For Internal revenue tax purposes, the pertinent portions of Revenue Memorandum Order No. 1-90, relevant to the collection of taxes abroad are quoted below:

"I
Objectives

This Order is issued:

A. To update the Schedule of Compromise Penalties with a view to increase the compromise penalties and delete from the coverage thereof certain acts commonly resorted to by taxpayers as a means of tax evasion;

B. To reflect the changes in the Schedule which includes the Code Section, Nature of Violation, Criminal Penalty imposed and Amount of Compromise Penalty which are prescribed on Chapter II, Title X of the revised National Internal Revenue Code;

C. To adopt and implement a uniform application of the various compromise penalties for criminal violations of the Tax Code; and

D. To provide supplemental guidelines on compromise penalties for resident taxfilers and non-residents as well."

"II
Policies

Certain acts/violations which are commonly resorted to and applicable to non-resident taxpayers are imposed the same amount of compromise penalty as the resident taxpayers."

"III
Guidelines and Instructions

1. The internal revenue officers concerned shall apply the œRevised Schedule of Compromise Penalties [given below] to ensure uniformity of action.

2. In no case shall the compromise penalty differ in amount from those specified in the Schedule, except when duly approved by the Commissioner or, in a proper case, by the Regional Directors.

3. Although all amounts of compromise penalties incident to violations shall be itemized in the assessment notice and/or demand letter along with the other administrative penalties like surcharge and interest, the same should not form part of the total amount assessed/demanded but should appear separately as a suggestion to the taxpayer to pay lieu of criminal prosecution. If paid, the compromise penalties shall be collected and accounted for under the usual procedures, as internal revenue.

4. Since compromise penalties are only amounts suggested in settlement of criminal liability, and may not therefore be imposed or exacted on the taxpayer in the event that a taxpayer refuses to pay the suggested compromise penalty, the violation shall be referred for criminal action as heretofore mentioned.

5. Non-resident filers who commit any of the violations stated in the schedule shall pay the equivalent amount of compromise penalty in pesos or its equivalent in U.S. dollars."

(Note: In the implementation of No. 5, above, reference should be made to Revenue Memorandum Circular No. 77-89, dated December 19, 1989, prescribing a uniform exchange rate of U.S. Dollar for the collection of taxes abroad. The said Circular has earlier been circularized.)

"IV
Repealing Clause

All other orders which are inconsistent herewith are hereby repealed or revoked accordingly."

"V
Effectivity

This Order shall take effect immediately."

All revenue officers and other officials charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and urged to give the same the widest publicity possible.

Adopted: 1 Feb. 1990

(Sgd.) JOSE U. ONG
Commissioner of Internal Revenue

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REVISED SCHEDULE OF COMPROMISE PENALTIES

Code Sec.	Nature of Violation		Amount of Compromise Penalty
253	Willful attempt to evade or defeat any tax imposed by the National Internal Revenue Code or the payment thereof.		This violation cannot be compromised because it involves fraud Sec. 204 NIRC.*
Code Sec.	Nature of Violation		Amount of Compromise Penalty
254	a) Willful failure to pay any internal revenue tax at the time required by law or regulation.		There is no specific amount of compromise penalty prescribed but the same may be compromised at the discretion of the Commissioner on a case-to-case bases.*
	b) Failure to pay any internal revenue tax at the time required by law or regulation.		b) If the amount of tax unpaid
	Exceeds But Does Not Exceed Compro- mise is       P xxx P 500 P 200 500 1,000 400 1,000 2,000 700 2,000 5,000 1,000 5,000 7,500 1,500 7,500 10,000 2,000 10,000 15,000 3,000 15,000 2,000 4,000 20,000 30,000 6,000 30,000 60,000 8,500 50,000 100,000 12,000 100,000 500,000 16,000 500,000 1,000,000 20,000 1,000,000 x x x 25,000
	c) Willful failure to make/file any return, keep records, or supply information at the time required by law or regulations.		There is no specific amount of compromise penalty prescribed, but the same may be compromised at the discretion of the Commissioner on a case to cases basis.*
	d) Failure to make / file any return or supply information at the time required by laws or regulations		If gross annual sales, earnings, or receipts; or gross estate or gift
	Exceeds But Does Not Exceed Compro- mise is       P xxx P 10,000 P 200 10,000 20,000 400 20,000 30,000 600 30,000 50,000 1,000 50,000 75,000 1,500 75,000 100,000 2,000 100,000 300,000 3,000 300,000 500,000 5,000 5,000,000 10,000,000 15,000 10,000,000 25,000,000 20,000 25,000,000 x x x 25,000
	e) Misrepresentation as to actual filing of return or statement or withdrawal of return or statement already filed.		This violation cannot be compromised because it involves fraud. (Sec. 204, NIRC)*
274	Violation of any provision of the National Internal Revenue Code or any regulation of the Department of Finance for which no specific penalty is provided by law.		P 1,000
Code Sec.	Nature of Violation		Amount of Compromise Penalty
277	Procuring the unlawful divulgence of any confidential information regarding the business, income, or inheritance of any taxpayer; unlawfully publishing or printing the income, profits, losses, or expenditures appearing in any income tax return.		This violation should not be compromised because it is against public policy to allow divulgence of confidential information, unless this is validly authorized under existing law.

* NOTE: These violations should be the subject of a formal written report on a case to case basis, addressed to:

The Commissioner
Bureau of Internal Revenue
Quezon City, Philippines
Attention: Chief, International Tax Affairs Division