POLICIES, GUIDELINES AND PROCEDURES ON THE SALE/DISPOSAL OF ACQUIRED/FORFEITED REAL PROPERTIES TRANSFERRED IN THE NAME OF THE REPUBLIC OF THE PHILIPPINES PURSUANT TO SECTION 216…

This Order is issued to:

1.         Prescribe
policies, guidelines and procedures on the sale of acquired / forfeited
real properties transferred in the name of the Republic of the Philippines;

2.         Enhance revenue collections through the sale of acquired/forfeited real properties;

3.         Ensure
a systematic and timely disposal of acquired / forfeited real
property/(ies) in accordance with existing rules and regulations to
avoid further deterioration of its value;

4.         Define
the accountability and responsibility of concerned offices and
officials /employees on the sale of acquired / forfeited real
properties.

II.
POLICIES:

In order to achieve the above objectives, the following policies shall be observed:

1.         All acquired/forfeited real properties transferred in the name of the Republic of the Philippines,
having passed the one year redemption period shall be converted into
cash within three (3) years from date of acquisition/forfeiture and/or
seizure.  Custodians of said properties are
required to submit to the Collection Service or its equivalent office
under Executive Order No. 114 inventory list of said properties;

2.         Sale
of acquired forfeited real properties shall be the responsibility of
Collection Service or its equivalent office under E.O. 114;

3.         The
actual conduct of auction sale of acquired properties obtained by the
government in payment/satisfaction of taxes, penalties or costs pursuant
to Section 216 of the Tax Code shall be implemented in every Revenue
Regional Office by the Regional Office Task Force (ROTF) composed of the
Regional Director; Assistant Regional Director; Chief, Collective
Division; Chief, Administrative Division; Chief, Legal Division; Chief,
Finance Division and Revenue District Officer where the property is
located. A National Office Task Force (NOTF) in the National Office (NO)
created under a Revenue Special Order shall supervise the
implementation of plans and programs relative to the sale of
BIR-forfeited assets;

4.         The Commissioner shall constitute an “Awards and Bids Committee (ABC)” in the National Office.  The
ABC in the National Office shall be headed by the Assistant
Commissioner, Collection Service or its equivalent office under E.O.
114.  The ROTF in the Regional Offices shall act
as ABC in their respective Regions and shall be headed by the Regional
Director unless delegated to the Asst. Regional Director;

5.         Sale
of acquired/forfeited properties shall be witnessed by a Commission on
Audit (COA) representative to ensure that the processes to be undertaken
are in accordance with existing rules and regulations;

6.         A Notice of Sale (Annex C)^[1] shall be accomplished in quadruplicate and signed by Head, NOTF / ROTF, to contain the following information:

a.      the floor price or minimum amount of bid;

b.      the venue and time when public auction shall be conducted;

c.       location and description of property to be sold;

d.      terms and manner of payment, whether in cash or manager’s check;

e.      a statement that “THE GOVERNMENT RESERVES THE RIGHT TO REJECT OR CANCEL ANY OR ALL BIDS.”;

7.         A Notice of Sale (NOS) shall be published once (1) a week for two (2) consecutive weeks in a newspaper of general circulation.  The
publication of the notice shall be made at least twenty (20) days prior
to the actual date of public auction sale pursuant to Section 216 of
NIRC of 1997, as amended.  Likewise, similar
notice shall be posted in conspicuous places/public places in the city,
municipality or Barangay where the property is located;

8.         Unless
the Commissioner provides otherwise, the Minimum Bid Price/Floor Price
shall be the fair market value of the real property as determined by the
Commissioner, or the fair market value (FMV) per latest Tax Declaration
of the Provincial, City, or Municipal Assessors, WHICHEVER IS HIGHER,
pursuant to Section 6(E) of the National Internal Revenue Code of 1997;

9.         Anyone
could bid except foreign nationals, corporations or otherwise, and
those disqualified under existing rules and regulations.  Employees of the Bureau of Internal Revenue are disqualified from participating in the bidding process;

10.       Public
auction sale of parcels of land shall be in a Sealed Public Bidding and
done parcel by parcel or title by title on a “AS IS WHERE IS BASIS”;

11.       Bidders
to pre-qualify shall be required to post a bid bond either in cash or
manager’s check at least one (1) working day prior to scheduled date of
public auction unless ABC allows otherwise.  The amount of bond shall be equivalent to ten percent (10%) of floor price/minimum bid price.  It shall form part of the payment, if the sale is awarded to the bidder, subject to Policy Nos. 15 and 16 hereof.  Bid
bond of the losing bidders, however, shall be returned to them after
Notice of Award has been released to the winning bidder, unless
otherwise allowed by ABC;

