July 24, 1990 REVENUE MEMORANDUM ORDER NO.

35-90 Subject : To : Prescribing Additional Guidelines in the Issuance and Enforcement of Subpoena Duces Tecum All Internal Revenue fficers and thers concerned

I. Backgr u!"# Revenue Audit !emorandum rder "o# $%&' dated (ul) '*+ ,-&' outlines the audit procedure to be follo.ed in documenting non%cooperation of a ta/pa)er in respect to the production or presentation of his boo0s of accounts and other accounting records for inspection+ preparator) to the transfer of the case to the 1egal Service for issuance of a subpoena and2or enforcement thereof b) legal action# 3o.ever+ RA! "o# $%&' fails to la) the guidelines for the actions to be ta0en subse4uent to such transfer# II. O$%&c'()&# This rder see0s to define the se4uential actions to be underta0en in the enforcement of the visitorial po.er vested upon this 5ureau .ith respect to the boo0s of accounts and other accounting records of a ta/pa)er as .ell as the po.er of the 6ommissioner of Internal Revenue to implement the provisions of Section 7 of the "ational Internal Revenue 6ode+ as amended# III. * r+# To achieve uniformit) in the subpoenas hereinafter to be issued+ there is hereb) adopted a revised form to be 0no.n as 5IR 8orm "o# ,-,9 and captioned :S;5P E"A D;6ES TE6;!:+ IV. ,u("&l(!&- a!" .r c&"ur&-

A# Transfer of 6ase to 1egal Service: After compliance .ith the audit procedures outlined in paragraph '+ subparagraphs '#, to '#* of RA! "o# $%&'+ the revenue official concerned shall transfer the records of the case to the Prosecution Division or 1egal 5ranch+ as the case ma) be+ under an appropriate covering communication recommending the issuance of a subpoena+ clearl) setting forth the follo.ing information: ,< The name=s< and address=es< of the individual=s< .ho has2have control or custod) over the boo0s of accounts and other accounting records to be e/amined> '< A particular but concise description of such boo0s+ records to be e/amined> $< The ta/able )ear involved# 5# Processing of Recommendations for Issuance of Subpoena: The Prosecution Division or 1egal 5ranch concerned shall evaluate the recommendation for issuance of subpoena .ithin t.o ='< .or0ing da)s from receipt and ma) ta0e the follo.ing alternative actions: ,< Return the case to its origin for further documentation or action>

'< Prepare the corresponding subpoena in three copies for initial and2or signature of the officials concerned+ the distribution of .hich shall be as follo.s: riginal Duplicate Triplicate % % % to be served to the ta/pa)er attached to the doc0et of the case under audit action la.)er file

6# Signatories: 8or control and monitoring purposes+ onl) the follo.ing revenue officials are hereb) authori?ed to issue subpoenas+ to .it: ,< "ational a# '< ffice

Assistant 6ommissioner+ 1egal Service ffice

Regional a# b#

Director+ or in his absence+ the Assistant Director

This does not ho.ever preclude the 6ommissioner and Deput) 6ommissioners to e/ercise their authorit) under the "ational Internal Revenue 6ode to issue subpoena in appropriate cases# D# Service

1/ By 01 + 2&r)&" # Ideall)+ the service of the subpoena should be effected b) the revenue officers assigned to investigate the case# 3o.ever+ such service ma) be made b) an) internal revenue officer authori?ed for the purpose# 2/ 3 4 2&r)(c& May B& E55&c'&"

a# The subpoena shall be served b) handing the original cop) thereof to the individual named therein in person+ or+ if he refuses to receive it+ b) tendering it to him .itnessed b) another revenue officer accompan)ing the server# b# If personal service cannot be made+ service ma) be effected b):

,< 1eaving a cop) of the subpoena at the ta/pa)er@s d.elling place or residence .ith some person of suitable age and discretion then residing therein> or '< 1eaving the cop) at ta/pa)er@s office or regular place of business .ith some competent person in charge thereof# $< In both situations+ the leaving of the cop) of the Subpoena .ith a competent person and or person of sufficient discretion should be .itnessed b) another revenue officer accompan)ing the server# 3/ 6r 5 5 2&r)(c&# Aside from accomplishing the bottom portion of the subpoena+ the server shall ma0e a .ritten report setting forth the manner+ place and date of service+ the name of the person .ho received the same and such other relevant information# In case of 7ON28RU78IVE 2ERVI7E+ the personal relationship and2or official capacit)+ if an)+ of the person receiving should be indicated# A# Remedies to Enforce 6ompliance : Bhere the ta/pa)er fails+ refuses or neglects to compl) .ith the commands of the subpoena+ he ma) be proceeded against b): A# 8iling a criminal case for violation of Section 7+ in relation to Sections ,7 and '*9 of the Ta/ 6ode+ as amended> and2or 5# Initiating proceedings for indirect contempt under Section $=f<+ Rule 7, of the Revised Rules of Court. AI# Repealing 6lause: All other orders or parts thereof+ .hich are inconsistent here.ith are hereb) repealed or revo0ed accordingl)# AII# Effectivit): This order shall ta0e effect immediatel)# "G

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6ommissioner of Internal Revenue