The primary mandate of Bureau of Internal Revenue is to collect internal revenue taxes which are utilized by the government in providing basic and other vital services to the country and people. In the course of performing its core functions, the BIR is authorized to seize personal and real properties of delinquent taxpayers who failed to pay their tax obligations within the time prescribed for its payment and sell these properties thru public auction. In vase of failed auction, these properties are declared forfeited assets. Personal properties become absolutely forfeited properties while real properties are subject to redemption within one (1) year from the date of forfeiture.[1]

The BIR is required to dispose all these acquired assets thru another public auction, or thru a negotiated sale, after two (2) failed auctions. However, some acquired assets cannot be disposed easily due to budget constraints, real property arrearages of the former owner, poor marketability, among others. Real properties classified as suitable for agriculture are transferred to the Department of Agriculture (DAR) for proper disposition.

While absolutely forfeited properties are considered as assets of the government, the same are not yet recognized as tax collections of the Bureau until the same are sold or disposed of in cash. [2] Considering further that the Bureau is not in the business of holding these properties in anticipation of any speculated or anticipated increase in the value thereof in the future, the immediate sale or disposition of each and every forfeited asset is essential for prudent management of these assets. In addition, prolonged possession of these assets only entail incurrence of unnecessary additional maintenance and preservation costs that could otherwise be spent for other more productive endeavors, and, at the same time, obviate potential deterioration of their physical and technological conditions that could eventually lead to the loss of their respective monetary values.


For purposes of this Manual and in order to provide clarity and better understanding of the policies and procedures in the implementation thereof, the words and phrases herein provided are defined as follows:

  1. Personal Property – consists of those movable properties (chattels/personalty) which may include personal tangible assets (e.g. machineries, furniture and fixture, equipment, etc.) or intangible assets (e.g. shares of stocks, deposits in banks, bonds, securities, etc.)
  2. Real Property – refers to any land and the improvements introduced to it that are made by human efforts (buildings, acquisition of various property rights, machineries that are permanently attached to the land, and the like).
  3. Acquired/Forfeited Assets – refer to personal properties subject of an auction sale under Section 209 Tax Code, as amended, that were declared purchased in favor of the government pursuant to Section 212 of the Tax Code, as amended, as well as the real properties subject of an auction sale under Section 213 of the Tax Code, as amended, that were declared forfeited in favor of the government pursuant to Section 215 of the Tax Code, in partial or full satisfaction of the delinquent taxpayer’s tax liabilities where, in case of real properties, the one (1)-year redemption period has already lapsed.
  4. Authorized Government Depository Banks (AGDB) – refers to a bank where government entities are allowed to deposit their funds and maintain depository accounts, or by way of exception, a bank authorized by the Department of Finance (DOF) and the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) to be a government depository bank.
  5. National Government (NG) Books of Accounts – refers to one of the two (2) sets of accounting books required to be maintained by the BIR, as an agency of the national government, for purposes of recording all income and/or tax collections that could not be disbursed by the agency in its operations but are required to be remitted directly to the Bureau of Treasury (BTr).
  6. Notice of Sale for Acquired/Forfeited Assets (NOSAFA) – refers to the public notification for the auction sale of acquired/forfeited assets which contains, among others, the list of the assets to be sold including their respective classifications and the minimum bid/floor prices.
  7. Public Auction Sale – refers to a mode of sale being made in behalf of the government in which personal or real properties are being sold to multiple buyers thru competitive bidding where the potential buyers are given equal chance to compete on the basis of their bid prices/offers which should be equal to or more than the set minimum bid/ floor price. The properties covered by the sale can either be properties already owned by the government as a consequence of forfeiture, or properties that are still owned by the delinquent taxpayers which are to be sold under the authority of a court of law or a government agency with similar authority.
  8. Negotiated or Private Sale – refers to the sale of acquired/ forfeited assets through negotiations with a potential buyer who is willing to pay the price of whichever is higher between the fair market value (FMV) as determined by the Commissioner based on the prevailing Department Order bearing the published Schedules of Zonal Values of Real Properties or the FMV as shown in the latest tax declaration issued by the provincial, city or municipal assessor. It is a mode of sale where the process of submission, evaluation, and consideration of offers is being undertaken until the best offer is made and accepted. Negotiated sale of real property is made after the conduct of two (2) failed public auctions, subject to prior approval of the Secretary of Finance pursuant to Section 216 of the Tax Code (NIRC) of 1997, as amended.
  9. Consolidation of Title – refers to the transfer of ownership of a property from the name of the taxpayer from whom the property was acquired/forfeited to the name of the Republic of the Philippines as the new owner of the same.
  10. Redemption Period – it is the one (1)-year grace period given to the taxpayer-owner of a certain real property subject of an auction sale proceeding within which to redeem the property from the date of sale of the date when the property was declared forfeited by the government.
  11. Consolidated Inventory of Seized and Forfeited Assets (CISFA) – refers to the consolidated list of all acquired real and personal assets of the Bureau where the one (1)-year redemption period, in case of real property, has already lapsed, including those real properties where the titles are not yet consolidated in the name of the government.
  12. Natural fruits of acquired/forfeited properties – refers to the income generated from acquired/forfeited assets that are considered spontaneous products of the soil without human labor intervention (e.g. common grass, herbs, etc.), as well as the young and other products of animals (chicks, chicken eggs, etc.).
  13. Industrial fruits of acquired/forfeited products – refers to those that are produced by lands of any kind through cultivation or labor (e.g. palay, sugar cane, corn, cultivated vegetables and fruit bearing trees, etc.)
  14. Civil fruits of acquired/forfeited properties – refers to the income earned from rents or leases of real and personal properties, amount of perpetual or life annuities, interests earned on bonds/securities, dividends from shares of stocks or other similar income.


[1] Section 215 of National Internal Revenue Code (NIRC) of 1987, as amended.

[2] Revenue Memorandum Order (RMO) No. 83-2010.

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