TO CURB THE DISCRETIONARY powers of tax auditors and ensure that such audits are more consistent and transparent, the Bureau of Internal Revenue has tightened the rules on tax audits, particularly on data to select who gets audited.
Revenue Memorandum Order No. 22 issued on Aug. 24 consolidates BIR’s previous audit programs into a single policy covering investigating offices nationwide.
A key reform limits the BIR to one electronic Letter of Authority (eLOA) per taxpayer for a given taxable year, covering only specified tax types and periods.
“This new BIR Audit Program strengthens both sides of the process — fairness for taxpayers and accountability within the BIR,” said Commissioner Charlito Mendoza in a statement.
“Audits must follow clear rules and proper procedures, and our revenue officers must be able to support the assessments they issue with facts and law,” he said.
The BIR will also use system-assisted, risk-based data modeling to identify taxpayers for examination, reducing the role of individual discretion in deciding who gets audited, Bilyonaryo reported.
Taxpayer identities will be anonymized during the selection and assignment process where feasible, as safeguard against discretionary targeting.
Revenue officers will also face greater scrutiny under a technical review called the “Revalida,” or “Audit of Auditors,” which will assess whether their findings are supported by law and evidence and comply with due process.
Officers who miss prescribed deadlines, conduct unauthorized examinations or misclassify cases could face administrative sanctions under civil service and tax rules.