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CM 401 - INVENTORY AND RECORDING OF ABSOLUTELY FORFEITED ASSETS

The Bureau shall maintain an inventory and proper recording of absolutely forfeited assets in order to enhance the control, management and disposition of these assets in accordance with RMO No. 83-2010. Said RMO prescribes uniform guidelines and procedures in recording of all transactions involving forfeited assets in the National Government (NG) Books of Accounts of the Regional Offices, as well as the reportorial requirements to effectively monitor the acquisition and disposition of all forfeited assets

There shall be a proper identification of all acquired assets, wherever situated, by all concerned Revenue Offices. A Monthly Report of Assets (Real Properties) Acquired/ Forfeited and the Monthly Report of Assets (Personal, including Intangible Properties) Acquired/Forfeited shall be submitted by the respective Revenue Regional Office (RRO), Revenue District Office (RDO), and other offices in custody of these acquired assets on or before the 15th day of the following month, for supervision and monitoring purposes and for the preparation of the Consolidated Inventory of Seized and Forfeited Assets (CISFA) by the Collection Enforcement Division (CED).

The Large Taxpayer Collection Enforcement Division (LTCED) and Large Taxpayer District Offices (LTDOs), thru the Large Taxpayer Service (LTS), shall likewise submit a Baseline Inventory of Acquired/Forfeited Assets to the Assistance Commissioner – Collection Service (ACIR-CS), Attention: The Chief, CED, for inclusion in the CISFA.

All acquired/forfeited real assets shall be recorded in the National Government (NG) Books of Accounts of the Regional Finance Division on the date these assets were consolidated and titled in the name of the Republic of the Philippines, after the lapse of the one (1)-year redemption period based on the fair market values of these properties or the amount of taxes due inclusive of all applicable penalties incident to delinquencies, whichever is lower, at the time of seizure/forfeiture.

The acquired/forfeiture real properties not yet titled in the name of the government shall be disclosed as a footnote to the quarterly Financial Statements being prepared by all concerned Regional Finance Divisions.

Seized/forfeited personal and intangible properties shall be recorded in the NG Books of Accounts based on the fair market values of these properties or the amounts of taxes due, inclusive of all applicable penalties incident to delinquencies, whichever is lower, at the time of seizure/forfeiture, in accordance with the prescribed accounting entries under RMO Mo. 83-2010.

The concerned Regional Finance Divisions shall be responsible in the recording of all acquired/forfeited personal tangible properties that are stored in place under their physical jurisdiction. For personal intangible assets acquired by any concerned office under the LTS, however the recording thereof in the NG Books of Accounts shall be done by the Revenue Accounting Division (RAD).

For purposes of enhancing the control and management of all acquired/forfeited assets, the following documents shall form part of each and every forfeited/acquired asset’s docket. These documents will be the initial basis for the proper recording thereof in the NG Books of Accounts:

  1. For Real Properties
    • Memorandum Assignment of Accounts Receivable (AR)/ Delinquent Account (DA) docket to the Case Officer for enforcement action
    • Preliminary Collection Letter
    • Final Notice Before Seizure
    • Warrant of Distraint and/or Levy
    • Notice of Tax Lien
    • Notice of Levy
    • Original Certificate of Title (OCT)/ Transfer Certificate of Title (TCT)/ Condominium Certificate of Title (CCT) of the property
    • Latest Tax Declaration
    • Tax Clearance Certificate
    • Location Map
    • Latest Appraisal Value (if there is reason to believe that the property has appreciated/ depreciated/ deteriorated tremendously)
    • Notice of Sale
    • Declaration of Forfeiture of Real Property
    • Minutes/ Report on the Results of the Auction Sale
    • Page Copy of the Newspaper Where the Property Was Published for Auction Sale (Publication)
    • Description of Properties/Pictures of Improvements based on Ocular Inspection Conducted
    • Copy of Final Assessment Notice (FAN), if applicable
    • Copy of the Final Decision on Disputed Assessment (FDDA), if applicable
    • Periodic Ocular Inspection Report/ Pictures of the Property
    • Letter of Appointment of Administrator
    • Memorandum Posting Document
    • Report on the Accounting of Fruits of Forfeited Assets
  2. For Personal Properties
  • Memorandum Assignment of Accounts Receivable (AR)/ Delinquent Account (DA) docket to the case officer for enforcement action
  • Preliminary Collection Letter
  • Final Notice Before Seizure
  • Warrant of Distraint and/or Levy
  • Notice of Actual Seizure of Personal Property
  • List of Distraint Properties Duly Acknowledged by the Taxpayer
  • Notice of Sale
  • Minutes/Report on the Results of the Auction Sale
  • Copy of Final Assessment Notice (FAN), if applicable
  • Copy of Final Decision on Disputed Assessment (FDDA), if applicable
  • Periodic Ocular Inspection Report/ Pictures of the Property
  • Letter of Appointment of Administrator
  • Memorandum Posting Document
  • Report on the Accounting of Fruits of Forfeited Assets