12.       Only bids equal to or higher than the floor price/minimum bid price shall be evaluated by the ABC;

13.       The
registered bidder who submits the highest bid shall, after proper
evaluation, be awarded the auctioned property. In case of tie-bids, a
new sealed bidding shall immediately be conducted among the tie-bidders
until such tie is broken;

14.       The
winning bidder shall pay the full amount of his bid, either in Cash or
Manager’s Check, to the CIR, thru the ACIR-Collection Service, BIR
National Office Building, for bidding conducted by the National Office,
or to the Regional Director, for bidding conducted in the Regional
Office, as the case may be, within two (2) days after being notified
that the awards made by ABC had been approved by the CIR, through the
Deputy Commissioners (ODCIR), Operations Group and Legal Group, or by
the Regional Director, as the case may be.  Check payments shall be for the account of the Bureau of Internal Revenue;

15.       Failure
or refusal of the winning bidder to pay the full amount of the bid
within the period aforestated shall render the award void and the
bidder’s cash bond shall be forfeited in favor of the government unless
the Commissioner allows an extension of time to the bidder within which
to fully pay the bid price;

16.       Any of the following shall constitute grounds for cancellation of awards and/or contract:

a.      fraudulent acquisition of the property;

b.      violation of the terms and conditions of awards;

c.       violation of the terms and conditions in the Certificate of Sale;

d.      violation of existing laws, rules, regulations, and ordinances;

e.      other instances analogous to the above-mentioned grounds.

17.       In
case of default by the winning bidder and the consequent cancellation of
the award, the second and the third highest bidder, in the following
order, may increase their bid to the amount equal to that of the highest
bid and whoever among them tenders a bid equivalent to the bid of the
highest bidder shall be awarded the auctioned real property in lieu of
the defaulting bidder.

The defaulting highest bidder shall be disqualified to further bid on the rest of the auctioned real property;

18.       Acquired
real property that has been repossessed through cancellation of award
or sale shall be redisposed in accordance with the same procedures in
this RMO;

19.       All
taxes and expenses relative to the transfer and issuance of certificate
of title and/or tax declaration shall be borne by the winning bidder
immediately upon signing and approval of the Certificate of Sale;

20.       All
awards made by the ABC (National Office/Regional Office) shall be
subject to the prior clearance by the CIR as reflected in the duly
signed “List of Properties Sold Through Public Auction For Issuance of
Certificate of Sale” (Annex K)^[2];

21.       The
winning bidder shall be responsible at his own expense for the
ejectment of squatters and/or occupants, if any, on the auctioned real
property;

22.       Unless
the Commissioner provides otherwise, for purposes of evaluation of the
bid offers, the Minimum Bid Price/Floor Price for the property shall be
the highest among the following:

i.        The latest fair market value as determined by the Commissioner of Internal Revenue;

ii.       The fair market value (FMV) shown in the latest tax declaration issued by the provincial, city or municipal assessor;

iii.      The
proportionate or corresponding amount of deficiency internal revenue
tax/es, including increments, which was given up by the government/or
considered satisfied or collected as a result of the forfeiture
proceedings, including the cost to maintain and cost of forfeiture; or

iv.      The purchase price offered/proposed by the former owner/s or any party by way of negotiated sale of the acquired real estate;

23.       There should at least be three bidders for every property to have a successful bidding process for the property;

24.       Negotiated
or private sale of real property shall be resorted to as a consequence
of failed public bidding for two (2) consecutive times subject to the
approval of the Secretary of Finance pursuant to Section 216 of the NIRC
of 1997;

25.       All
restrictions imposed by law, rules and agreements on the disposition of
agricultural land, pasture land, fish pond and other classification of
real property shall be observed and respected;

26.       All
awards of the region shall be reviewed by the NOTF and confirmed by the
CIR, thru the DCIR-OG, before the Notice of Award/Certificate of Sale be released to the taxpayer.  ROTF shall accomplish Annex “J”^[3] while NOTF shall accomplish Annex “K”^[4].

III
GUIDELINES AND PROCEDURES:

A.        Regional Office Task Force (ROTF)

1.         Transmit to NOTF “Inventory of Forfeited/Acquired Real Properties” (Annex A)^[5]
signed by the Regional Director of the region having custody over the
forfeited real properties registered in the name of the Republic of the
Philippines;

2.         Conduct
ocular inspection of the real property under its jurisdiction which are
to be disposed in order to obtain a first hand observation of the
status and condition of the property, its marketability or ability to
attract prospective buyers, as the need may arise;

3.         Secure
a location/vicinity map from the Assessor’s Office and prepare an
updated list of properties registered in the name of the Republic of the
Philippines with the following data:

a.      Name of Previous Registered Owner/Taxpayer;

b.      Title Number/Year of Issuance of OCT/TCT/CCT;

b.1.      Under the Name of the Republic of the Philippines

b. 2.     Under the Name of the Previous Owner

c.       Latest Tax Declaration Number/Year of Effectivity;

d.      Lot Number;

e.      Block Number;

f.        Location;

g.      Area;

h.       Property Classification;

i.        Current Fair Market Value as Determined by the BIR;

j.        Current Fair Market Value as Determined by the Assessor;

k.       Amount of Tax Satisfied/Paid.

