A look at BIR open cases
Aside from the penalty, it is important to monitor for and close any discovered open cases because the BIR will not issue a tax clearance when the taxpayer still has open cases under his/her/its name under the BIR system
Published in Daily Tribune on March 31, 2022
by: Vanessa Arrha A De Leon
You’ve been minding your own business, focusing on your own transactions, and then one day you go to the Bureau of Internal Revenue (BIR) to secure a tax clearance you need for a transaction when, lo and behold, you are stopped in your tracks by a BIR officer informing you that you cannot secure the said tax clearance because you have “stop-filer cases” under your name in their system.
For employees who have no other source of income, the term “stop filer cases” may not ring a bell, considering that their employers file their returns for them under the substituted filing system.
For people and corporations engaged in business, however, “open cases” may be a familiar occurrence and one source of headache, considering that they can accumulate without any reprieve, until you actually apply to “close” them in the BIR system.
What are BIR stop-filer cases, or “open cases” as these cases are more commonly known? Under Revenue Memorandum Order 041-11, an open case refers to a case created by the Returns Compliance System of the BIR in a situation where a registered taxpayer has been identified by the BIR’s system to have failed to file the required tax return within the prescribed due date.
When a person registers with the BIR for the first time, he chooses a taxpayer type depending on where he gets his source of income. It is such tax type which determines the specific tax returns a taxpayer is required to file once he/she/it is registered with the BIR. For example, as discussed above, a taxpayer who gets his income solely from his local employment would be required to file a different kind of return vis-a-vis a mixed income earner who gets his income from his employment and another source of income (most likely a business he runs on the side). Failure on the taxpayer’s part to file the said returns will result in the creation of an open case under his name in the BIR system.
How does one close an open case? It starts with securing a list of the open cases from the BIR to determine what returns under the system the taxpayer allegedly failed to file. Upon identification of the said returns, the taxpayer should proceed to check his records and check whether indeed he failed to file the said returns. If he was able to file the same, he should prepare a copy of such returns which must have a receiving/filing annotation from the BIR that the said return was indeed filed, and proceed to submit them to the BIR. The BIR will proceed to close an open case in the system once it verifies that the returns for the said open cases had indeed been filed.
Where the taxpayer discovers that he has indeed not filed the said returns, the taxpayer must, in order to close the open cases, prepare a return corresponding to the one which was not filed and proceed to pay the corresponding penalty provided under the applicable BIR rules and regulations.
Note that the minimum amount of compromise penalty to be imposed for failure to make/file/submit any return or supply correct information at the time or times required by law or regulation is P1,000, the amount to be increased depending on the gross sales, earnings or receipts to be declared in the subject returns. Hence, if a taxpayer is not aware of the returns he/she/it is required to file under the law, the open cases can accumulate and so will the penalty due in order to close the same.
Aside from the penalty, it is important to monitor for and close any discovered “open cases” because the BIR will not issue a tax clearance when the taxpayer still has open cases under his/her/its name under the BIR system.
