How to Settle the Bureau of Internal Revenue (BIR) Open Case Successfully

If you are in business for 2-3 years, most probably, you may have received a BIR letter informing you of your failure to file the BIR tax returns required for your type of business. That BIR letter is often referred to as Open Cases.

Open cases are system-created cases when a taxpayer fails to file a return for a given taxable period required for filing, either monthly, quarterly or annually.

Taxpayers’ Obligations

Whether you like it or not, you have to register your business to the BIR to formalize and legalize your operations.

Otherwise, you will incur penalties or BIR will file a case against you for the unlawful pursuit of trade in violation of Section 258 of the National Internal Revenue Code, in relation to Section 236 of the same law.

Once you are a registered taxpayer, the bureau will give you a copy of the Certificate of Registration (COR). The COR enumerates the tax types and frequency of filing and paying of the tax returns.

The BIR expects all taxpayers to comply with their tax obligations. Taxpayers are required to file the tax return and pay the corresponding tax due on time. They also have to file the tax return within the deadline, even if they have zero tax due.

Failure to file the return and pay the corresponding tax due on time will create an Open Case in the BIR’s Integrated Tax System (ITS) under Revenue Regulation 7-2012.

Causes of BIR Open Cases

The ITS will automatically generate open cases when a taxpayer or its authorized representative fails to file the required tax returns on time.

The system will also generate an open case when there is a system error wherein the taxpayer or its authorized representative filed the tax returns, but the documents did not reach the data warehouse.

Settlement of BIR Open Case

­­­The only way to close the open cases are to file the tax returns and pay the tax due and other charges online.

1. File the applicable tax return online and pay the corresponding tax due, including penalties and surcharge per RMO 7-2015;
2. For system error, send a reply letter to BIR stating that you have filed the tax return and attach a photocopy of the document;
3. Request for a Certificate of No Open Case and pay the Certification Fee of P100 plus Documentary Stamp of P30.

Importance of Certificate of No Open Case

The Certificate of No Open Case is your last line of defense when BIR tags you for open cases. Often, the burden of proof to show that you file your tax return lies on you.

Finding your duly acknowledged tax return for the taxable period of years ago is stressful. And when you cannot find the documents, the BIR certificate comes in handy.

Moreover, when you have an authorized person filing and paying your BIR taxes, the Certificate of No Open Case is a proof that all your taxes are filed and paid and accordingly received by the bureau.

File your Tax Return Promptly

Taxpayers are mandated to file the applicable tax returns on time. They must also pay the corresponding tax due if any. Thus, you need to be tax-compliant to avoid unnecessary and excessive surcharges and penalties.

When you miss filing your tax return, the system automatically creates an open case. In case this happens, you must file the applicable tax return and pay the tax due and penalties to close the case.

Give utmost importance to your tax compliance and have peace of mind knowing that you have fulfilled your duty as a citizen.

Do you need assistance in closing your BIR cases? We, at DJKA Business Services Inc. offer professional services on tax compliance for your business. For inquiries and consultation, kindly email us at info@djkaaccounting.com.