CM 403 - MANAGEMENT OF UNSOLD OR UNDISPOSED ACQUIRED ASSETS
The BIR is mandated to sell or dispose the acquired assets thru public auction, negotiated sale or transfer to other government agencies, whichever is applicable under existing laws, rules and regulations. However, until the ultimate disposition of these assets, the BIR is held responsible for the proper safekeeping and maintenance of such assets.
The RDO having jurisdiction over the place where the acquired real property is physically located, including all acquired assets forfeited by the LTS, except personal intangible properties, shall be the administrator/custodian thereof.
The acquired personal properties which cannot be sold at public or private sale shall be stored in a suitable storage place in order to preserve the said properties. Furthermore and in the event that these assets could not be sold or disposed of, the same may be used/utilized by any concerned BIR office in the course of the discharge of its official functions, only after prior consultation with and approval by the COA.
Until such time that the acquired properties are sold or disposed, the regular income and/ or fruits of these assets, if any (e.g. rentals of land/buildings, income from all types of transportation vehicles, harvests from farmlands, dividends from shares of stocks, etc.), shall be duly accounted for by the designated administ rator/custodian, deposited to the account of the BTr, and recorded as part of the tax collections, in accordance with the existing policies, rules and regulations.
A Monthly Report on Income Derived from Acquired/Forfeited Assets shall be prepared by the property administrator/custodian in quadruplicate copies and the same shall be submitted by all concerned Offices, not later than the 10th day of each month, to be distributed to the Regional Finance Division (original), for recording purposes in the NG Book of Accounts, the Regional Collection Division (duplicate), CED (triplicate) for monitoring purposes, and for RDO file (fourth copy). In case of existence of other income on the properties (i.e. stock dividends, interests, farm and livestock's produce, etc.), the concerned RDO shall submit a semi-annual report to the Regional Finance Division for recording purposes in the Bureau's NG book of accounts.
Any natural, industrial or civil fruits collected or received arising from acquired/forfeited assets shall be recognized as tax collections by the concerned RDO having physical jurisdiction over these acquired assets at the time of remittance thereof to the BTr thru any AGDB.
The administrator/custodian of acquired personal properties shall periodically conduct ocular inspections of the said assets to determine the current physical condition and value thereof (e.g. the assets have physically deteriorated, have become obsolete due to advancement of technology, have lost their market values, etc.). The results of these physical inspections shall be used as bases in the preparation of the appropriate recommendation to the COA, in coordination with the Collection Enforcement Division, in order to forestall further deterioration and incurrence of losses in the handling of these assets.
Procedures in the Management of the Unsold or Undisposed Acquired Assets
The RDO shall:
- Appoint a Revenue Collection Officer (RCO) to act as custodian of the acquired/ forfeited assets to perform and discharge the following functions and responsibilities:
- Administer and manage the property;
- Maintain and preserve all the acquired/forfeited properties in a manner that would enhance their values;
- Gather the civil fruits and/ or income of acquired properties, pending its absolute sale or disposal, in accordance with the existing policies and procedures:
- Cause the issuance of the requisite official receipts on the civil fruits and/or income received, and the immediate deposit thereof to the Authorized Government Depository Bank (AGDB) for the account of the Bureau of Treasury (BTr) or the Treasurer of the Philippines (TOP) pursuant to existing policies and procedures;
- Dispose immediately at reasonable prices all perishable items received as real fruits of the acquired/forfeited assets; and
- Prepare a Memorandum Posting Document (Annex 400-1.14) containing the following information:
Name of the person from whom the income was received;
Nature of income (e.g. rentals, dividends, interests, proceeds from sale of farm harvests, livestock produce, etc.);
Period covered by the payment, if applicable; Amount/Value of income received;
Date of receipt of income ;
Official receipt number issued;
Brief description of the acquired/forfeited asset (e.g. "Real Property-Building located at (address); Personal Property ABC Co. shares of stocks, etc.);
Name of the taxpayer from whom the property was seized; Date of remittance of income to AGDB; and
Name of AGDB
The Memorandum Posting Document shall be prepared and filed with the docket of each and every acquired/ forfeited asset. The entries on this document must always be updated to reflect all the transactions made regarding receipts of natural, civil and industrial fruits from acquired/ forfeited assets.
- Prepare and submit a Monthly Report on Income Derived from Acquired/ Forfeited Assets (Annex 400-1.15) to the Regional Director, thru the Chief, Regional Collection Division, on or before the 10th day of the following month;
- Act as representative of the government in the stockholders' /Board of Directors' meeting, whichever is appropriate, of the corporation where the government has acquired substantial shares of stocks, in order to protect the interest of the government;
- Recommend to the Regional Director the allocation of the necessary funds to defray the costs of maintenance, preservation /upkeep of all acquired/forfeited assets;
- Prepare and submit to the Regional Director, thru the Regional Collection Division, a Monthly Evaluation Report on the Status of Fully Depreciated and/ or Obsolete Acquired/Forfeited Personal Properties (Annex 400-1.16) which have deteriorated, became obsolete and/or have been fully depreciated under its management, and the recommendations on the appropriate actions to undertake on these assets on or before the l S111day of the following month; and
- Prepare and submit to the concerned Regional Director, thru the Regional Collection Division, the Annual Report on Income Derived from Acquired/ Forfeited Assets (Annex 400-1.17) and the Annual Evaluation Report on the Status of Fully Depreciated and/or Obsolete Acquired/Forfeited Personal Properties (Annex 400-1.18), on or before the 15th day of January of the following year.
