BECAUSE MOST OF coercion, extortion and unlawful/illegal tax settlements are done outside the offices of the Bureau of Internal Revenue, Commissioner Charlito Martin Mendoza ordered that no tax audits must be undertaken in restaurants, coffee shops and other public places.
Commissioner Mendoza prohibited tax examiners from such tax audits outside the revenue offices and enjoined the taxpayers not to entertain such audits and assessments of accounting records in restaurants, coffee shops, and other public venues.
Revenue Memorandum Order 1-2026 of Commissioner Mendoza mandated that the examination of books of accounts and financial records must be performed exclusively at revenue offices or the taxpayer’s registered place of business.
“[W]hile these informal venues may have been used in the past to facilitate discussions, they are no longer permissible under the updated guidelines.
The move is seen as part of a broader effort to standardize audit procedures and ensure that all official business is conducted in a controlled, professional environment.”
STANDARDIZED AUDIT
The directive aims to eliminate the informal practice of meeting in eateries and cafes, which some revenue officials noted had become a common occurrence due to the perceived convenience and relaxed atmosphere of such settings, the Manila Bulletin reported.
Mendoza said that while these informal venues may have been used in the past to facilitate discussions, they are no longer permissible under the updated guidelines.
The move is seen as part of a broader effort to standardize audit procedures and ensure that all official business is conducted in a controlled, professional environment.
Recognizing the logistical challenges posed by large-scale audits, Mendoza provided a degree of flexibility for cases involving voluminous records.
In instances where transporting physical documents to a BIR office would be impractical or excessively burdensome for the taxpayer, revenue officials have been directed to give the taxpayer the option to choose the audit venue, provided it remains within the taxpayer’s business premises.
The circular further streamlined the audit process by addressing the proliferation of administrative paperwork.
CONSOLIDATING LOAs
Taxpayers who have been issued multiple Letters of Authority, including electronic versions, are now permitted to request the consolidation of these documents into a single LOA. This change aligns with the bureau’s standing policy of issuing only one LOA per taxpayer per year, reducing the administrative weight on both the government and the private sector.
Beyond venue restrictions, the new regulations authorize the issuance of mission orders and Tax Verification Notices to enhance enforcement. In a significant structural shift, Mendoza also ordered the abolition of special task forces.
The functions previously handled by these specialized units have been returned to the BIR regional and district offices, a move intended to decentralize operations and empower local tax jurisdictions.