On January 31, 2018, Finance Secretary Carlos G. Dominguez issued RR No. 7-2018 which restored the provision on Notice of Informal Conference as a due process requirement in the issuance of a deficiency tax assessment. RR No. 72018 was published in the Manila Bulletin on February 1, 2018 and took effect on February 16, 2018.
The Notice of Informal Conference is a written statement issued by the BIR informing the taxpayer of the discrepancies in the taxpayer's tax payments for the purpose of conducting an informal conference wherein the taxpayer will be given an opportunity to present his side of the case.
The requirement for the Bureau of Internal Revenue ("BIR") to send taxpayers a Notice of Informal Conference has existed since RR No. 12-19851 which provided for the procedure on administrative protests on assessments of the BIR. This requirement was retained when RR No. 12-19992 was issued on September 6, 1999 to implement the 1997 Tax Code provisions on assessment of taxes, penalties, and interest.
Prior to its amendment by RR No. 18-2013, RR No. 12- 1999 required the BIR to issue the Notice of Informal Conference to the taxpayer if the latter disagrees with the BIR's findings based on its investigation. RR No. 12-1999 also provided that failure of the taxpayer to respond within fifteen (15) days from date of receipt of the Notice for Informal Conference, shall result in the taxpayer's default in which case, the report will be endorsed for appropriate review and issuance of a deficiency tax assessment, if warranted.
However, on November 28, 2013, former Finance Secretary Cesar V. Purisima issued RR No. 18-2013 and amended RR No. 12-1999 to delete the requirement of Notice of Informal Conference.
RR No. 7-2018 has now restored the requirement of issuance of the Notice of Informal Conference as a due process requirement in the issuance of a deficiency tax assessment.3 However, unlike the old provision of RR No. 12-1999 which did not expressly provide for the period within which the informal conference may extend, RR No. 7-2018 now provides that the informal conference shall not extend beyond thirty (30) days from the taxpayer's receipt of the Notice for Informal Conference. Further, if the taxpayer is found to be still liable for deficiency taxes after presenting his side or if the taxpayer is not amenable, the case will be endorsed to the Assessment Division of the Revenue Regional Office or to the Commissioner or his duly authorized representative within seven (7) days from conclusion of the informal conference for issuance of a deficiency tax assessment. Finally, failure of the revenue officers to comply with the periods shall subject them to penalties as provided under existing rules and regulations.