Tax Alert No. 3 [Revenue Memorandum Circular No. 142-2019 dated 12 December 2019]

Circularizing the eDST System’s Balance Adjustment as an Option for Recovery of Erroneously Deducted DST

The Commissioner of Internal Revenue has issued Revenue Memorandum Circular (RMC) No. 142-2019 dated 12 December 2019, to provide all concerned taxpayers-users of the Electronic Documentary Stamp Tax (eDST) System another option to recover erroneously deducted DST from their respective ledger balances in the eDST System arising either from:

1. erroneously encoded information by the taxpayer-user; or
2. multiple affixture/printing of stamps due to taxpayer-user’s error or a system error.

Aside from filing a claim for refund, a request for adjustment in the taxpayer’s ledger balance in the eDST System may be filed, provided that the following conditions are met:

1. The revised BIR Form No. 2000 filed with the BIR is properly accomplished, particularly Part II.A. and Schedule I thereof; and
2. The erroneously deducted DST from the taxpayer’s ledger account in the eDST System has not been declared in Schedule I of the return.

Furthermore, the following guidelines and procedures shall strictly be observed by all taxpayers and revenue personnel:

1. The taxpayer-user shall file a written request for adjustment to the Chief, Miscellaneous Operations Monitoring Division (MOMD), Collection Service in the National Office of the BIR, together with the following:
   • All the relevant documentary proofs on the incident(s) (i.e., including the taxable document where the eDST was affixed); and
   • A sworn declaration stating the amount of DST requested for balance adjustment has not been applied to other taxable documents/transactions nor was it claimed as a deductible expense from the taxable income in the taxpayer’s income tax return.
2. The MOMD shall conduct a preliminary evaluation of the taxpayer’s request to determine whether the basis of the request arose from (a) erroneously encoded information by the taxpayer-user; or (b) multiple affixture/printing of stamps due to taxpayer-user’s error or a system error.
3. The taxpayer-user shall be notified, in writing or thru email, on the approval or denial of its request for balance adjustment within five (5) working days from receipt of the written recommendation and supporting documents of the concerned Revenue District Office or Large Taxpayers Service Division.

If approved, the Chief, MOMD shall briefly indicate the reasons for adjustment in the box provided for the “Balance Adjustment Details” functionality of the eDST System.

If denied, the reason(s) for the denial of the taxpayer’s request shall be clearly stated in the notice to the taxpayer. Should it be determined that a request for refund should have been filed instead by the taxpayer-user, the same should be categorically stated in the notice of denial.

In case the taxpayer’s request does not arise from a system error and there is a need for further verification at the taxpayer's side, the same shall be communicated to the taxpayer.

You may access the full version of the RMC through the BIR website.