BIR suspends all tax audits

The government has stopped anew all tax investigations and audits after the Bureau of Internal Revenues (BIR) revoked all the mission orders issued by one of its division.

The BIR issued a statement announcing it has recalled all mission orders (MOs) issued by the National Investigation Division (NID).

“The Bureau aims to improve current audit guidelines, policies, and procedures, including reporting requirements governing tax audits/investigations within the context of a responsive system of tax collection/ enforcement measures,” the BIR said.

The government’s top revenue generating agency also directed the division’s revenue officers to submit an inventory of all outstanding MO, including those already cancelled or terminated.

It added the order also suspends or terminates any further investigation, field audit, or any form of business visitation pursuant to the said MO unless otherwise authorized in writing.

In a separate order, the BIR also directed the NID and its revenue officers to submit a status report of all Letters of Authority (LOAs), including those Revalidated/Non-Revalidated LOA pursuant to Revenue Memorandum Order (RMO) No. 57-2016, and all LOAs issued after June 30, 2016.

The NID formulates policies, work programs, standards, guidelines and procedures relative to investigation of tax fraud cases and the conduct of intelligence work.

It also conducts preliminary investigation of confidential information filed by an informant with the BIR and also makes arrests and seizures in relation to the violation of any penal law, rule or regulation administered by the agency.

The BIR issues a LOA to inform a taxpayer that he or she is being investigated for possible tax violations.

Upon assuming the top post at the BIR in July 2016, Cesar Dulay issued Revenue Memorandum Circular 702016 suspending all pending tax investigations and audits would be stopped after receiving information that probes conducted under LOA are being abused and could last for “two to three years.”

The suspension was lifted in the same year and paved the way for higher collection towards the end of 2016.

However, Dulay is not convinced the LOAs are contributing to higher collections thus leading to the issuance of the suspension order anew.