RMO No. 1-2026 — Prescribing Revised Policies, Controls, and Procedures for Tax Audit and Assessment Following the Lifting of the Suspension Imposed Under Revenue Memorandum Circular No. 107-2025 Digest | Full Text | Annex A | Annex B

Bringing In Revenues for Nation-Building BUREAU'OF INTERNAL REVENUE Republic of the Philippines Department of Finance National Office Quezon City PILIPINAS BAGONG

JAN "2 7 2026

REVENUE MEMORANDUMORDER NO. 0 0 1 - 2 0 2 6

SUBJECT PRESCRIBING REVISED POLICIES, CONTROLS, AND PROCEDURES FOR TAX AUDIT AND ASSESSMENT

FOLLOWING THE LIFTING OF THE SUSPENSION IMPOSED UNDER REVENUE MEMORANDUM CIRCULAR NO. 107-2025

TO All Internal Revenue Officials/Officers and Others Concerned

I OBJECTIVE

Pursuant to Revenue Memorandum Circular (RMC) No. 107-2025, tax audit and related

numerous complaints from taxpayers, stakeholders, and internal units regarding irregularities and inconsistencies in the conduct of tax audits. field operations of the Bureau of Internal Revenue (BIR) were suspended in view of

identify weaknesses and strengthen controls and oversight mechanism. Following conduct of such review, the TWGRC-AIAR formulated and recommended for the adoption of new Thereafter, a Technical Working Group Review Committee on Assessment Integrity and Audit Reform (TWGRC-AIAR) was created purposely to review existing audit processes,

policies, controls and procedural guidelines for the conduct of tax audit.

This Revenue Memorandum Order (RMO), therefore, is hereby issued to prescribe revised policies, controls, and procedural guidelines for audit initiation, conduct, and assessment with the end view of ensuring transparency, preventing misuse or abuse of audit authority, upholding due process, and promoting responsibility and accountability

HI. SCOPE OF RESUMPTION

The resumption of tax audit and related field operations shall cover, but shall not be limited to, the following activities:

a. Issuance of Electronic Letters of Authority (eLAs), Mission Orders (MOs), and Tax Verification Notices (TVNs): 05E RNiafig., Senator Miriam Defensor-Santiago Avenue, Diliman, Quezon City RNALREVENU T

JAN 27 2026 Trunkline: 8981-7000 ; 8929-7676 Website: www.bir.gov.ph

ADMiN UNiT.14 25pMv -

b. Continuation and completion of audit cases previously suspended pursuant to RMC No. c. Enforcement, verification, assessment, and collection activities requiring audit or field 107-2025:

operations; and d. Other audit or enforcement activities necessary to protect revenue or enforce compliance, subject to applicable issuances and the controls set forth in this RMO.

III. RESPONSIBILITIES

A. Mandatory Labels for Taxpayer Verification

by the BIR, strictly within their defined scope and limitations, and consistent with existing laws and revenue issuances, particularly RMO No. 6-2023, as amended. The following labels shall be prominently displayed on the audit/verification instruments: Upon effectivity of this RMO, audit and verification instruments may be issued and utilized

a. Electronic Letter of Authority ACCOUNTING RECORDS An eLA shall prominently bear the label: "FULL EXAMINATION OF BOOKS OF ACCOUNTS AND OTHER

b. Mission Order

An MO shall prominently bear the label: "VERIFICATION, SURVEILLANCE. MONITORING, AND INSPECTION ACTIVITIES ONLY - LIMITED AUTHORITY"

c. Tax Verification Notice "VERIFICATION AUTHORITY -- LIMITED SCOPE A TVN shall prominently bear the label:

B. System Controls and Responsibilities

controls governing the issuance and monitoring of audit authorities generated through IRIS-CMS-A, particularly eLA, are properly configured, maintained, and enforced in accordance with existing laws, rules, and revenue issuances. The Internal Revenue Integrated System -- Case Management System -- Audit (IRIS-CMS- A) Administrator and the Information Systems Group (ISG), shall ensure that system

mandatory fields, and validation controls require the inclusion of the following, at a minimum: For eLAs, the IRIS-CMS-A Administrator shall ensure that the system templates.

