Audit suspension: A festive break for taxpayers

Christmas came early for many taxpayers this year through Revenue Memorandum Circular (RMC) No. 107-2025.

- JOSELLE MARIANO

While it’s not unusual for the BIR to stop its audit and field operations during the Christmas season, this year’s announcement came as a surprise. On Nov. 24, the BIR issued an order suspending all audit and other field operations until further notice, to be lifted only by the Commissioner of Internal Revenue.It’s no secret that in recent years, many taxpayers have struggled to keep their heads above water. The BIR has taken the aggressive approach to assessments, often issuing Letters of Authority (LoAs) one after another, even before the prior year’s assessment was completed. For those who’ve experienced this cycle, the issuance of RMC No. 107-2025 offers the perfect time to pause, breathe, and bring prior and current filings into full compliance, and prepare for a fresh start in 2026.

A TIME FOR REFLECTION AND CORRECTION

Taxpayers seasoned in BIR audits are familiar with what we often call the “usual BIR findings.” These typically include, but are not limited to, issues such as failure to withhold and/or remit withholding taxes, undeclaration of income/sales, unsubstantiated expenses, and compromise penalties. Any of these can easily trigger an assessment from the BIR.

Fortunately, this suspension of audit provides taxpayers a valuable opportunity to address mistakes or oversight in their records. Let's explore what taxpayers can do to correct or improve their practices and ensure accuracy of filing.

+ Check for discrepancies

In most assessments, the BIR would compare the taxpayer records, such as the Audited Financial Statements (AFS), Income Tax Return (ITR), and VAT Declaration. Discrepancies among these documents often lead to deficiency taxes. This kind of finding is common and can easily be addressed with explanations and supporting documents.