 Accordingly, the CED, LTCED/LTDOs, RAD, and the concerned Regional Offices and RDOs shall review, analyze, and reconcile the recorded amounts of acquired/forfeited assets in the Inventory Report and make the necessary adjustment and/or correcting entry in the NG Books of Accounts, whenever appropriate, in accordance with the accounting policies on acquired prescribed by the Commission on Audit under the Government Accountancy and Financial Management Information Sector (COA-GAFMIS)

The Chief of the Regional Administrative Division shall be the sole custodian of all the dockets and original documents pertaining to all acquired/forfeited/sold/disposed assets under the jurisdiction of the concerned Regional Offices. However, with respect to the dockets and documents pertaining to personal intangible properties acquired/forfeited by any concerned LTS offices, the Records Division in the National Office shall be responsible for the custody and safekeeping thereof.

Procedures in the Conduct of the Inventory and Recording of Absolutely Forfeited Assets

The Revenue District Office (RDO) shall:

  1. Conduct and maintain an inventory of all dockets/documents pertaining to acquired/forfeited assets;
  2. Prepare and submit to the concerned Regional Director (RD), thru the Regional Collection Division, the Monthly Report of Assets (Real Properties) Acquired/Forfeited and Monthly Report of Assets (Personal, including Intangible Properties) Acquired/Forfeited copy furnished the ACIR-CS, thru the CED, on or before the 15th day of the following month;
  3. Prepare and submit to the concerned RD, thru the Regional Collection Division, the Annual Inventory Report of Assets (Real Properties) Acquired/Forfeited and Annual Inventory Report of Assets (Personal, including Intangible Properties) Acquired/Forfeited, on or before the 15th day of January of the following year;
  4. Forward all the pertinent documents/papers bearing on the acquired properties (real and personal) to the Regional Administrative Division for safekeeping, copy furnished the Regional Collection Division, on or before the 15th day of the following month, and after the lapse of the one (1)-year redemption period, in case of real properties; and
  5. Maintain photocopies of all documents transmitted to the Administrative Division.

The Regional Collection Division shall:

  1. Maintain an updated inventory and record of acquired/forfeited properties within the revenue region;
  2. Receive the following reports from the RDOs:
  • Monthly Report of Assets (Real Properties) Acquired/Forfeited (Annex 400-1.1)
  • Monthly Report of Assets (Personal, including Intangible Properties) Acquired/Forfeited (Annex 400-1.2)
  • Annual Inventory Report of Assets (Real Properties) Acquired/Forfeited (Annex 400-1.3); and
  • Annual inventory Report of Assets (Personal, including Intangible Properties) Acquired/Forfeited (Annex 400-1.4).
  1. Monitor, evaluate, consolidate the reports received from the RDOs and submit to the ACIR-CS, thru the CED:
  • Consolidated Monthly Inventory Report of Assets (Real Properties) Acquired/Forfeited (Annex 400-1.5) on or before the 20th day of the following month;
  • Consolidated Monthly Inventory Report of Assets (Personal, Including Intangible Properties) Acquired/Forfeited (Annex 400-1.6) on or before the 20th day of the following month);
  • Consolidated Annual Inventory Report of Assets (Real Properties) Acquired/Forfeited (Annex 400-1.7) on or before the 20th day of January every year; and
  • Consolidated Annual Inventory Report of Assets (Personal, including Intangible Properties) Acquired/Forfeited (Annex 400-1.8) on or before the 20th day of January every year.

In cases of defects, errors or inconsistencies in the received reports, communicate the same immediately to the concerned RDOs for necessary revisions/corrections; and

  1. Submit to the Regional Finance Division the Consolidated Monthly Inventory Report on Assets (Real and Personal) Acquired/Forfeited on or before the 20th day of the following month (Annexes 400-1.5 and 400-1.6).