T' 2 TAbMI hit JAN 2 7 2026 1 Fg RUREADS C S RF INTERMEN RENENUN 1 O A f a. b Code), depending on whether the authority issued pertains to a regular audit or A mandatory system field requiring the issuing office to indicate the applicable The mandatory label prescribed under this RMO, which appears prominently The taxpayer's name and Taxpayer Identification Number (TIN); The assigned Revenue Officer/s (RO) and Group Supervisor/s (GS); a tax fraud audit; and on the face of the eLA and is correctly generated and reflected in IRIS-CMS-A The tax types covered and the corresponding taxable period/s; legal basis under the National Internal Revenue Code of 1997, as amended (Tax

C 2 of 14

For TVNs and MOs, which are governed by their respective issuance procedures under existing revenue issuances, the following controls shall be observed:

b. Every TVN shall specifically identify the exact transaction, declaration, or c. No language implying full audit or assessment authority shall appear in any a. The correct instrument type shall be clearly indicated: instrument shall be properly reflected in the issued document. The applicable mandatory labels and identifiers corresponding to each claim being verified; TVN or MO; and

A, without prejudice to the accountability of concerned offices and ROs for the accuracy, completeness, legality, and propriety of information encoded and authorities issued using The responsibility of the ISG under this Section shall be the configuration, maintenance, such system. and integrity of system templates, mandatory fields, and validation controls in IRIS-CMS-

IV. SINGLE-INSTANCE AUDIT FRAMEWORK

taxpayer shall, as a general rule, be subject to only one eLA for a given taxable year, conduct of tax audits. The issuance of multiple or overlapping eLAs covering the same The Single-Instance Audit Framework is the BIR's new policy approach under which a taxpayer and taxable year is prohibited. covering all applicable internal revenue tax types, including Value-Added Tax (VAT) The framework is intended to prevent overlapping or fragmented audits, provide clear and consistent audit authority, and promote fairness, transparency, and accountability in the

thereafter, or those transactions concluded in the covered year that were commenced in prior years, or (ii) to establish that the same fraudulent scheme was utilized for prior or determine or trace continuing transactions entered into the covered year and concluding subsequent years (RMO No. 24-2008,' as amended by RMO No. 27-20102). As an exception, however, in fraud cases, one eLA may cover several years in order to (i)

A. Scope and Application of Single-Instance Audit Framework

a. New audits initiated through the issuance of an eLA starting from the effectivity of b. Audits resumed from suspension pursuant to RMC No. 107-2025, which are c. Re-issued eLAs issued solely for the purpose of maintaining continuity of audit automatically consolidated into a single eLA for the same taxpayer and taxable year, authority. this RMO. in accordance with Section V hereof.

B. Exceptions to the Single-Instance Audit Framework

As an exception, a separate audit or verification authority may be issued for cases that are transactional, event-based, or terminal in nature, including but not limited to: a. One-Time Transactions (ONETT): b. Requests/Applications for tax clearance;

2 Re-invigorating the Run After Tax Evaders (RATE) Program and Amending Certain Portions of RMO No. 24-2008. 1Policies and Guidelines for RATE Cases 3 of 14

c. Applications for cancellation of business registration, subject to the threshold Cases with fraud and irregularity mentioned in RMO No. 24-2008, as amended by RMO No. 27-2010 amount under RMO No. 6-2023, as amended; and

taxes. In no case shall these exceptions be used to fragment, bypass, or circumvent the regular audit of books of accounts and other accounting records for recurring internal revenue

indicate the need for a broader examination of tax liabilities, such examination shall be Where findings arising from verification activities conducted under an MO or a TVN

subject to the issuance of a separate eLA.

