BIR One-Time Tax Abatement for Micro Taxpayers

The Bureau of Internal Revenue (BIR) established the One-Time Tax Abatement Program under Revenue Regulations (RR) No. 4-2026, as clarified by Revenue Memorandum Circular (RMC) No. 84-2026 and implemented through Revenue Memorandum Order (RMO) No. 19-2026.

Qualified micro taxpayers can apply to cancel covered tax liabilities, delinquent accounts, open stop-filer cases, and assessment notices existing as of December 31, 2025, upon payment of a fixed ₱5,000 fee per taxable year.

This guide covers who qualifies, which cases are covered, the ₱80,000 limit, required documents, application steps, and the legal effects of abatement.

1. Who qualifies for the One-Time Tax Abatement Program?

To qualify, a taxpayer must meet both conditions:

1. Gross sales threshold: Annual gross sales or receipts for the covered taxable year must be below ₱3,000,000.
2. Timing of obligations: The tax case or liability must arise from an obligation whose statutory due date fell on or before December 31, 2025.

Mixed-income earners and businesses that have closed

• Mixed-income earners: If you receive both employment compensation and business or professional income, only your gross business or professional income counts toward the ₱3 million ceiling. Compensation income is excluded.
• Ceased business operations: Taxpayers who have stopped operating or informally closed their businesses may still qualify if they have open stop-filer cases or unpaid tax liabilities.

How to verify micro taxpayer status

The BIR determines micro taxpayer status using registration records in the Internal Revenue Integrated System - Taxpayer Registration System (IRIS-TRS) as of December 31, 2025.

You can verify your status through the BIR Online Registration and Update System (ORUS) or at your local Revenue District Office (RDO).

2. Which tax cases are covered?

The program covers the following cases existing as of December 31, 2025:

• Delinquent accounts: Unpaid tax liabilities due on or before December 31, 2025.
• Deficiency tax assessments: Preliminary Assessment Notices (PAN), Final Assessment Notices (FAN), Final Letters of Demand (FLD), or Final Decisions on Disputed Assessments (FDDA), whether unprotested or under administrative protest.
• Open stop-filer cases: Unfiled tax returns for prior periods, including open cases for businesses that ceased operations without formally cancelling their BIR registration.
• Pending administrative protests and compromise applications: Disputed cases pending before BIR offices and pending applications for compromise settlement or penalty abatement under earlier rules, including RR 13-2001 or RR 30-2002.
• Accounts payable or due to BIR: Unpaid tax liabilities recorded in the taxpayer’s books of account.
• Cases with only penalties due: Cases with no basic tax owed but outstanding compromise penalties.
• Court-disputed cases: Collection cases or tax cases pending before the Department of Justice (DOJ) or courts, including the Court of Tax Appeals, provided no final executory judgment has been rendered.
• One-time transactions (ONETT): Capital Gains Tax, Donor’s Tax, or other ONETT liabilities, provided the party legally liable for the tax is classified as a micro taxpayer.
• Withholding tax liabilities: Unpaid withholding tax obligations of micro taxpayers.

Which cases are excluded?

The program does not cover:

• Tax fraud and RATE cases: Criminal violations filed in court or fraud cases under the BIR’s Run After Tax Evaders (RATE) program, unless the Commissioner of Internal Revenue or a duly authorized representative specifically approves them in writing on meritorious grounds.
• Post-2025 obligations: Obligations with statutory due dates after December 31, 2025. For example, Calendar Year 2025 Annual Income Tax Returns due in April 2026 are excluded.
• Prior tax payments: Payments made on covered cases on or before December 31, 2025, are non-refundable and cannot be applied toward the ₱5,000 abatement fee.

3. How the ₱80,000 threshold works

Under RR No. 4-2026 and RMC No. 84-2026, the program has a ₱80,000 limit per taxable year.

1. Combined limit: The total unpaid basic tax and compromise penalties, across all covered cases and tax types for the taxable year, must not exceed ₱80,000.
2. Interest and surcharges: These are excluded from the ₱80,000 calculation. Once the underlying basic tax or compromise penalty is approved for abatement, all incidental surcharges and interest are automatically abated and cancelled.
3. Separate applications for separate years: The ₱80,000 threshold applies to each taxable year separately. If you have liabilities across multiple years, you must file a separate application and pay ₱5,000 for each taxable year.
4. All covered liabilities must be declared: Include every unpaid deficiency tax and liability for the covered taxable year. Omitting any covered unpaid liability for that year is a ground for denial.

4. How payments made on or before December 31, 2025, are treated

For cases with partial payments made on or before December 31, 2025, RMC No. 84-2026 specifies the following:

1. Order of application: Payments are applied first to interest, surcharges, and compromise penalties. Any amount remaining is then applied against the basic tax.
2. Qualification test: If the remaining unpaid basic tax after those payments is ₱80,000 or less, the taxpayer qualifies for the program.
3. Non-refundability: Payments made on or before December 31, 2025, cannot be refunded, used as tax credits, or credited toward the ₱5,000 abatement fee.

