A welcome relief: BIR suspends audit and field audit operations

“We have seen a significant rise in the Bureau of Internal Revenue’s (BIR) revenue collection targets over the years, as the government’s budget requirements continue to grow.

- MARYANNE PATRICIA P. UNO

While these targets are primarily achieved through voluntary tax compliance, a sizeable chunk of this can also be attributed to payment of deficiency taxes arising from enforcement actions or assessments.

The tax assessment process commences from the taxpayer's receipt of a Letter of Authority (LoA), which authorizes revenue officers to examine the books of account and other records of a taxpayer. This is likely familiar to most taxpayers— whether large or small. While taxpayers typically receive one LoA in a year, there are some cases where multiple LoAs for different taxable years arrive within the same calendar year, forcing businesses to juggle year-end compliance alongside ongoing audits.

Tax assessments have recently been in the spotlight, amidst several issues raised by legislators on the use of government funds. Due to taxpayer complaints about excessive and irregular LoAs, a proposed resolution was filed in the Senate urging the chamber “to investigate the allegations of misuse of LoAs by the BIR as a moneymaking scheme.” These practices have also raised concerns among taxpayers about the frequency of LoAs and inconsistencies in tax audit handling, which allegedly include varying interpretations of the tax rules by different revenue officers.

In response to the concerns raised and amid the looming Senate probe, the BIR’s newly appointed Commissioner of Internal Revenue (CIR) issued Revenue Memorandum Circular (RMC) No. 107-2025 on Nov. 24, suspending all audit and other field operations effective immediately.

The suspension applies to all BIR operating offices and covers the issuance of LoAs, Mission Orders (MOs), examination and verification of taxpayer records, and related transactions. It also includes revalidation, extension, replacement, or supplementary LoAs and MOs—except in cases falling under specified exceptions.