C. Findings of Fraud

Where, in the course of audit, verification, consolidation, or review under the Single- Instance Audit Framework, findings of fraud are established or reasonably indicated, all records, documents, and working papers relating to the affected eLAs shall be referred to the appropriate investigating office for further action.

For this purpose:

a Cases falling within regional jurisdiction shall be referred to the concerned Revenue

Region's Regional Investigation Division (RID) b. Cases falling within national jurisdiction, or those otherwise requiring national-

level investigation, shall be referred to the National Investigation Division (NID)

RMO No. 27-2010. without prejudice to the issuance of a new eLA by the RID or NID, as may be appropriate, which may cover multiple taxable years, pursuant to RMO No. 24-2008, as amended by Upon referral, the handling office shall cease further audit action on the affected eLAs,

V.CONSOLIDATION OF PENDING eLAs

In light of the ongoing organizational restructuring, functional realignment, and reassignment of ROs and audit teams, and to support the full implementation of the Single-Instance Audit Framework, the consolidation of pending eLAs involving the same

necessary, a Replacement eLA shall be issued to reflect the consolidated audit authority taxpayer and taxable year shall be carried out in accordance with this Section. When

A. Automatic Consolidation Beginning March 4, 2026

Beginning March 4, 2026, all pending eLAs with ongoing investigation covering the same

allowed and filed in accordance with Section V(B) hereof. taxpayer and taxable year shall be automatically consolidated into one (1) eLA, without any action required from the taxpayer, except where a request for non-consolidation is

For this purpose:

a. A consolidated replacement eLA shall be issued to cover all applicable internal

revenue tax types for the taxable year concerned and shall be mandatorily conducted by the Revenue District Office (RDO) or Office Audit Section (OAS) of the

4 of 14

Assessment Divisions for Regional cases and Large Taxpayers (LT) Audit Divisions for Large Taxpayers Service (LTS) cases. The OAS current threshold specified under existing issuances shall be maintained

b. All eLAs subsumed in the consolidated eLA shall be deemed cancelled upon C The replacement eLA shall constitute the sole and continuing audit authority for the issuance of the replacement eLA. unless revised or amended via separate revenue issuance.

d. The replacement eLA should bear a statement that it is issued in lieu of the cancelled eLAs, as aforementioned. taxable year concerned.

However, even prior to the automatic consolidation on March 4, 2026, nothing in this

deficiencies through the modes allowed under existing issuances. RMO shall preclude the taxpayer from voluntarily settling assessed or admitted tax

B. Request for Non-Consolidation of VAT Audit Cases

not to consolidate shall be upheld and respected by the BIR. The following procedures. however, shall be followed and observed: A taxpayer with multiple pending eLAs covering the same taxable year may file a writter Request for Non-Consolidation, allowing such eLAs to proceed separately. The option

The taxpayer may file the written request with the RDO/OAS/LT Audit Divisions

taxable year concerned, which shall be referred to as the "Receiving Office" and taxpayer's other pending eLAs for the same taxable year for their information handling the eLA that covers all internal revenue tax types, except VAT, for the shall, within one (1) day endorse such request to all other BIR offices handling the copy furnished the Regional Director, for regional cases and the Assistant Commissioner (ACIR), LTS, for LTS cases.

b. The request for non-consolidation must indicate the name of Investigating Office (e.g., VATAS/LTVAU), eLA Serial Number/Audit Case Number, date of issuance, February 16, 2026. Requests filed after this date shall not be acted upon. tax type and taxable period covered by eLA. It must be filed not later than

