Rest in Peace?!

After we've taken up the article on estate taxes, we now come to an object that should concern many and is certain to generate a lot of controversy in the years to come. The BIR issued a memorandum with the ironic name “Project Rest in Peace.” It's ironic; read along and you'll know why.

Revenue Memorandum Order 10-2010 was issued by the BIR after it was dissatisfied with the estate tax returns filed from 2007 to 2009. Some Php2.3816 billion was collected in estate tax. The BIR was dissatisfied with difference between the deaths recorded in the NSO between those years and the estate taxes collected within the same period. Revenue Memorandum Order 10-2010 was therefore issued to increase the number estate tax returns filed and raise Php10 billion in estate taxes. They call it “Project Rest in Peace” but the activities of the BIR under this order are far from comforting.

Policies

1.) All RDOs are required to establish linkages with and/or access records of the following:

a.) Civil registers

b.) Memorial parks

c.) Hospitals

d.) Cemeteries

e.) Funeral parlors

f.) Crematoria  

g.) Obituaries

h.) Clerks of court

i.) Life insurance companies and other financial institutions

2.) In accessing records, the following information will be required and sent to the Audit Information, Tax Exemption and Incentives Division (AITEID) for processing:

a.) Name, civil status and address of the decedent

b.) Date of death

c.) Names and addresses of relatives/contact persons

3.) The RDO shall then send a notification letter within 5 days from obtaining the info in #2 to the relative/contact person named in the information as well as the residence of the deceased. All other info on decedents who aren't under the jurisdiction of the local RDO will be sent to the AITEID, which will then transmit the information to the pertinent RDO. The notification letter shall inform the administrator/executor/relative/contact person of the decedent on the information, requirements and due dates for filing the returns and paying the estate taxes.

4.) If the relative/contact person/administrator or executor fails to file and pay the tax on the due date, the RDO will take the actions necessary to protect the BIR's interest. These shall include (but will not be limited to) the following:

a.) Background investigation to determine the estate's properties

b.) Issuance of a letter of authority to investigate

c.) Issuance of subpoena duces tecum to compel the submission of information

d.) Notice to entities holding the decedent's properties, ordering them not to dissipate or withdraw the properties without BIR approval

e.) Other activities deemed warranted

High Potential Cases

Each week, the National Investigation Division (NID) will prepare a list of names from obituaries in newspapers of general circulation. It will determine who among the decedents in the list have substantial properties and potential for substantial estate tax payments! The list will be sent to the AITEID, which, within 5 days from receipt of the list, will transmit it to the pertinent RDO.

So if a loved one has died and the BIR comes knocking on your door only a few days later, who will be the one resting in peace? Such a name for a BIR issuance adds insult to injury; its real message is: Thou shalt not grieve (until thou hast paid the estate tax!)