#AskTheTaxWhiz: Filing an amended tax return
I attended a tax seminar last month where I learned that we can file our tax returns without having to declare correct amounts and that we can just amend it later with no interest and penalty. Is that correct?
No. Under Revenue Memorandum Circular (RMC) No. 54-2018, amendments of tax returns that result in additional tax due is subject to 25% surcharge, interest, and compromise penalty.
Caution must be observed when attending seminars or reading blogs about tax rules and regulations as you may interpret it wrongly which may result in higher penalties.
I hired a tax lawyer and he assured me that he knows the revenue district officer (RDO) so I don't need to worry. He said the RDO can lower the compromise penalty or even remove it. Is that possible?
Per RMC No. 54-2018, compromise penalties cannot be imposed. If you don't want to pay, you don't have to. However, that would open you up to a criminal charge, which will result in a fine of not less than P10,000 and imprisonment of not less than one but not more than 10 years.
Be careful with hiring professional consultants who will leverage their personal contacts in the Bureau of Internal Revenue (BIR).
As the saying goes, prevention is better than cure. It doesn't matter who the RDO is, or if your consultant has personal connections in the BIR. Simply by filing and paying your taxes correctly and on time, you can already save millions of pesos in unnecessary penalties and compromises.
It's best to invest in hiring good and honest accountants, and to do tax planning early on to end recurring problems with the BIR.
The Asian Consulting Group's Citizen Tax Planning restores your peace of mind so you can focus on growing your business. It promotes a "tax-free" lifestyle – a lifestyle not necessarily free from taxes, but free from the burdens of unnecessary penalties and compromises.
With the right tax plan, you can earn more without the threat of being audited or harassed by BIR examiners.
Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2017 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founding president of the Asian Consulting Group (ACG) as well as the Center for Strategic Reforms of the Philippines (CSR Philippines). You may email him at firstname.lastname@example.org or visit www.acg.ph for tax-related concerns.