What to expect after lifting of audit suspension

On Jan. 27, the Bureau of Internal Revenue (BIR) officially announced the lifting of its audit freeze, signaling the resumption of full audit and enforcement activities with the issuance of Revenue Memorandum Order No. 001-2026.

- PAMELA ANGELICA D. SAYCO

As Valentine’s Day approaches, most people are looking forward to receiving love letters with chocolates and roses. In the world of tax, taxpayers should prepare their hearts, as the BIR may soon begin sending their version of “love letters” in the form of electronic Letters of Authority (eLAs), assessment notices, advisories, and audit-related communications.

SINGLE-INSTANCE AUDIT FRAMEWORK

A key change accompanying the resumption of BIR audits is the single-instance audit framework. Under this policy, a taxpayer is subject to only one eLA per taxable year, covering all applicable internal revenue tax types, including Value-Added Tax (VAT).

However, a separate audit or verification authority may be issued for cases that are transactional, event-based, or terminal in nature.

REQUEST FOR NON-CONSOLIDATION OF VAT AUDIT CASES

Despite the single-instance audit framework, a taxpayer with multiple pending eLAs within the same taxable year may file a written request for non-consolidation with the RDO/OAS/LT Audit Divisions handling the eLA that covers all internal revenue tax types, except VAT. The request must indicate: (a) the name of the investigating office (e.g., VATAS/LTVAU); (b) the eLA serial number/audit case number; (c) the date of issuance; and (d) the tax type and taxable period covered by the eLA.