April 30, 2026. After such date, however, or beginning May 4, 2026, all pending eLAs regardless of stage, shall be automatically consolidated beginning May 4, 2026, and shall thereafter no longer be allowed to proceed separately, in accordance with this RMO] Where the request for non-consolidation is received, the affected eLAs shall be allowed te proceed independently, and the RO/s shall continue their respective audit actions until

preclude the taxpayer from voluntarily settling assessed or admitted tax deficiencies through the modes allowed under existing issuances. But even prior to the automatic consolidation on May 4, 2026, nothing in this RMO shall

The thrust of the BIR under this RMO is to institutionalize the Single-Instance Audit Framework as the standard approach in the conduct of tax audits. The measures set forth in

Program for 2026. this RMO are intended to support its full and permanent implementation under the Audit BUREAU OF INTERNALREVENUE RECORDS MANAGEMEN E F DIVISION

JAN 2 7 2026

ADMIn UniT - 1 I 5 of 14

C. Effect of Consolidation

For purposes of this Section, consolidation shall mean:

a. The issuance of a single Replacement eLA covering all applicable internal revenue b. The cancellation of all other eLAs covering the same taxable year that are subsumed tax types for a given taxable year; and

under the consolidated eLA.

As a general rule, the Replacement eLA shall be issued by the RDO/OAS/LT Audit Office

year shall be consolidated into such subsisting eLA. and shall cover all internal revenue tax types. All other eLAs covering the same taxable

If there is no subsisting eLA open in the the RDO/OAS/LT Audit Office, the Regional Director/ACIR-LTS shall issue the Replacement eLA to the RDO/LT Audit Office where the taxpayer is registered for the continuance of audit.

D. Assignment of ROs

work and shall not be construed as the issuance of a new audit authority. consolidation shall be deemed an administrative adjustment to maintain continuity of audit Any reassignment made by the Heads of Investigating Offices in connection with

E. Findings of Fraud

established or reasonably indicated, all records, documents, and working papers relating to the affected eLAs shall be referred to the appropriate investigating office for further action. Where, in the course of consolidation or review of pending eLAs, findings of fraud are

For this purpose:

a. Cases within regional jurisdiction shall be referred to the concerned Revenue b. Cases falling within national jurisdiction, or those otherwise requiring national- level investigation, shall be referred to the NID. Region's RID.

Upon referral, the handling office/s shall cease further audit action on the affected eLAs without prejudice to the issuance of a new eLA by the RID or NID, in accordance with existing laws and issuances.

VI. ISSUANCE OF NEW ELECTRONIC LETTERS OF AUTHORITY

A. System-Assisted Audit Selection

To ensure objectivity and integrity in the initiation of audits, the issuance of new eLAs shall centralized approval. be governed by system-assisted taxpayer selection, based on defined criteria and subject to

As a matter of policy, all taxpayers are generally considered potential taxpayers for audit and assessment under existing laws and issuances. However, the initiation of audits shall be limited to taxpayers selected through the system-assisted process prescribed in this Section, in accordance with approved criteria and safeguards.

6 of 14

B. Criteria in Audit Selection

attached as Annex "A" of this RMO. Taxpayer selection for audit shall be based primarily on the selected criteria, which refer to objective, system-defined risk parameters approved for audit selection. The criteria are

issuance shall be implemented on or before April 16, 2026. A more comprehensive procedure for taxpayer selection, case assignment, and eLA

C. System-Assisted Generation of Audit Lists

generated through BIR information systems, based on the approved audit selection criteria. All lists of taxpayers proposed for the issuance of new eLAs shall be automatically

issued new eLAs. Revenue (CIR) for approval. Only taxpayers included in the approved audit list may be The system-generated audit list shall be submitted to the Commissioner of Internal

regional offices, the ACIR-LTS for LTS offices, the ACIR for Enforcement and Advocacy be endorsed by the appropriate approving authority, namely: the Regional Director for Service (ACIR-EAS), or the Deputy Commissioner for Legal Group (DCIR-LG), as applicable. However, where taxpayer recommendations are made by a RDO, OAS, RID, NID, LTS Offices, or other authorized offices, such written recommendations/ justification shall

by the CIR. All endorsed recommendations shall be incorporated into the system-assisted process subject to validation against the approved audit selection criteria and subject to approval

