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CM 305.8 - LEVY ON REAL PROPERTY

The levy on the delinquent taxpayer’s real property may be effected before, simultaneously or after the distraint of any personal property belonging to him.[1]

In case the warrant of levy is not issued before or simultaneously with the warrant of distraint on personal property and the distrained personal property is insufficient to satisfy the liability, the Commissioner or his duly authorized representative shall proceed with the levy on the delinquent taxpayer’s real property within thirty (30) days after the execution of the distraint on personal property, or vice-versa.

The Notice of Levy (NOL)-(BIR Form No. 2802-A), a duly authenticated certificate showing the name of the delinquent taxpayer; the amounts of the tax and penalties due; and the description of the property upon which the levy is made, shall be prepared by the Commissioner or his duly authorized representative.

The NOL shall be served personally upon the Register of Deeds of the province, city or municipality where the real property is located so that the same can operate with the force of legal execution throughout the Philippines. A copy of the duly served NOL shall also provided the delinquent taxpayer for his/her/its information and guidance, and in the spirit of due process. In case the property to be levied its untitled and the only evidence of ownership is the tax declaration, the NOL shall be served upon the Assessor’s Office of the province, city or municipality where the real property is located. If the delinquent taxpayer is absent from the Philippines, a copy of the NOL shall be sent though registered mail or served to his agent or the manager of the business in respect to which the liability arose. Should there be no such person present, the NOL shall be sent through registered mail or served to the occupant of the real property that is the subject of levy.

In case the offices of the Register of Deeds or Assessor’s offices having jurisdiction over the real property to be levied are located in distant places, the concerned levying office may coordinate with the RDO having physical jurisdiction over the location of such property for the actual service of the NOL. The original, duplicate, triplicate and quadruplicate copies of the duly served NOL shall be returned to the levying office immediately upon service thereof. The duplicate NOL copy shall be attached to the case docket, the triplicate copy to the concerned delinquent taxpayer, for information purposes and the quadruplicate copy for file by the levying office.

The NOL should be completely and accurately accomplished. Any mistake or error in the NOL with respect to the description of the real property, (i.e. title number, area, exact location, registry volume and page number), the name of the owner-taxpayer against whom the tax is levied, amount of taxpayer’s liabilities and details of the issued FAN will render the auction sale as null and void.

Real properties under custodia legis or property held in trust shall not be subject of any levy. However, the BIR may file a third party claim on these real properties.[2]

A report on the service of the levy shall be prepared and submitted to the following revenue officials by the Seizure Agent/Revenue Officer within ten (10) days from his/her receipt of the warrant.[3]

-              Revenue District Officer and to the Regional Director, thru the Chief, Collection Division, for regional cases;

-              Chief LTDO and to the ACIR, Large Taxpayers Service, thru the Chief, LTCED, for LTDO and LT cases; and

-              A monthly consolidated regional report on the issuance and service of the NOL shall be prepared and submitted by the Regional Director, and the ACIR, Large Taxpayers Service to the ACIR-Collection Service, thru the CED on or before the 15th day of the following month. Thereafter, a monthly consolidated national report on the issuance and service of the NOL shall be prepared and submitted to the Commissioner by the CED. Thru the ACIR-CS, not later than 20th day of the following month.

Procedures in the Preparation of the Notice of Levy

The RDO/LTDO/LTCED shall:

  1. Fill up the NOL – (BIR Form 2802A)(Annex 300-1.51) for the signature of the authorized signatory, which shall have the following information:

1.1.        Name and address of the Register of Deeds/ City or Municipal Assessor’s Office to whom the NOL will be served;

1.2.        Name and address of the delinquent taxpayer, location of the property, and OCT/TCT/CCT/TD number/s;

1.3.        The kind and amount of the tax and the penalties due from the taxpayer; and

1.4.        Request for annotation of the Notice of Levy at the back of the OCT/TCT/CCT/TD, with instruction that no transfer or any kind of disposition of such real property(ies) shall be made without the prior consent or authority of the Commissioner of Internal Revenue or his duly authorized representative.

  1. Upon receipt of the signed Notice of Levy, file the NOL personally with the Register of Deeds or Assessor’s Office, as the case may be, of the province or city where the property is located;
  2. Require the receiving officer of the Register of Deeds/ Assessor’s Office to acknowledge receipt on all the copies of the NOL and leave the original copy for annotation of the same in the OCT/TCT/CCT/TD; and
  3. Attach the remaining copies of the NOL, duly acknowledged by the Register of Deeds or Assessor’s Office, to the docket of the case for records purposes.

Service of Notice of Levy

The Revenue Officer/Seizure Agent shall:

  1. Serve by registered mail to the delinquent taxpayer the duplicate copy of the Notice of Levy duly acknowledged by the Register of Deeds or the Local Assessor’s office, as the case may be;
  2. Personally serve the NOL to the individual/corporate taxpayers, in case the NOL is not received by the taxpayer through mail, as follows:

               2.1.        If the taxpayer is an Individual:

2.1.1.     If the individual taxpayer can be located. Physically serve the NOL. If the taxpayer refuses to accept the NOL, ask two (2) credible witnesses, preferably BIR officers to sign the NOL and leave the copy of the NOL at the premises where the real property is located or at the taxpayer’s residence; and

2.1.2.     If the individual taxpayer is abroad, locate taxpayer’s agent/representative and serve the NOL to the agent/representative. If the agent is not located, serve the NOL to the occupant of the property covered by the NOL. Post the facts of the NOL on the property levied upon and publish in a newspaper of general circulation.

               2.2.        If the taxpayer is a Corporation or Partnership:

2.2.1.     If the taxpayer can be located, serve the NOL to the President/Vice-President/Manager/Treasurer or Comptroller or to any responsible officer of the corporation/partnership;

2.2.2.     If the officer refuses to acknowledge the receipt of the NOL, ask two (2) credible witnesses, preferably BIR officers, to sign the NOL and leave a copy at the premises where the real property is located; and

2.2.3.     If the corporation can not be located, serve the NOL to the occupant of the property covered by the NOL. Post the facts of the NOL to the property levied upon, and publish in a newspaper of general circulation.

  1. Prepare and submit a report to the RDO/Chief, LTDO/Chief, LTCED on the levy of real property and record the details thereof in the Registry of Forfeited properties maintained in the district/LTS offices for the purpose CM 307-Monitoring Warrant Enforcement); and
  2. Proceed with the advertisement of the sale within twenty (20) days after the service of the Notice of Levy (Refer to CM 305.9 Advertisement and Sale of Seized Real Property).

 

[1] Section 207(B) of the NIRC of 1997, as amended.

[2] Springer vs. Odlin, 3 Phil.344;23 C.J. p.357, Sec. 107- “It is a well-established doctrine in pratically every jurisdiction that money deposited with a clerk of court is exempt from attachment and not subject to execution.”

[3] Section 207 (B) of the NIRC of 1997, as amended.