BIR audit of small category taxpayers

To improve voluntary compliance from individual and non-individual taxpayers classified as small category taxpayers, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) Nos. 32-2018 and 34-2018 mandating the audit or investigation of taxpayers who have gross sales or receipts for taxable year 2017 amounting to as follows: Below are the relevant guidelines for the audit: -One electronic letter of authority (eLA) will be issued for each taxable year. The eLA must include the examination of all the taxpayer’s internal revenue tax liabilities, except when a specific tax type had been previously examined (e.g., value-added tax audit).

-The audit will be conducted without a field investigation. Revenue officers (ROs) must submit the investigation report to the Review and Evaluation Section in the Assessment Division within 90 days from the issuance of the eLA.

-Together with the notice for the presentation/ submission of documents/records with checklist of requirements, the eLA will be personally delivered by a BIR employee or delivered through a courier company to the taxpayer. The taxpayer has 10 days to submit the required documents/records. Failure to submit within the 10-day period will result in an issuance of a reminder letter, giving an additional five days to comply. Failure to submit within the five-day period will result in the issuance of a subpoena duces tecum. No further extension to submit documents will be allowed.

RMO Nos. 32-2018 and 34-2018 take effect immediately.