The Regional Collection Division shall:
- Receive the following reports from the RDOs:
- Monthly and Annual Evaluation Reports on the Status of all Acquired/ Forfeited Personal Assets which have deteriorated, became obsolete and/or have been fully depreciated and the recommendations on the appropriate actions to undertake on these assets; and
- Monthly and Annual Reports of Income Derived from Acquired Assets.
- Monitor, evaluate, consolidate the reports received from the RDOs and submit to the ACIR-CS, thru the CED:
- Consolidated Monthly Report of Income Derived from Acquired/Forfeited Assets (Annex 400-1.19) on or before the 15th day of the following month;
- Consolidated Monthly Evaluation Report on Fully Depreciated and/or Obsolete Acquired /Forfeited Personal Assets (Annex 400-1.20) which have deteriorated, became obsolete and/or have been fully depreciated- on or before the 15th day of the following month;
- Consolidated Annual Report of Income Derived from Acquired Assets (Annex 400-1.21) on or before the 20th day of January every year; and
- Consolidated Annual Evaluation Report on Fully Depreciated and/or Obsolete Acquired /Forfeited Personal Assets (Annex 400-1.22) which have deteriorated, became obsolete and/or have been fully depreciated and the recommendations on the appropriate actions to undertake on these assets- on or before the 20th day of January every year.
In cases of defects, errors or inconsistencies in the received reports, the same shall be immediately communicated to the concerned RDOs for necessary revisions/ corrections.
- Submit to the Regional Finance Division the Consolidated Monthly and Annual Reports of Income Derived from Acquired /Forfeited Assets not later than the 15th day of the following month and the 15th day of January the following year, respectively;
- Conduct covert and overt operations, on periodic and surprise spot-checking bases, the sites where the acquired real and personal assets are located and/or stored for purposes of verifying the accuracy of the reported income from civil and real fruits of acquired/forfeited assets by the designated administrator/custodian thereof, and uncovering incidences of unreported receipts by any person of such fruits of acquired/forfeited assets, as well as the discovery of unauthorized use of these assets for unofficial purposes; and
- Prepare and submit to the Regional Director the appropriate reports and recommendations on the results of the above operations conducted, for purposes of improving the management of acquired/forfeited assets and the imposition of administrative sanctions against any erring revenue personnel, if warranted.
The Regional Finance Division shall:
- Receive from the Regional Collection Division the Consolidated Monthly and Annual Reports oflncome from Acquired/Forfeited Assets and record in the NG Book of Accounts (Refer to CM 401-Inventory and Recording of Absolutely Forfeited Assets);
- Prepare the recommendation for the write-off of unserviceable, deteriorated/ obsolete/fully depreciated acquired/forfeited properties reflected in the CISFA, indicating all the reasons/basis therefor, in accordance with the existing and applicable COA rules and policies for such write-off; and
- Effect the write-off of the recorded acquired/forfeited assets in the NG Books of Accounts upon receipt of the approval or authority for such write-off from the
The Regional Director shall:
- Prepare a request addressed to the COA, thru the Commissioner, for the approval of the write-off of the unserviceable, deteriorated/obsolete /fully depreciated acquired/forfeited properties reflected in the CISFA;
- Approve the funding to defray the necessary expenses for the maintenance, preservation and upkeep of all acquired/forfeited assets; and
- Receive the report from the RDO on the results of each and every stockholders'/ board of directors' meeting attended, whenever practicable, in case the Bureau owns substantial shares of stocks arising from forfeiture.
The Collection Enforcement Division shall:
- Monitor the management, and safekeeping of acquired/forfeited assets by the concerned LTS Offices, RDOs and Regional Offices;
- Require the proper identification of all acquired properties, wherever situated, by all concerned Revenue Offices;
- Conduct ocular inspections of all acquired assets, in coordination with the concerned RDOs/RROs, to obtain first-hand observation of the current status and conditions of these assets;
- Receive the following reports from the LTS offices, RDOs, and Regional Collection Divisions for analysis and monitoring purposes:
- Consolidated Monthly Report of Income Derived from Acquired Assets;
- Consolidated Annual Report of Income Derived from Acquired Assets;
- Consolidated Monthly Evaluation Report on the Status of all Acquired/ Forfeited Personal Assets which have deteriorated, became obsolete and/ or have been fully depreciated;
- Consolidated Annual Evaluation Report on the Status of all Acquired / Forfeited Personal Assets which have deteriorated, became obsolete and/or have been fully depreciated, and the recommendations on the appropriate actions to undertake on these assets; and
- Report on the write-off of acquired/forfeited property, if any, from the inventory of acquired/forfeited assets duly approved by the Commissioner and with the prior concurrence by the COA.
- Analyze, evaluate and monitor the accuracy of the information reflected in the above reports and coordinate with the concerned LTS Offices, Regional Collection Divisions and RDOs, any discrepancies noted in the reports received for necessary corrections and/or amendments;
- Review and analyze the Evaluation Reports on the Status of all Acquired/ Forfeited Personal Assets, and the recommendations made by the concerned LTS Offices, Regional Offices, and RDOs on the appropriate actions to undertake on these assets; and
- Consolidate and submit to the Commissioner, thru the DCIR-OG and ACIR-CS, the recommendations on the appropriate actions to undertake on these assets, for appropriate review and
The ACIR-Collection Service/Deputy Commissioners-Operations Group shall:
- 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.
The Commissioner of Internal Revenue shall:
- Approve/disapprove the recommended action relative to the deteriorated, unserviceable, obsolete and/or fully depreciated acquired /forfeited assets.