D. Anonymized Selection and Assignment Process

initiation. This process ensures that taxpayer identity remains concealed during initial Pending full automation, the BIR shall implement an Anonymized Selection and assignment, thereby separating taxpayer selection from RO designation. Assignment Process to reduce discretion-related risks and strengthen transparency in audit

The following procedures shall govern the anonymized selection and assignment process:

a. Central Generation, Approval and Dissemination of Taxpayer Lists: The ISG details. The list of taxpayers duly approved by the CIR shall be disseminated by the same directly to the respective Regional Director/ACIR-LTS. shall generate anonymized lists of taxpayers based on the approved criteria, subject to the approval of the CIR. Each taxpayer shall be represented solely by a system generated identifier, without disclosure of the taxpayer's name, TIN, or registration

b. Assignment of ROs: The Regional Director/ACIR-LTS shall furnish the

Accordingly, the latter shall assign the case strictly based on the following: anonymized list of taxpayers to the respective Heads of Investigating Offices.

ii. Applicable rotation rules i. Workload balancing (S RECORDS MANAGEMENT BUREAU OF INTERNAL REVENUE A1a VISION

JAN 2'7 2026

admin unit - e TiME: 2 4:25pm 7 of 14

ACIR-LTS, as applicable. All assignments shall be documented and approved by the Regional Director or the

c.Return and De-Anonymization: Assigned anonymized case lists shall be returned to the ISG for de-anonymization. The de-anonymized list shall thereafter be forwarded to the appropriate Office for encoding into IRIS-CMS-A.

d. Documentation and Monitoring: All assignments shall be fully documented and monitored for compliance with workload distribution, rotation rules, and for audit trail purposes. Monthly compliance reports shall be submitted to the anonymization requirements. Supervising officials shall certify adherence to anonymization procedures and ensure the availability of complete documentation Office of the ACIR for Assessment Service.

E. Compliance Instructions

To ensure strict observance of the anonymized process:

a Revenue District Officers and involved Division Chiefs shall ensure that no RO and

GS are informed of taxpayer identity prior to confirmation of assignment.

b. Any deviation from anonymization procedures shall require written justificatior

and prior approval by the CIR, as endorsed by the concerned Regional Director or ACIR-LTS.

c. The ISG shall maintain a secure record of all de-anonymization events and ensure accurate and timely encoding in IRIS-CMS-A.

F. Issuance of eLA

An eLA shall be issued only after completion of the system-assisted taxpayer selection, centralized approval, and anonymized assignment processes.

of the approved audit authority in IRIS-CMS-A for the generation and issuance of the eLA Upon completion of these steps, the handling office shall proceed with the regular encoding

All eLAs issued under this Section shall:

a. Comply with the Single-Instance Audit Framework: b. Be properly encoded and reflected in the appropriate BIR systems, including the c. Clearly reflect the approved taxpayer name, TIN, taxable year/s, tax types covered and assigned ROs and GS. IRIS-CMS-A; and

VII. TRANSFER OF TASK FORCE AUDITS AND ASSESSMENT

Framework, all audits and assessments initiated by task forces shall be transferred and To rationalize audit authority and align task force cases with the Single-Instance Audit

resolved in accordance with this Section. GE BUREAU OFINTERNALREVEN RECORDS MANAGEMENT HIVISION

JAN 2 7 2026 8 of 14

y ADMIN UNIT A ...:

procedures and controls provided in this RMO and other applicable issuances. and assessment functions are hereby deemed concluded, and their audit and assessment functions shall be absorbed by the appropriate regular offices of the Bureau, subject to the Accordingly, all existing task forces that were created primarily for the conduct of audit

An accomplishment report shall be submitted by the head of the concerned task force to CIR, detailing the status of all cases, actions taken, and the offices to which such cases have been transferred.

