BIR suspends tax audits

The Bureau of Internal Revenue (BIR) on Monday announced it had recalled mission orders issued to taxpayers under investigation, noting that tax audits failed to improve revenue collections.

In a statement on Monday, the bureau also said it had ordered all revenue officers of its National Investigation Division (NID) to submit an inventory of all outstanding mission orders, including those already cancelled or terminated.

Further investigations, field audits and inspections under recalled mission orders are either suspended or terminated unless otherwise authorized in writing, the BIR said.

In a separate order, the BIR also directed the NID and its revenue officers to submit a status report on all letters of authority (LOA), including revalidated and non-revalidated letters, and all letters issued after June 30, 2016.

The bureau said the recall was part of its aim to improve tax audit guidelines, policies and procedures, including reporting requirements governing tax audits and investigations.

“I feel personally that the LOA were supposed to contribute to our collection efforts, but I don’t see much improvement,” BIR Commissioner Caesar Dulay told reporters.

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

“There’s a certain limit for LOA –180 days. That is six months, then you come out with your report and you should assess if you feel that [the taxpayer has a]deficiency tax,” Dulay explained.

In the event the 180-day limit is exceeded, the revenue officer handling the investigation must provide the commissioner a status report.

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