BIR ends confusion on issuance of audit notices
BIR ends confusion on issuance of audit notices by Rochier T. Yao
The Bureau of Internal Revenue (BIR) has lifted the
suspension of issuance of electronic letters of authority (eLAs) which paved
the way for the adoption of electronic system of generating and issuing letters
of authority to taxpayers.
Under RMO 69-2010, the BIR has resumed issuance of eLA
starting on August 16, 2010.
It may be recalled that prior to RMO 69-2010, the BIR issued
Revenue Memorandum Circular (RMC) No. 56-2010 which discontinued the use of
manual LAs for 2009 beginning July 1, 2010. Under RMC 56-2010, all manual LAs
issued starting March 1, 2010 shall be replaced with electronic Letters of
On account of this issuance, an RO who arrives at a
taxpayer’s premises armed with a manual LA will be rejected by a taxpayer on
the ground that the said LA is no longer valid and has no force and effect
rendering the RO’s attempt at examining the taxpayer’s books illegal.
To add confusion in the mix, on July 12, 2010, this directive
was temporarily suspended by RMC 61-2010. During the suspension, taxpayers with
manually–issued LA cannot invoke his right to refuse the investigation of the
examiners. It further indicated that during the suspension of the applicability
of eLAs, only the Commissioner of Internal Revenue can manually issue and sign
LAs starting July 1, 2010.
Now, to finally put confusion to a rest, Commissioner Kim
Henares issued Revenue Memorandum Order (RMO) No. 69-2010 on August 16, 2010
which lifted the suspension on the application of eLAs.
Accordingly, all LAs, whether manual or electronic,
issued from March 01, 2010 covering cases for 2009 and other taxable years,
including LAs issued by the BIR Commissioner pursuant to RMC 61-2010, shall be
replaced with the new eLA printed using BIR Form 1966.
This does not cover the verification of estate tax cases
which shall continue be authorized with a Tax Verification Notice (TVN) until
December 31, 2010.
If there will be an assignment or reassignment of the
case to another RO or investigating office, the taxpayer should expect to
receive a serially-numbered Memoranda of Assigment (MOA) to authorize the
The BIR provided additional guidelines for the issuance
of MOAs for the following cases:
- reassignment for the continuation
of the audit/investigation of a case another Revenue Officer (RO) due to
resignation/retirement/transfer of the original RO;
to the original RO of returned cases by the reviewing office and reassignment
to another RO of returned cases in case of resignation/retirement transfer of
the original RO;
to another RO due to referral of the case to another investigating office;
protested cases/cases for reinvestigation.
All Tax TVNs/MOAs/Referral Memos issued from March 1,
2010 shall be retrieved and converted to the appropriate documents to be issued
by the BIR. But then again, taxpayer
should not be confused or should not be apprehensive in case the ROs continue
to conduct the audit under the old audit notice.
The regulations specify that though the
replacement will bear the current date but will have the same effectivity date
as the cancelled original audit notice.
Furthermore, all investigations and proceedings under the authority of
the old notice will continue to be valid and binding. Issuance of the new notices will not mean a
return to first base for the audit.
The due dates for the submission of the report of
investigation shall likewise be reckoned from the date of the original
document. Hence the replace will not
open a window for further extension of the examination period.
The replacements may take some time – although no
timeline was set. Hence, taxpayers
should just patiently wait until the transition is completed.