The Regional Administrative Division shall:

  1. Act as the repository of all dockets, records, official documents bearing on all acquired/forfeited assets as well as the ownership documents (TCTs, OCTs, CCTs), tax declarations (TDs), certificates of motor vehicle registrations, etc.) on the acquired/forfeited, whether or not the corresponding titles or registration certificates in support of the ownership thereof have been transferred in the name of the Republic of the Philippines;
  2. Receive from the RDO the Monthly Report of Assets (Real Properties) Acquired/Forfeited (Annex 400-1.1) and the Monthly Report of Assets (Personal, including Intangible Assets) Seized and Forfeited (Annex 400-1.2) together with the original copies of all pertinent documents;
  3. Receive from the LTS the consolidated monthly reports together with the original copies of all pertinent documents on assets acquired/forfeited by the LTDO/LTCED that are located within the jurisdiction of the revenue region; and
  4. Maintain and safe-keep the records and pertinent documents bearing on all acquired/forfeited assets under the physical jurisdiction of the revenue region.

The Regional Finance Division shall:

  1. Receive from the Regional Collection Division the Monthly Consolidated Report on Assets Acquired/Forfeited for recording in the NG Books together with the certified copies of the following documents, among others:

For Real Properties:

  • Location Plan and Vicinity Map
  • Owner’s copy of OCT/TCT/CCT and TD;
  • Ocular inspection report on the description of property and the improvements thereon; and
  • Certification of the prevailing zonal value of the property at the time of forfeiture.

For Personal Properties:

  • Ocular inspection report on the description of distraint properties duly acknowledged by the taxpayer or his duly authorized representative; and
  • Registration Certificates of motor vehicles by land, air or sea duly issued by the appropriate government registry office.

For Intangible Properties:

  • Certificate of Registration issued by the concerned government registry office, if applicable;
  • Copy of Stock Certificates; and
  • Copy of Bond/Debenture Certificates.
  1. Validate the accuracy and completeness of the information/date on the Monthly Consolidated Report on Assets Acquired/Forfeited;
  2. Coordinate with the concerned RDO for any discrepancy noted on the report pertaining to acquired/forfeited assets or existence of any un-transmitted and/or uncertified supporting document;
  3. Record all the acquired/forfeited (real and personal) assets, together with the income derived/received from civil and real fruits of these acquired assets, in the Bureau’s NG Books of Accounts in accordance with the accounting policies prescribed under COA-GAFMIS:
  • Record acquired/forfeited real assets already titled in the name of the Republic of the Philippines, on the date these assets were consolidated; and
  • Disclose acquired/forfeited (real and personal) assets, including the intangible properties, that were acquired but the titles of which were not yet transferred in the name of the government in the Notes to the Financial Statements;
  1. Maintain and update the Subsidiary Ledger of each account pertaining to acquired//forfeited assets recorded in the NG Books of Accounts; and
  2. Prepare and submit to RAD the Monthly Trial Balance (MTB) and supporting schedules for all transactions recorded in the NG Books on or before the 7th day of the following month.

The Regional Director shall:

  1. Coordinate with the concerned RDO and the Chiefs of the Regional Collection Division, Finance and Administrative Divisions on the recording, management, and disposition of all acquired/forfeited assets under the jurisdiction of the Regional Office.

The Large Taxpayer Collection Enforcement Division (LTCED) and Large Taxpayer District Office shall:

  1. Conduct a regular inventory of all case dockets and documents pertaining to all acquired/forfeited assets;
  2. Turn-over the following records/documents, thru the ACIR, LTS, to the concerned Regional Offices having physical jurisdiction over the acquired/forfeited assets pursuant to the provisions of RMO No. 83-2010:

       To the RDO, except in cases of intangible properties such as shares of stocks, bonds, etx., for disposition/sale:

  • Certified copy of the Final Assessment Notice (FAN)/ Final Decision on Disputed Assessment (FDDA) concerning the tax liability of delinquent taxpayer, in case the delinquent account emanated from audit/investigation;
  • Certified copy of the Collection Letter, in case the delinquent account arose from unpaid tax liability due to dishonored check or unpaid self-assessed tax;
  • Certified copy of the Certification of Forfeiture of the acquired/forfeited assets; and
  • Certified inventory of acquired/forfeited properties.

To the Regional Administrative Division, for safekeeping:

  • Original owner’s copy of title, certificate of registration, Tax Declaration of the property; and
  • Original/certified copies of the pertinent documents relating to the acquired/forfeited assets.