5. Documents required for the application

Applications must be submitted manually in triplicate (3 copies) to the RDO where the taxpayer is registered.

Individual micro taxpayers

1. BIR Form No. 2121: Three duly accomplished copies of the application form.
2. Government-issued ID: A photocopy of a valid ID showing the taxpayer’s name, address, and birthdate.
3. Special Power of Attorney (SPA): A duly notarized SPA and the representative’s valid ID, if filing through an authorized representative.
4. Certificate of Existence of Outstanding Tax Liability/ies (CEOTL): Issued by the BIR office with jurisdiction over the case.
5. Assessment notices: A copy of the PAN, FAN, FLD, or FDDA with assessment details, if applicable.
6. Letter of withdrawal: A copy of the duly received withdrawal letter for any pending compromise or abatement application under prior rules, if applicable.

Non-individual micro taxpayers (corporations, partnerships, and OPCs)

1. BIR Form No. 2121: Three duly accomplished copies of the application form.
2. Authorization documents: A duly notarized Board Resolution, Written Resolution (for a One Person Corporation), or Secretary’s Certificate.
3. Government-issued IDs: Photocopies of valid IDs of the Corporate Secretary or OPC sole stockholder and the authorized representative.
4. CEOTL: An official Certificate of Existence of Outstanding Tax Liability/ies.
5. Assessment notices and withdrawal letters: Copies of assessment notices or duly received letters of withdrawal for prior pending applications, if applicable.

6. How to apply and pay the abatement fee

The application process has five steps. File the application within the program period and follow the separate deadlines for payment and proof of payment.

Step 1: Secure the CEOTL

Request a Certificate of Existence of Outstanding Tax Liability/ies (CEOTL) from the BIR office handling your case:

• RDO: For open stop-filer cases.
• Regional Collection Division: For delinquent accounts.
• Assessment/Legal Divisions: For assessment or litigation cases.

The issuing office issues the CEOTL within two (2) working days of the request.

Step 2: File BIR Form No. 2121

Submit three copies of BIR Form No. 2121, together with the required attachments, to your RDO of registration. Taxpayers with multiple branches must file at their Head Office RDO.

In Part II, list all tax types and basic amounts due, excluding interest. Select the applicable Alphanumeric Tax Code (ATC):

• MC350: Individual taxpayers.
• MC351: Corporate taxpayers.

Failure to specify the tax types or basic amounts due results in denial of the application.

Step 3: Pay the ₱5,000 abatement fee

Pay ₱5,000 per taxable year within five (5) working days from filing the application, using BIR Form No. 0605.

Complete the payment details as follows:

Payment can be made electronically or through Authorized Agent Banks (AABs).

If your application is denied or withdrawn, the ₱5,000 fee is credited as a partial payment toward the outstanding liability.

Step 4: Submit proof of payment

Submit proof of payment to your RDO within five (5) working days from the date of payment.

Failure to submit proof within that period voids the application. You may, however, file another application within the program’s availment period.

Step 5: Receive the Certificate of Availment

After receiving proof of payment, the RDO issues the Certificate of Availment within five (5) working days. The certificate is official proof of case approval and closure.

7. Legal and operational effects of the program

The program also addresses collection enforcement, tax investigations, open stop-filer cases, and business registration cancellation.

• Suspension of collection enforcement: Collection actions, including Warrants of Distraint and/or Levy, Warrants of Garnishment, or Notices of Tax Lien, are suspended for the covered taxable year once a complete application is filed. The suspension remains in effect while the application is under evaluation.
• Issuance of ATCA and lifting orders: The Certificate of Availment serves as the basis for preparing the Authority to Cancel Assessment (ATCA). Based on the approved ATCA, the BIR issues formal Lifting Orders for outstanding collection warrants and notices, or amends them if the liabilities are only partially covered.
• No field audit triggered: The BIR evaluates the application using only submitted documents and its internal records. Filing an application does not initiate a field audit or new tax investigation.
• Unfiled returns for zero basic tax cases: For qualifying open stop-filer cases with no unpaid basic tax due, taxpayers do not need to file the missing returns to receive the Certificate of Availment and case closure.
• Business registration cancellation: The Certificate of Availment may be submitted as supporting documentation when applying to cancel business registration under RMC No. 47-2026.

8. Program deadlines

The program remains open until December 31, 2026, based on the application filing date.

Frequently asked questions

Can I apply if my business has stopped operating?

Yes. Taxpayers who have ceased operations or informally closed their businesses may qualify if they still have open stop-filer cases or unpaid tax liabilities and meet the program’s other requirements.

Does the application trigger a BIR field audit?

No. The BIR evaluates applications using submitted documents and internal records. Filing does not initiate a field audit or new tax investigation.

Do I need to file missing returns for a stop-filer case with no basic tax due?

No. For an open stop-filer case with no unpaid basic tax due, filing the missing tax returns is not required to receive the Certificate of Availment and case closure.