A. Accomplishment and Case Inventory Report

An Accomplishment and Case Inventory Report shall be submitted by the Head of the concerned Task Force to the CIR, summarizing the disposition and status of all cases handled by the task force and recommending the appropriate regular office for further action.

For RAFT Task Force cases, the Report shall be copy furnished to the DCIR-LG. For other

the case of LT, to the ACIR-LTS, as applicable. task force cases, the Report shall be copy furnished to the DCIR-Operations Group, or, in

during formal case turnover, as provided below. The Report shall be summary and inventory-based and shall not include working papers. audit papers, or detailed records, which shall be transferred only to the receiving office

At a minimum, the Accomplishment and Case Inventory Report shall indicate, for each case:

b. Taxable year(s) covered; c. Nature of the case; d. Status of the case (ongoing, with findings, pending review, completed, closed): a. Taxpayer name and TIN;

f. Amount of tax assessed, if any, and payments made or outstanding, if applicable: e. Date of issuance of the LOA/eLA, if any, and whether the case is prescribed or nearing prescription:

g. Whether indicators of fraud or serious irregularity are present; and h. The recommended regular office for turnover or closure, with brief justification.

B. Run After Fake Transactions (RAFT) Task Force

regular offices, in accordance with existing laws and issuances. All existing LOAs issued under RAFT Task Force are hereby cancelled for purposes of transition and replacement only, to allow for the issuance of new eLAs by the appropriate

All RAFT cases, including all notices, letters, records, working papers, audit notes, electronic files, and other related materials, shall be immediately turned over to the NID for appropriate action. The complete turnover of records shall be effected through the Office of the DCIR-LG, within five (5) working days from the submission of the Consolidated Accomplishment Report.

Proof of turnover shall likewise be submitted through the prescribed official channels.

Upon completion of the turnover, the RAFT Task Force and its members shall undertake no further audit, assessment, verification, or enforcement action on the transferred cases.

9 of 14

Where further audit or investigation is warranted, existing eLAs shall be cancelled and new eLAs shall be issued to designated NID ROs and GS, in accordance with existing laws and issuances and consistent with the Single-Instance Audit Framework.

through the appropriate Group. Where prior eLAs have already been closed and further audit or investigation is not warranted, the NID may recommend the closure or termination of the case to the CIR.

C. Other Task Forces

Revenue Region, RDO, or the LT Audit Office where the taxpayer is registered, for Task Force cases not covered under the RAFT Task Force shall be transmitted to the

evaluation and appropriate action.

appropriate, for possible issuance or re-issuance of an eLA. amended by RMO No. 27-2010, the cases shall be endorsed to the RID or the NID, as Where there are indicators of fraud or irregularity, mentioned in RMO No. 24-2008, as

In non-fraud cases where the taxpayer is already covered by an existing and open eLA issued by the RDO or the Office of the ACIR concerned, audit actions shall be consolidated. consistent with the Single-Instance Audit Framework and the consolidation rules provided under this RMO, and subject to re-issuance when required under applicable rules.

termination of the case to the CIR, through the appropriate Group. Where prior eLAs have already been closed and further audit or investigation is not warranted, the Revenue Region, RDO, or LT Audit Office may recommend the closure or

VIII. TRANSITION OF VATAUDIT SECTIONS (VATAS) AND LARGE TAXPAYERS VAT AUDIT UNITS (LTVAU)

To ensure alignment with the Single-Instance Audit Framework and to facilitate an orderly transition to the Audit Program for 2026, the VATAS and the LTVAU, which shall wind

winding-up period. up operations until May 15, 2026, shall observe the following policies during the

A. General Transition Measures

covering the same taxpayer and taxable year. To ensure alignment with the Single-Instance Audit Framework and this RMO, VATAS and LTVAU shall cooperate in the consolidation and transfer of pending audit cases

