RMC No. 107-2025 — Suspension of all Audit and Other Field Operations of the Bureau of Internal Revenue Until Lifted by the Commissioner of Internal Revenue

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Bringing in Revenues for Nation-Building 2 4 NOV 2025 PILIPINAS BAGOng

REVENUE MEMORANDUM CIRCULAR (RMC) NO.3 0 7 - 2 0 2 5

SUBJECT Suspension of all Audit and Other Field Operations of the Bureau

Revenue of Internal Revenue Until Lifted by the Commissioner of Internal

TO All Internal Revenue Officials, Employees, and Others Concerned

I. RATIONALE AND LEGAL BASIS

that promotes compliance and fosters trust among taxpayers. irregular, untimely, or intrusive audits and to strengthen internal discipline by limiting discretionary field operations, thereby ensuring a fair, transparent, and efficient tax system The Bureau of Internal Revenue (BIR) is mandated to protect taxpayers from

The Letter of Authority (LOA) is the BIR's primary legal document that authorizes revenue officers to examine a taxpayer's books and records. It grants the Commissioner the authority to conduct audits based on a clear legal foundation, with proper identification of the examiner and adherence to due process. Complementing this is the Mission Order (MO) an administrative instrument for authorizing surveillance, verification, site inspections, and other limited fact-finding activities. Unlike an LOA, an MO does not authorize audits, examination of books of account, or the issuance of assessments.

Given the importance of the audit system, its regulatory framework must be implemented with care and integrity. This authority clearly depends on the Commissioner's statutory powers under the National Internal Revenue Code (NIRC) of 1997, as amended. Section 4 grants the Commissioner exclusive authority to interpret tax laws and oversee enforcement; Sections 5 and 6(A) authorize the Commissioner to gather information, establish examination procedures, and regulate the issuance of LOAs; and Section 7 states that LOA issuance, as a delegated authority, can be recalled, restricted, or suspended at any time to maintain administrative integrity. Jurisprudence, especially CIR v. Sony Philippines, Inc. (G.R. No. 178697, November 17, 2010), confirms that a valid assessment requires a valid LOA.

In view of numerous complaints from taxpayers, stakeholders, and internal units regarding irregularities and inconsistencies, and to protect the integrity of audit operations. the BIR will conduct a comprehensive review of existing policies and procedures. To prevent exposure to potential abuse and operational weaknesses and to strengthen the credibility and defensibility of the BIR's audit process, the following are hereby ordered TSBUREAU OF INTERNALREVENtE RECORDS MANAGEMENT DIVISION

ABmiN UN+1:14:35pm NOV ERNnal Df ce Bldg., Senator Miriam Defensor-Santiago Avenue, Diliman, Quezon City .Time: Trunkline: 8981-7000 ; 8929-7676 Website: www.bir.gov.ph

HI. ORDER

as issuing LOA, MO, examination, and verification of taxpayers' books of accounts, lifted by the Commissioner. accountability, integrity, and transparency mandated by Republic Act No. 6713, or the Code of Conduct and Ethical Standards for Public Officials and Employees, and to allow the BIR to address systemic issues, protect taxpayer rights, and develop a transparent, standardized. and modernized audit framework, all ongoing field audits and related field operations, such records, and other related transactions, are hereby ordered SUSPENDED until the order is In line with the principles of control and supervision, as well as the standards of

be maintained throughout the year. Therefore, the issuance of Assessment Notices, Additionally, taxpayers may voluntarily pay their known deficiency taxes without needing approval from the appropriate revenue officials. Warrants, and Seizure Notices shall continue under the exceptions outlined in Section IV. However, it is imperative to stress that efforts to maximize revenue collection should

HHI. COVERAGE

related field operations, including but not limited to: This order applies to all operating offices of the BIR that conduct field audits and

6. VAT Audit Unit (LTS); 2. 4. National and Regional Investigation Divisions; 5.Assessment Divisions; 7. VAT Audit Sections; 8. Office Audit Sections; 1. Large Taxpayers Service (LTS); 3 9. Revenue Regions (RRs): Revenue District Offices (RDOs); All other offices, committees, and task forces authorized to conduct

related transactions or investigations. examinations, verification of taxpayers' books of account, records, and other

IV. EXCEPTIONS

During this suspension period, the issuance of written orders to audit or investigate taxpayers' internal revenue liabilities is suspended, except in the following circumstances:

1. Investigation of cases prescribing within six (6) months from the date of this

Order:

V.rn C NOV 2 4 2025 S RF INTERNANTREN RUCEAOS 3. Examination or verification of internal revenue tax liabilities of taxpayers 4. LOAs/MOs necessary for active criminal probes conducted by duly authorized 5 Claims for refund where the issuance of an LOA is statutorily required; and Processing and verification of estate tax returns, donor's tax returns, capital gains stocks, together with the documentary stamp tax returns related thereto: retiring from business; tax returns, and withholding tax returns on the sale of real properties or shares of enforcement units through verified intelligence reports, inter-agency referrals, third-party data validation, or risk-scoring anomalies that require immediate audit action where delay would prejudice the government's case;

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6. Other matters/concerns where deadlines have been imposed or under the orders

of the Commissioner.

V. SPECIFIC DIRECTIVES

pending or unserved LOAs, revalidated or expired LOAs, and supplementary or related LOAs, MOs, including their status, to the Office of the Commissioner within fifteen (15) All concerned offices, committees, and task forces must submit an inventory of all

working days from the effective date of this Order.

issued during the suspension period unless it falls under the exceptions in Section IV. No revalidation, extension, replacement, or supplementary LOA and MO shall be

integrate digital safeguards and uniform audit standards. Reforms is directed to evaluate existing policy frameworks, identify operational and systemic vulnerabilities, recommend a revised, integrity-based LOA issuance protocol, and The Technical Working Group/Review Committee on LOA Integrity and Audit

the Commissioner. The Committee shall submit its recommendations within the period prescribed byl

VI. MONITORING AND ACCOUNTABILITY

personnel shall be subject to appropriate disciplinary action, without prejudice to any applicable civil or criminal liability. Failure to comply with this Order shall constitute an administrative offense. Erring

within their areas of responsibility. All internal revenue officers and others concerned shall ensure strict enforcement

VII. EFFECTIVITY

This Order shall take effect immediately upon issuance.

CHARLITO MARTIN R. MENDOZA

Commissioner of Internal Revenue

BUREAU OF INTERNAL REVENL' RECORDSMA NAGEMENT DIVISION

NOV 2 4 2025

IADMIN UNtT OSoM

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