BIR examines tax audits

MANILA, Philippines - The Bureau of Internal Revenue (BIR) is set to investigate questionable tax audits uncovered after the Duterte administration suspended all field audit and investigation of taxpayers.

BIR Commissioner Ceasar Dulay said the agency is looking into cases of questionable tax audits which were uncovered in the process of implementing Revenue Memorandum No. 70-2016.

Dulay issued the memo last July 1 suspending all field audit and other field operations of the BIR relative to examinations and verification of taxpayers’ books of accounts, records, and other transactions.

The BIR chief also directed all examiners to submit an inventory of pending Letters of Authority or Letter Notices as of June 30.

According to Dulay, the agency is now investigating hundreds of tax examiners with long outstanding and unreported LOAs covering the audit of certain taxpayers for certain taxable years to ensure that audits are done according to existing laws and regulations.

The move, Dulay said, would protect taxpayers from questionable delays in the process and sanction erring tax examiners.

Dulay said the agency would resume its regular audit or investigation of tax cases to ensure that taxpayers are paying their correct taxes.

To ensure transparency and fairness, the BIR is set to use tools including risk-based analysis and benchmarking, to come out with an audit program that would prioritize the audit of certain taxpayers/sectors/industries perceived to be non-compliant.

Dulay issued Revenue Memorandum Circular No. 89-2016 last Aug. 23 directing all internal revenue officers to pursue the investigation or audit of Run After Tax Evaders (RATE) cases.

The circular lifted the suspension of the implementation of LOA pertaining to the RATE Program, paving the way for the resumption of field audits, field operations, any form of business visitations and all activities connected directly in the implementation of LOAs pertaining to RATE cases.