4.         Determine the floor price of properties for auction sale;

5.         Coordinate
with COA, and ABC of the Region relative to sale/disposal of
acquired/forfeited real properties under its jurisdiction;

6.         Post
Notice of Sale at the entrance of the Provincial, City, Municipal
Buildings, Barangay Halls, Revenue District Office and other public and
conspicuous places where the property is located;

7.         Post Notice of Sale at the location of the property stating: “THIS PROPERTY IS FOR SALE.  INTERESTED PARTIES MAY CONTACT THE NEAREST BIR OFFICE”;

8.         Supervise the public auction sale of acquired assets located within its jurisdiction;

9.         Consolidate
reports on auction conducted by ABC and submit to NOTF within ten (10)
working days from the conduct of the auction sale;

10.       Prepare
and submit to the approving authority the necessary documents (i.e.,
the Certificate of Sale and other pertinent papers) to effect the
transfer of properties to the winning bidders.

B.        NOTF

1.         Determine
which property is to be sold/disposed based on inventory submitted by
the Regional Director or Assistant Commissioner that have custody over
said properties;

2.         Recommend
to the CIR the conduct of public sale at the National Office of
acquired/forfeited real properties not sold at the Regional Office;

3.         Request
for authority to publish/advertise the auction sale of all
acquired/forfeited properties nationwide (Annex B) and for the
allocation of necessary funds for the purpose;

4.         Prepare Notice of Sale
(Annex C) to be signed by the Assistant Commissioner, Collection
Service and attach to the request for authority to publish (Annex B) and
for the allocation of necessary funds;

5.         Cause
the publication of Notice of Sale of all acquired forfeited real
properties nationwide in leading newspaper of general circulation once a
week for two (2) consecutive weeks, and post in the website in
coordination with Tax Information and Education Division and the
Corporate Communication Division, respectively;

6.         Coordinate
with COA, Realty Appraisers and Brokers, tri-media and other external
agencies/entities before actual conduct of public auction to ensure that
bids and awards processes undertaken are in accordance with the
existing rules and regulations and that the participation of
stakeholders in the bidding process is maximized;

7.         Monitor the sale of acquired/forfeited properties by the ROTF;

8.         Provide administrative support to the ABC;

9.         Coordinate
and submit semi-monthly progress report on the sale of
acquired/forfeited real properties to the CIR, DCIR for Operations
Group, and DCIR for Resource Management Group.

C.        Awards And Bids Committee (Abc) At The National Office And Regional Office

1.         Receive from prospective bidders Application for Bid (Annex D)^[6];

2.         Register
in the Bid Registry (Annex E)^[7] all prospective bidders upon
submission of duly signed Bidders Acknowledgement and Undertakings
(Annex F) and upon presentation of the Official Receipt (OR)
representing the 10% prequalification bond posted, taxpayer’s Community
Tax Certificate (CTC) and Tax Identification Number (TIN);

3.         Provide bidder with guidelines on the Public Auction Sale (Annex G);

4.         Make arrangements for the bid conferences and opening of bids;

5.         Receive and open sealed bids submitted by bidders in the presence of a COA representative as witness;

6.         Accomplish
Abstract of Canvass (Annex H)^[8] and submit the same to the CIR, thru
DCIR-Operations Group, or to the Regional Director, as the case may be,
within 10 working days from date of sale;

7.         Deliberate and resolve issues of tie-bids and/or cancelled bids;

8.         Announce and issue to winning bidder Notice of Award after the sale has been confirmed by the CIR;

9.         Recommend final approval of award to the winning bidder;

10.       Issue Certificate of Sale
as approved by the Commissioner of Internal Revenue or the Regional
Director, as the case may be, to winning bidder upon confirmation of
full payment of bid price by the Collection Service or Collection
Division, respectively, and after confirmation of the sale by the CIR;

11.       Notify
defaulting bidder of cancellation of bids and forfeiture of posted bond
with concomitant notification of the 2nd and 3rd highest bidder that
they may increase their bids to the amount equivalent to that of the
highest bid;

12.       Prepare
and submit report on the conduct of public bidding within ten (10)
working days to the Head, NOTF or 2 working days to Head ROTF, from date
of public auction sale.

