Revisiting the BIR LoA

AMICUS CURIAE JENNIFER ROSE O. TAPIA

- JENNIFER ROSE O. TAPIA

At a time where every peso in public funds is scrutinized, one piece of paper has recently received the ire of the public eye: the Bureau of Internal Revenue's (BIR) Letter of Authority (LoA).

While the LoA is viewed as a mere piece of paper, it must be remembered that this document emanates from the Bill of Rights enshrined in the 1987 Constitution, particularly the right of all persons to due process of law.

The LoA is the first document issued to commence the audit of a taxpayer. The LoA is the BIR's primary legal document that authorizes revenue officers to examine a taxpayer's books and records, and to issue an assessment of the correct amount of tax due.

To be valid, the LoA must contain a specific period. It must also contain the tax types subject to review, and the names of the revenue officers authorized to conduct the audit. Section 6 of the National Internal Revenue Code (Tax Code) provides that the LoA must be issued by the Commissioner of Internal Revenue or his duly authorized representative. Previously, a revenue officer had 120 days to examine the taxpayer's books. Today, Revenue Memorandum Order No. 82-2022 imposes a 180-day period from the issuance of the LoA for regular taxpayers, and 240 days for large taxpayers.

Section 6 should be read in conjunction with Section 228 of the Tax Code. Section 228 contains the procedure for protesting an assessment and lists the due process requirements to be afforded by the Commissioner or his duly authorized representative to each taxpayer.