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BIR sets new deadlines and amendments for their Audit Program
26 February 2024
The Bureau of Internal Revenue (BIR) has released several amendments to its Audit Program – highlighting new report deadlines and updated tax procedure guidelines.
The Bureau of Internal Revenue (BIR) has released several amendments to its Audit Program – highlighting new report deadlines and updated tax procedure guidelines.
The BIR issued Revenue Memorandum Order (RMO) 1-2024 on January 10, 2024, to update its Audit Program. It implements various changes to deadlines, procedures, policies, and guidelines to the BIR’s Audit Program. It also aims to highlight the new methods of resolving currently pending audit cases of large taxpayers being classified/listed.
This amends RMO 6-2023, with the objective of improving the capabilities of the Internal Revenue Integrated System (IRSIS) and increase the BIR’s operational efficiency using automation.
Important Amendments to the BIR Audit Program
The BIR highlights three significant amendments within the order, these are:
- Item III.A.1 – Taxpayers who “consistently” failed to pay/remit
This amended section now includes taxpayers as one of the Mandatory Cases to be covered by electronic Letter of Authority (eLA) and will be subject to audit/investigation if they consistently (for at least three (3) times during any given period) failed to pay/remit their taxes due reflected in their tax returns through the BIR’s Electronic Filing and Payment System (eFPS) or who later filed amended tax returns reflecting a decrease/no tax due. - Item IV.C.6 – Deadlines for Report of Investigation of cases covered by eLA
This updated portion prescribes a new period for submitting a report of investigation of cases covered by eLA (not including replacement eLA). The new time and date are as follows.
Case by Classification | Number of Days |
| Cases covered by eLAs other than replacement eLA | 180 days for regional cases/240 days for Large Taxpayers (LT) cases/120 days for Office Audit Section (OAS)/90 days for Large Tax VAT Audit (LTVAU) and VAT Audit Section (VATAS) from the date of the eLA |
- It should be noted that the counting of number of days for completing audits specified in the RMO shall be suspended when the investigating Revenue Officer (RO) requested for the issuance of Subpoena Duces Tecum (SDT) or Exchange of Information (EOI) to be issued. The reckoning date for the suspension of the audit period begins on the day the concerned office receives the information request and shall be lifted when the reply has been forwarded to the requesting Revenue Officer. The order then explains that the appropriate locations for requests are as follows:
| Concerned BIR Office | |
| Requests for issuance of SDT | Legal Division/Office of the Assistant Commissioner - Large Taxpayers Service |
| Requests for exchange of information provision for taxes covered by tax treaty | Exchange of Information Unit of the International Tax Affairs Division |
- In order to prevent the issuance of jeopardy assessments and to ensure that the Bureau is not deprived of its right to assess and collect the right amount of tax, the concerned office must strictly follow the procedures in the issuance of SDT within two (2) working days from the receipt of request as prescribed under item no, III.3.5 of RMO No. 10-2013 as amended by RMO No. 8-2014 in order to compel taxpayers to submit or present the required books, records and documents.
- Item IV.G.2.b – Taxpayer business registration transfer to other Revenue District Office
In accordance with the amendments of RMO No. 6-2023, the updated guidelines for this section are now as follows:“In case the taxpayer has transferred its business registration to another Revenue District Office (RDO), or the taxpayer has been enlisted/delisted as a large taxpayer, the continuation of audit cases which has already started prior to transfer or its 2 enlistment/delisting as a large taxpayer, shall be conducted by the old handling BIR Office.
In the same manner, all protests against deficiency tax assessment notices [e.g., Preliminary Assessment Notice (PAN), Formal Letter of Demand/Final Assessment Notice (FLD/FAN), and Final Decision on Disputed Assessment (FDDA)] issued against transferred or newly enlisted/delisted large taxpayers, shall be handled by the old concerned BIR Office that issued such notice until settlement/termination of the case.
Unprotested tax assessments that matured into "delinquent accounts" shall be referred to the new concerned BIR Office where the taxpayer is registered. Any collection therefrom shall be credited to the Office that conducted/concluded the audit upon notification to the Large Taxpayers Service (LTS) or Regional Office, as the case may be, for proper crediting by the Revenue Accounting Division. Thereafter, all eLAs/TVNs regardless of the taxable year shall be issued by the new BIR Office having jurisdiction over the taxpayer's registration."
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Keeping up to date with the constant changes and amendments to tax laws can become quite tedious to manage. At Mazars, we work closely with clients – offering solutions that simplify their compliance and help them navigate complex tax situations with confidence.
Our professionals have deep experience in multiple areas of tax, providing businesses at all stages of their life cycle with specialist advice. Our expertise ranges from corporate and employment tax, to transfer pricing and corporate structuring, to national and international transactions, to assessing tax implications when setting up new operations overseas, among others.
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