VATAS and LTVAU shall:

b. Review, organize, and prepare all ongoing audits and assessments for transfer to the a. Transmit all documents, records, working papers, and audit dockets relating to cases appropriate regular offices of the BIR on or before April 30, 2026. subject to consolidation or transfer to the designated handling office; and

BUREAU OF INTERNAL REVENUE S ) RFCORDS MANAGEMENT DIVISION

JAN 2 '7 2026

BY: Vadmin unil.14. IMt 1S pm 10 of 14

B. Orderly Wind-Up of Audit Activities

activities immediately. VATAS and LTVAU shall commence the orderly winding up of audit and assessment

Accordingly:

a. No new audit actions shall be initiated, except those strictly necessary to complete, consolidate, or properly transition existing cases. b. All actions taken shall be limited to activities consistent with this RMO and

subsequent issuances.

IX. AUDIT AND ASSESSMENT PROPER

The conduct of audits and the issuance of assessments shall strictly observe due process, issuances. All audit activities shall be undertaken in a manner that is fair, transparent, and audit safeguards, and proper documentation, consistent with this RMO and applicable

supported by complete and verifiable records.

A. Mandatory Use of Standardized Audit Checklist

All ROs authorized to conduct audits shall be required to use a standardized checklist of documents.

the uniform reference for identifying, requesting, receiving, and evaluating documents necessary for audit, verification, or other authorized compliance activities. The checklist shall be applied consistently across all offices and audit cases. The standardized checklist, which is attached as Annex "B of this RMO, shall serve as

Additional documents may be requested only when they are directly relevant to the specific issues identified in the audit, reasonably necessary for proper evaluation, and within the authorized scope of the audit, and such requests shall be clearly explained and properly documented in the records.

Certain industries or sectors may require additional or specialized documents due to the

the controlling reference. nature of their operations. For this purpose, industry-specific or sector-specific checklists shall be issued and shall be strictly followed and observed by the concerned ROs. Pending the issuance of such industry-specific checklists, ROs shall continue to use Annex "B" as

The mandatory use of the standardized checklist is intended to:

a. Minimize unnecessary or repetitive document requests; b. Reduce discretionary or inconsistent documentary requirements; c. Strengthen due process by clearly informing taxpayers of required submissions; and d. Improve traceability, audit review, and post-evaluation of audit actions.

No audit shall be considered procedurally complete unless the prescribed checklist has been duly accomplished reviewed and approved by the supervising official.

F RECORDS MANAGFMENT DIVISION

JAN 27 2026 11 of 14

Jv aDMIN uNiT:4:25pm JM

B. Proper Documentation of Audit Events and Taxpayer Interactions

Minutes of meetings or discussions shall be prepared for the Discussion on Discrepancy conducted after the issuance of the Notice of Discrepancy (NOD). Such minutes shall be duly signed by the taxpayer or authorized representative and the RO, with any refusal to sign clearly noted.

All other meetings or discussions with the taxpayer shall be coursed through official communication channels of the ROs or GS, such as their official email address or official office contact numbers.

C. Guidelines on the Preparation of Assessments

ROs shall not issue unreasonable assessments. In the conduct of assessments, there shall be strict observance of the assessment process prescribed under Revenue Regulations (RR) No. 12-99, as amended, and other applicable rules.

In particular, the pre-assessment stage, which consists of the issuance of an NOD under RR No. 22-2020, shall clearly and specifically set out the details of the discrepancies in order to ensure that the taxpayer is sufficiently informed and is given a reasonable opportunity to

reflects discrepancies initially noted by the handling of RO/s. Discrepancy. The NOD shall clearly state that it is not yet an assessment, but merely explain, submit supporting documents, and contest the findings during the Discussion of

Any subsequent assessment notices shall be anchored only on issues that remain unresolved

assessment, including the applicable law, jurisprudence, and relevant BIR issuances, after the discrepancy discussion and shall clearly state the factual and legal bases of the consistent with the due process requirements under Section 228 of the Tax Code.