To the Regional Finance Division, thru the Regional Collection Division, for recording purposes in the NG Books of Accounts:

  • Certified copy of the Final Assessment Notice (FAN)/ Final Decision on Disputed Assessment (FDDA) concerning the tax liability of delinquent taxpayer, in case the delinquent account emanated from audit/investigation;
  • Certified copy of the Collection Letter, in case the delinquent account arose from unpaid tax liability due to dishonored check or unpaid self-assessed tax;
  • Certified copy of the Certificated of Forfeiture of the acquired/forfeited assets;
  • Certified inventory of acquired/forfeited properties;
  • Certified owner’s copy of title, certificate of registration, Tax Declaration of the property; and
  • Certified copies of the pertinent documents relating to the acquired/forfeited assets.
  1. Prepare and submit to the ACIR-LTS, the Monthly and Annual Consolidated Report on Intangible Assets Acquired/Forfeited together with the certified photocopies of all the following supporting documents, among others, on or before the 15th day of the following month and on or before January 15 of the following year, respectively.

The Large Taxpayer Service shall:

  1. Received from the LTCED and LTDO the Monthly and Annual Consolidated Report on Intangible Assets Acquired/Forfeited together with the original copies of all the supporting documents;
  2. Consolidate the Monthly and Annual Report on Acquired/Forfeited Assets received from LTCED and LTDOs;
  3. Forward the Consolidated Monthly and Annual Report on a Acquired/Forfeited Properties and turn-over all the original and certified copies of supporting documents to the concerned regional offices having jurisdiction over the physical locations of the acquired/forfeited real, personal and intangible properties, for safekeeping, recording, management and eventual disposition thereof; and
  4. Submit copies of the consolidated reports to the CED for monitoring purposes and for the preparation of the Bureau’s Monthly and Annual Consolidated Inventory of Seized and Forfeited Assets (CISFA), for submission to the DCIR-OG, ACIR-CS. And COA-RA, every 20th day of the following month and every 20th day of the following year, respectively.

The Collection Enforcement Division shall:

  1. Receive the following reports from the LTS offices, RDOs, and Regional Collection Divisions for analysis and monitoring purposes:
  • Consolidated Monthly Inventory Report of Assets (Real Properties) Acquired/Forfeited;
  • Consolidated Monthly Inventory Report of Assets (Personal, including Intangible Properties) Acquired/ Forfeited;
  • Consolidated Annual Inventory Report of Assets (Real Properties) Acquired/Forfeited; and
  • Consolidated Annual Inventory Report of Assets (Personal, including Intangible Properties) Acquired/Forfeited.
  1. Analyze, evaluate and monitor the accuracy of the information reflected in the above reports and coordinate with the concerned LTS Offices, Regional Collection Division and RDOs. Any discrepancies noted in the reports received for necessary corrections and/or amendments; and
  2. Prepare and submit to the Commissioner, DCIR-Operations, ACIR-CS, Chief-RAD, and the COA Resident Auditor the Annual Consolidated Inventory of Seized and Forfeited Assets (CISFA)- Real Properties/Personal Properties (Annexes 400-1.9/ 400-1.10) on or before January 15 of the following year.

The Revenue Accounting Division shall:

  1. Received from the CED the Annual CISFA;
  2. Receive from the ACIR-LTS the following documents, among others pertaining to acquired/forfeited personal intangible assets:
  • Certificate of Registration issued by the concerned government registry office, if applicable;
  • Copy of Stock Certificates; and
  • Copy of Bond/Debenture Certificates
  1. Record the acquired/forfeited assets by LTS in the NG Books of Accounts;
  2. Receive the Regional Monthly Trial Balance (MTB) from the Regional Finance Division relative to the recorded acquired/forfeited assets, together with all the supporting documents and schedules;
  3. Consolidate the MTBs of the Regional Offices with the National Office Trial Balance (NOTB) for submission to the COA and the Department of Budget and Management (MDB), together with the supporting schedules/statements on or before the 10th day of the following month;
  4. Reconcile the information reflected on the Annua CISFA received from CED with the information reflected on the MTB submitted by the Regional Finance Division; and
  5. Coordinate with the CED and the concerned Regional Finance Divisions any discrepancies noted on the reports received for necessary corrections, adjustments and/or amendments thereon.

The ACIR-Collection Service/Deputy Commissioners-Operations Group shall:

  1. Review, evaluate, and forward to the Commissioner, for final review and approval, the recommendations on the appropriate courses of action to be undertaken by the concerned implementing offices responsible for the acquisition, maintenance, sale/disposition, and recording of forfeited assets.