BIR resumes tax audits

THE BUREAU of Internal Revenue (BIR) is resuming the issuance of letters of authority (LoA) and mission orders after a two-month suspension triggered by complaints these were being misused and weaponized.

“We are lifting the suspension of issuing letters of authority, mission order and field audits with reforms in place,” Finance Secretary Frederick D. Go said at a briefing on Tuesday.

BIR Commissioner Charlito Martin R. Mendoza said the suspension of all field audits and related operations since Nov. 24 had allowed the agency to review audit procedures, consult stakeholders, and implement reforms.

“That review has now been completed. We are lifting the suspension because key reforms are in place,” Mr. Mendoza said at the same briefing.

The LoA is a document from the BIR that allows an examiner to inspect taxpayer accounts. It is required before any tax audit can proceed.

The Marcos administration had issued 82,228 LoAs from January until Nov. 3 in 2025, BIR data showed. This was nearly double the volume in 2022.

Mr. Go said the comprehensive review led to concrete reforms to make tax audits fairer, more predictable, and more accountable.

“These changes align with the administration’s big, bold reforms to improve the ease of doing business and strengthen trust in government,” he said. “As audits resume, we urge taxpayers and the public to actively participate in implementing these reforms.”

The BIR is set to issue a memorandum circular formalizing the end of the suspension, backed by the Technical Working Group on Assessment Integrity and Audit Reform’s tweaked rules and process.

As tax audits resume, Mr. Mendoza said businesses should no longer fear these documents will be weaponized, as additional safeguards are in place to protect taxpayers.

“With all the new reforms that will be in place now with the lifting of the audit suspension, we are confident that the conduct of audits will now be more transparent and controlled and with clearer oversight,” he said.

These reforms include adopting a single-instance audit framework. This generally limits each taxpayer to one LoA per taxable year and the consolidation of multiple audit authorities into a single LoA.

In addition, the BIR chief said the agency will shut down operations of the value-added tax audit service and VAT audit units, as well as disband existing audit task forces.

“Audit authority will now be limited to the regional offices and the large taxpayers’ service,” Mr. Mendoza said.

He also said taxpayers will be able to verify the authenticity of their LoAs through the BIR website using the REVIE chatbot.

Mr. Mendoza said taxpayers will now have reasonable options regarding the manner and venue of record examinations, particularly when documents are voluminous and transporting them would be impractical, burdensome, or disruptive.

“We have strengthened documentation, verification, and oversight, and are launching an Audit Auditor Program to ensure revenue officer accountability,” he said.

At the same time, Mr. Mendoza said that the actual collection from the LoA accounts for 2-3% of the agency’s overall intake, while the rest comes from voluntary compliance.

Mr. Go earlier noted that the BIR could not indefinitely suspend the use of LoAs, making it crucial to meet its revised P3.431-trillion revenue target for 2026.

The BIR collected P3.11 trillion in 2025, falling short of its full-year target of P3.22 trillion. — Aubrey Rose A. Inosante