D. Examination of Yoluminous Records

Examination and inspection of books of accounts and other accounting records shall be conducted in the taxpayer's office or registered place of business, or in the appropriate BIR office, as provided under Section 235(e) of the Tax Code. However, where the records required for audit are voluminous in nature, such that transporting, handling or reviewing them at the BIR Office would be impractical, burdensome, or disruptive to the normal business operations, the taxpayer shall be given reasonable options on the manner and venue of examination, subject to the authorized scope of the audit.

For this purpose:

a. The taxpayer may opt to physically submit the records to the BIR office conducting the audit: or b. The taxpayer may opt to have the examination of records conducted at the principal place of business of the taxpayer, subject to prior coordination with the handling RO. In choosing this option, the taxpayer shall provide a suitable area within the premises that is reasonably appropriate for the orderly examination of records, without causing undue disruption to business operations.

@ RUReADS MANaGEMENT BUREAU OF INTERNAL REVENUE T SiviSion

io

JAN 2 7 2026

Admin unit. MF 14:25pm 12 of 14

Where records are physically submitted to the BIR, the taxpayer may submit photocopies. provided that such copies are certified by the taxpayer or its authorized representative as true and faithful reproductions of the original documents. The BIR may require the presentation of original documents for verification purposes where photocopies are only such verification shall be confined within the authorized scope of the audit. submitted sans certification that they are true and faithful reproduction of the original and

E. Observance of Due Process and Audit Safeguards

ROs shall strictly observe due process and audit safeguards at all stages of audit and assessment.

In particular:

A Audit notices and communications shall be properly and timely served. b. The scope of the audit and the documents required shall be clearly identified and

Taxpayers shall be given a reasonable opportunity to submit documents and communicated to the taxpayer.

All meetings, conferences, submissions, and audit actions shall be properly conducted and documented. explanations.

Audit activities shall be confined strictly to the scope authorized under the issued audit instrument. ROs shall not:

a. Request documents not relevant to the authorized scope of audit.

c. Use audit or verification activities to exert undue pressure on taxpayers. b. Conduct verification or examination beyond the taxable year or tax types covered.

No assessment shall be issued unless the taxpayer has been afforded the opportunity to be heard, and supervising officials shall ensure that audit actions remain within authorized bounds and are supported by documented justifications.

X. SANCTIONS

ROs are hereby reminded to strictly comply with all due process requirements and audi

laws, BIR rules and regulations, and other applicable issuances. guidelines in the conduct of audits and assessments, as clearly prescribed under existing

Accountability for violations of audit rules, procedures, and safeguards shall apply in accordance with applicable laws, rules, and revenue issuances. A BIR official or employee who violates, circumvents, or fails to comply with the provisions of this RMO shall be

the filing of other actions warranted under existing laws. subject to the appropriate administrative, civil, and criminal liabilities, without prejudice to

Reports of alleged violations of this RMO, including unauthorized audit activities, non

submitted through contact us-LOA@bir.gov.ph observance of prescribed safeguards, or abuse of authority, or other violations may be

C BUREAU QE INTERNALREVENUE L) RECORDS MANAGEMENT DIVISION E

JAN 2 7 2026 13 of 14

3Y qUADMiN UNIT M: 4E 25OM TIME:

XI. REPEALING CLAUSE

repealed, modified, or amended accordingly. All revenue issuances or portions thereof which are inconsistent herewith are hereby

XII. EFFECTIVITY

This RMO shall take effect immediately.

CHARLITO MARTIN R. MENDOZA

I1 Commissioner of Internal Revenue

9 RECORNS MANAGEMENT HIVISION P BUREAU OF INTERNAL RFVENUE E

JAN 2 7 2026

y M "ADMIN UNITM3 4: 2SPM TIME

14 of 14