D.        Commissioner
of Internal Revenue (for Activities in the National Office)/Regional
Director (for Activities in the Regional Office):

1.         Constitute
members of the committee to conduct actual inspection of
forfeited/acquired real properties for sale/disposal, if the need
arises;

2.         Constitute members of the ABC to conduct actual bidding;

3.         Sign Notice of Award to the winning bidder;

4.         Approve Certificate of Sale;

5.         Sign cancellation of awards on the grounds stated in policies 15 and 16 of this RMO;

6.         Recommend negotiated or private sale after two (2) failed auction sales.

E.        Revenue District Officer (RDO):

1.         Act
as custodian of the forfeited property within its jurisdiction until
such time that they are transferred to the winning bidder;

2.         Prepare and submit to ROTF inventory of forfeited real and personal properties under its custody;

3.         Transmit dockets of forfeited real properties to the Chief, Collection Division;

4.         Sign
formal request for employing the services of a duly licensed private
geodetic engineer or surveyor and/or a geodetic engineer/surveyor
provided by the Bureau of Lands or Land Registration Authority who shall
survey properties that are unregistered, the evidence of ownership of
which is only a tax declaration or even titled but cannot be identified
or located;

F.         Collection Division

1.         Maintain an updated inventory and records of seized properties within the region;

2.         Prepare
and submit to ROTF/NOTF Inventory of Forfeited/Acquired Real Properties
titled/registered in the Name of the Republic of the Philippines (RP)
(Annex H) under its custody;

3.         Receive and consolidate the following reports for submission to ACIR, Collection Service and CIR:

a.         Inventory of forfeited/acquired properties for sale and disposal;

b.         List of properties sold/disposed and

c.         Ending inventory of properties.

4.         Verify full payment of bid price by the winning bidder.

G.        Administrative Division

1.         Serve as repository of dockets and records of acquired/forfeited properties transferred in the name of RP;

2.         Act as custodian of titles, tax declarations, other official records and pertinent documents of forfeited real properties;

3.         Keep records of the conduct of the sale, copies of awarded titles and other related documents on the sale.

H.        Finance Division (For Activities In The Regional Office)/General Services Division (For Activities In The National Office)

1.         Receive and issue corresponding OR for pre-qualification bonds (cash/manager’s check) deposited by prospective bidders;

2.         Safekeep bond deposits of prospective buyers until winning bidders is announced;

3.         Return to non-winning bidders their bonds deposit;

4.         Receive payment of winning bidder and issue the corresponding official receipt;

5.         Remit
to Bureau of Treasury (BTr) through Authorized Government Depository
Banks (AGDB) deposit and payment of winning bidder, and forfeited
deposits of defaulting bidder;

6.         Prepare
necessary reports to NOTF or ROTF and other offices, i.e., Revenue
Accounting Division, Collection Service, Collection Division, DCIR-OG,
and CIR.

I.          Revenue Accounting Division:

1.         Prepares
Journal Entry Voucher (JEV) to record the sale/disposal of
acquired/forfeited properties using the entries prescribed by the
Commission on Audit based on the reports and other documents submitted
by the Collection Enforcement Division and the Finance Division of
regional offices;

2.         Sends JEV and supporting documents to COA for post audit.

J.         Corporate Communication Division (Ccd)/Taxpayer Information & Education Division (TIED):

1.         Arrange
for the advertisement/publication of Notice of Sale in coordination
with Collection Service, Financial and Administrative Service (FAS) and
other offices concerned;

2.         Coordinate the tri-medial exposure on the sale of forfeited/acquired real properties;

3.         Post the Notice of Sale in the BIR website.

K.        Collection Service

1.         Monitor the management, safekeeping and disposal of acquired/forfeited real properties.

2.         Prepare
and submit to the Deputy Commissioner, Operations Group, a Consolidated
Inventory List of forfeited/acquired properties submitted by custodians
of the said properties;

3.         Monitor collection from the sale of acquired/forfeited real properties;

4.         Review and initial reports relative to acquired/forfeited real properties, including documents on the sale of said properties;

5.         Prepare report to the Department of Finance (DOF) and COA relative to the sale of acquired/forfeited properties.

L.         Financial And Administrative Service:

1.         Process request for authority to publish NOS;

2.         Allocate necessary funds for publication/advertisement and conduct of the sale of forfeited/acquired real properties;

M.        Deputy Commissioner, Operations Group

1.         Reviews and initials the letter of recommendation and other documents approving the sale of acquired/forfeited real properties;

2.         Initial on documents/reports on the sale of forfeited/acquired real properties for submission to COA and DOF.

N.        Deputy Commissioner-Legal And Inspection Group

1.         Reviews and initials the letter of recommendation and other documents approving the sale of acquired/forfeited properties.

IV.

Repealing Clause

All Revenue Memorandum Orders and Circulars inconsistent herewith are hereby amended/modified accordingly.

V

Effectivity

This Order shall take effect immediately.

Adopted: 29 Nov. 2002

(SGD.) GUILLERMO L. PARAYNO, JR.
Commissioner of Internal Revenue