BIR Compromise Penalty for Revenue/Internal Revenue Stamp Violations
Internal revenue stamp violations under NIRC Section 265 span five distinct acts — but RMO No. 7-2015 only allows two of them to be compromised, and treats the other three as fraud, excluded from compromise entirely. The two that can be settled by compromise carry ₱20,000 and ₱50,000 amounts, both paired with forfeiture; the remaining three go straight to criminal referral under NIRC Section 204’s fraud exclusion.
This is a companion to BIR Compromise Penalties for Unlawful Possession of Untaxed Excise Articles, covering the parallel excise-goods violations that internal revenue stamps are meant to verify were properly tax-paid.
Keep Your Excise Documentation in Order FREE →Which Section 265 stamp violations can actually be compromised? #
Only two of the five acts NIRC Section 265 covers carry a stated compromise amount in RMO No. 7-2015’s Annex A — the other three are barred from compromise because they’re treated as fraud.
| Violation | Legal basis | Compromise |
|---|---|---|
| Making, importing, selling, using, or possessing without express Commissioner authority any dye for printing/making stamps, labels, tags, or playing cards | Sec. 265(1) | ₱20,000, including forfeiture of unlawful articles; subsequent violations not compromisable |
| Erasing cancellation marks or altering written figures/letters/marks on internal revenue stamps | Sec. 265(2) | Not qualified for compromise — involves fraud (Sec. 204, NIRC) |
| Possession of false, counterfeit, restored, or altered stamps, labels, or tags, or causing another to commit the offense | Sec. 265(3) | Not qualified for compromise — involves fraud (Sec. 204, NIRC) |
| Selling or offering for sale articles bearing false, spurious, or counterfeit stamps or labels | Sec. 265(4) | Not qualified for compromise — involves fraud (Sec. 204, NIRC) |
| Giving away, accepting from another, selling, buying, or using containers where the stamps aren’t completely destroyed | Sec. 265(5) | ₱50,000, including forfeiture of unlawful articles; subsequent violations not compromisable |
Why are three of the five variants excluded from compromise? #
RMO No. 7-2015 doesn’t invent this fraud exclusion — it’s a consequence of NIRC Section 204’s general rule that violations involving fraud can’t be compromised at all, regardless of what schedule a particular act might otherwise fall under. Erasing or altering a stamp’s cancellation marks, possessing counterfeit stamps, and selling goods under false or counterfeit stamps all involve deliberately defeating the government’s excise-tax verification system — a materially different act from, say, simply lacking a required poster or missing a filing deadline, which is why the schedule routes these straight to criminal referral instead of offering a negotiated settlement.
What’s the uniform criminal penalty across all five variants? #
Regardless of whether a specific variant can be compromised, the underlying criminal exposure is the same across all five: a fine of not less than ₱20,000 but not more than ₱50,000, and imprisonment of not less than 4 years but not more than 8 years. The compromise availability is what differs — the two compromisable variants let a taxpayer settle the criminal-exposure track for a fixed peso amount plus forfeiture; the three fraud-barred variants don’t offer that option at all.
Frequently asked questions #
Can every internal revenue stamp violation be compromised? #
No. Of the five distinct violations NIRC Section 265 covers, only two carry a stated compromise amount under RMO No. 7-2015 — making, importing, selling, using, or possessing unauthorized stamp-printing dies (₱20,000 plus forfeiture) and giving away, accepting, buying, or using containers with incompletely destroyed stamps (₱50,000 plus forfeiture). The other three are excluded from compromise entirely because they involve fraud.
What stamp violations are not eligible for compromise at all? #
Erasing or altering the cancellation marks on previously used stamps, possessing false or counterfeit stamps, and selling or offering for sale articles bearing false or counterfeit stamps are all excluded from compromise under RMO No. 7-2015, since Section 204 of the NIRC bars compromise for violations involving fraud.
What is the criminal penalty for internal revenue stamp offenses? #
A fine of not less than ₱20,000 but not more than ₱50,000, and imprisonment of not less than 4 years but not more than 8 years, applies uniformly across all five variants of the Section 265 offense — the compromise availability differs by variant, but the underlying criminal exposure doesn’t.
Does this apply to postage stamps or only tax-related stamps? #
Internal revenue stamps here means the specific stamps, labels, or tags the BIR uses to mark tax-paid excise goods and other accountable forms — not postal stamps. This provision is closely related to the excise-article violations covered separately, since stamps are one of the ways the BIR verifies excise tax was actually paid on a given product.
Does forfeiture still apply even where compromise is barred? #
The schedule states forfeiture explicitly for the two compromisable variants; for the three fraud-barred variants, the case proceeds through criminal referral rather than a negotiated compromise-plus-forfeiture settlement, since Section 204 removes the compromise route for fraud entirely.
Summary #
Internal revenue stamp offenses split cleanly into two categories under RMO No. 7-2015: unauthorized stamp-making and incompletely-destroyed-stamp containers, which can be compromised at ₱20,000 and ₱50,000 respectively plus forfeiture, and outright counterfeiting, altering, or selling under false stamps, which Section 204’s fraud exclusion routes straight to criminal referral instead. The dividing line is whether the act defeats the stamp system’s core verification purpose — which is exactly the line NIRC Section 204 draws between ordinary non-compliance and fraud.