Taxpayers may refuse to comply with requests from revenue officers if these fall outside the coverage stated in official audit documents such as letters of authority (LOAs) and mission orders (MOs), the Bureau of Internal Revenue (BIR) said.
During a Senate blue ribbon committee hearing on Tuesday, BIR Commissioner Charlie Mendoza discussed the provisions of Revenue Memorandum Order (RMO) No. 1-2026, which outlines stricter guidelines on how tax audits should be carried out, according to Inquirer.net.
Mendoza said the new rules are intended to clearly define the limits of audit instruments, including LOAs, MOs, and Tax Verification Notices, and to ensure that taxpayers are properly informed of what examiners are authorized to request.
“By prescribing mandatory labels for these instruments, the Bureau provides taxpayers with explicit notice of the scope and limits of the authority being exercised,” Mendoza said.
He stressed that taxpayers have the right to decline requests that are not covered by the audit authority stated in the document presented to them.
“If a revenue officer requests something that is not within the scope stated in the audit instrument, the taxpayer has the right to refuse,” Mendoza said in Filipino.
“In this way, we protect due process and ensure that the extent of audit authority is disclosed upfront,” he added.
Mendoza also presented what he described as major reforms in audit procedures, including the adoption of a Single-Instance Audit Framework that will restrict tax examinations to one LOA per taxpayer each year.
“Under this, there will no longer be simultaneous audits. Compliance becomes simpler and more organized because there is only one audit for a given year and a single submission of requirements,” Mendoza said.
Another change introduced under the new policy is the use of risk-based and system-assisted selection, which Mendoza said would ensure that only taxpayers flagged through anonymized, system-generated criteria may be subjected to regular audits.
He said this is meant to eliminate the so-called “suki system,” or the perception that certain taxpayers are repeatedly selected for audit.
“Audit assignments are now anonymized. The identity of the taxpayer is concealed until the assignment process is completed,” Mendoza said.
“It is like the raffle of cases in court: the identities of the parties involved are not known until the assignment process is completed,” he added.
Mendoza said the anonymized system is expected to limit opportunities for harassment and reduce undue influence, while reinforcing “due process and public trust in a system that is data-driven and risk-based.”
He also disclosed that all audit-related task forces have been dissolved, with their assessment responsibilities returned to regular BIR offices to restore clearer supervision and accountability.
The BIR had earlier suspended all field audits and similar operations in November following multiple complaints involving audit instruments such as LOAs and MOs.
Despite the rollout of the new rules, Mendoza acknowledged that ensuring consistent implementation across BIR offices remains a key concern.
“We have to make sure that all our revenue regions, our unit in the national office should be able to implement this consistency and according to the letter of the rules at wala pong unnecessary exercise of discretion. So ang tutukan po namin dito sa mga daratign na araw ay ang actual implementation (So what we will focus on in the coming days is the actual implementation),” Mendoza said.
