total amount of delinquency tax assessed for each type of tax including surcharge and interest, except compromise penalty, against a particular taxpayer as a result of investigation or audit, surveillance, etc. or for self-assessed taxes (i.e., returns filed with no payment or underpayment, dishonored checks, second installment etc.);
- Forward the accomplished form, together with the docket of the case, to the duly authorized official for affixture of his/her signature thereon; and
- Indicate the WDL number and post all relevant information in the Warrant Register maintained in the Office of the RDO/LTDO/LTCED in the manner prescribed in RR No. 3-69 and RDAO No. 1-2001.
The RD/RDO/LTDO Chief/ACIR-LTS or their authorized representative shall:
- Review and sign the accomplished WDL; and
- Return the signed WDL to the Revenue Officer/Seizure Agent for recording of the same in the Warrant Register and service thereof to the taxpayer.
Procedures in the Actual Service of the WDL
The actual service of a WDL occurs when the taxpayer or his/her/its duly authorized representative acknowledges the receipt of the warrant by voluntarily signing his/her name on the receipt portion of the warrant.
The Revenue Officer/Seizure Agent shall serve the WDL to the taxpayer within ten (10) days from receipt of the signed WDL.
If the taxpayer is located and is willing to acknowledge the receipt of the WDL:
- For the individual taxpayer, the Revenue Officer/Seizure Agent shall:
- Require the taxpayer/authorized representative, or a member of his household, of legal age and with sufficient discretion to sign on the acknowledgement receipt portion of all the copies of the warrant;
- Ascertain the identification of the receiving party through the presentation of valid identification (ID) [e.g. those issued by government agencies such as the driver’s license by the Land Transportation Office (LTO), the Social Security System (SSS) ID and the Government Security and Insurance System (GSIS)]. Reflect the particulars of the ID presented by the authorized representative in the WDL;
- Indicate the actual date and time of the service of the warrant;
- Sign over the printed name as the service officer/seizure agent of the warrant and indicate the office address and the telephone number where he/she can be contacted by the taxpayer or his/her duly authorized representative;
- Give the duplicate copy of the warrant to the taxpayer or his duly authorized representative;
- Attach the original copy of the warrant received by the taxpayer and the other copies thereof to the docket;
- Prepare and submit a progress report (Annex 300-1.28) to the RDO/LTDO/LTCED Chief not later than the following day of the actual service of the warrant and attach the same to the docket (Refer to CM 305.2.1- Notice of Tax Lien (NTL)/CM 305.3- Distraint of Personal Property/CM 307- Monitoring Warrant Enforcement).
- If the taxpayer is a corporation, the Revenue Officer/Seizure Agent shall
- Serve the WDL to the President, Vice-President, Manager, Treasurer or Comptroller or to any responsible person of the corporation; and
- Perform all the procedures as in the case of an individual taxpayer described above.
Procedures in the Constructive Service of the WDL
If the taxpayer (individual or corporation) refuses to acknowledge the receipt of the WDL, the Revenue Officer/Seizure Agent shall:
- Indicate the date and time of the service of the warrant on the acknowledgement receipt portion;
- Have two (2) credible witnesses, preferably two officers of the BIR, sign in the spaces provided for the witnesses;
- Sign over printed name as the service officer/seizure agent and indicate taxpayer’s residential/office address, contact number (e.g. telephone/cellular phone/mobile phone/e-mail) where the taxpayer could be reached;
- Leave the duplicate copy of the warrant at the premises of the taxpayer;
- Retain the original copy and other copies of the warrant to be attached to the docket; and
- Prepare and submit a progress report (Annex 300-1.28) to the RDO/LTDO/LTCED Chief not later than the following day of the constructive service of the warrant (Refer to CM 305.2.1-NTL/CM 305.3-Distraint of Personal Property/CM 307-Monitorint Warrant Enforcement).
Procedures in case of Non-service of the WDL
In case the taxpayer could not be located:
- If the taxpayer is an individual, the Revenue Officer/Seizure Agent shall:
- Exhaust all measures to locate the taxpayer. This can be done by checking with the barangay, public utility companies, local licensing office or LGUs, Bureau of Immigration and Deportation (BID) records, etc.;
- Make a progress report (Annex 300-1.28) to the RDO/LTDO/LTCED Chief stating therein the reasons for the non-service of WDL not later than the following day and attach the said report to the docket of the case;
- Exercise diligence in searching/locating for property/ies of the taxpayer, whether real or personal, tangible or intangible, that can be levied/distrained upon to satisfy the full payment of its/his/her unpaid tax liability; and
- Prepare a Notice of Tax Lien (NTL), refer to CM 305.2.1-NTL.
- If the taxpayer is a corporation, the Revenue Officer/Seizure Agent shall:
- Check with the Securities and Exchange Commission (SEC) the current status of the corporation if it has dissolved or has ceased operations);
- secure a copy of the Articles of Incorporation and the latest General Information Sheet (GIS) from the SEC;
- Check the records of the barangay, public utility companies, administrator of the building where the company formerly holds office to determine whether the corporation has already ceased operations;
- Undertake the following procedures if the corporation has been verified to have been dissolved as certified by the SEC and as determined by the revenue officer/seizure agent:
4.1. Verify if the company’s stockholders have unpaid subscriptions to the corporations authorized capital stock:
4.1.1. If there is no unpaid subscription:
18.104.22.168. Check the names and addresses of the key officers of the dissolved corporation; and
22.214.171.124. Prepare indorsement to the concerned Legal Office for institution of judicial action against these company officials.
4.1.2. If there are unpaid subscriptions:
126.96.36.199. Check the names and addresses of the stockholders with unpaid subscriptions;
188.8.131.52 Check the whereabouts of the stockholders from possible government offices where the necessary information may be obtained [e.g., the BID, National Bureau of Investigation (NBI), Philippine Postal Office, Commission on Elections (COMELEC), Department of Foreign Affairs (DFA), Land Transportation Office (LTO), etc.];
4.2. Compute the aliquot shares in the delinquent tax liability of each stockholder with unpaid subscription, as follows:
Unpaid subscribed capital stocks of stockholder
Delinquent Aliquot shares = Total unpaid subscriptions of all stockholders X Tax Liability of the corporation
Note that the aliquot shares of each stockholder shall not exceed his/her unpaid subscription without prejudiced to the filing of criminal case against the responsible official/s of the corporation.
4.3. Send a letter to the stockholders (Annex 300-1.29) with unpaid subscriptions, informing them of the company’s outstanding tax liability and their respective aliquot shares simultaneous with the service of the WDL to them;
4.3.1. If there is no response from the stockholder, prepare a Notice of Tax Lien (NTL) if there is leviable property. (Refer to CM 305.2.1-NTL).
4.3.2. If the stockholder responds to the letter and is willing to pay in full, record immediately collect the tax liabilities and record the case as closed in the GCL (Refer to CM 304.1- Taxpayer Intends to Pay Tax Liability in Full/CM 306- Monitoring of ARs/DAs/CM 307- Monitoring Warrant Enforcement).
4.3.3. If the amount paid by the stockholder is not sufficient to satisfy the corporation’s tax liability, and the stockholder is a responsible officer of the corporation, serve the WDL to the said stockholder and demand the immediate payment of the same; and
4.3.4. If the stockholder refuses to pay, prepare a Notice of Tax Lien (NTL) and refer the case to the Regional Legal Division/Legal Service for appropriate action. (Refer to CM 305.2.1.-NTL)
- Prepare and submit a progress report (Annex 300-1.28) not later than the following day after the service of the WDL to the stockholder.