Bureau of Internal Revenue
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) No. 22-2026, dated 24 August 2026, prescribing the consolidated and revised policies, guidelines, and procedures for the BIR Audit Program.
The following are the salient points of the RMO:
- All audits and verifications of internal revenue tax liabilities shall be conducted only upon the issuance of a valid electronic Letter of Authority (eLA), Tax Verification Notice (TVN), or Mission Order (MO). Any audit or verification conducted without such authority shall be considered unauthorized.
- A taxpayer shall generally be subject to only one (1) eLA for a given taxable year, covering all applicable internal revenue tax types, consistent with the Single-Instance Audit Framework. Audit activities shall be limited to the tax types and taxable periods expressly covered by the eLA, TVN, or MO.
- The issuance of eLAs, TVNs, and MOs shall generally be based on a system-assisted and risk-based taxpayer selection process utilizing defined criteria, verifiable data, and risk indicators derived from filed tax returns, third-party information, data analytics, and other information available within BIR systems.
- Audit cases shall, as far as practicable, be assigned through an anonymized process, whereby the taxpayer’s identity remains concealed during selection and assignment stages until the audit case is finalized in the system, in order to ensure impartiality and prevent undue influence.
- The Order classifies audit cases into Mandatory Cases and Priority Cases, and provides the corresponding criteria and selection codes for such cases.
- Mandatory Cases refer to transactions or situations where audit or verification is required as a condition precedent to the issuance of tax clearance, the processing of claims for refund or tax credit, or in other cases as may be identified by the Commissioner of Internal Revenue (CIR) as primary target for audit or investigation.
- Priority Cases refer to cases to be covered by eLAs that are electronically selected through the prescribed BIR system based on prescribed risk-based criteria requiring immediate action.
- Taxpayers claiming income tax refunds or tax credit certificates under Sections 58(E) and 76(C) of the Tax Code shall generally be subjected to the verification of books of accounts and a thorough audit to ascertain the validity and propriety of the claim.
- Failure by taxpayers to submit documents within ten (10) calendar days from request shall result in the issuance of a First Notice for Presentation/Submission of Documents/Records, followed by a Second and Final Notice in case of continued non-compliance. Persistent failure or refusal to submit records may result in the issuance of a Subpoena Duces Tecum (SDT) and possible criminal proceedings under Section 266 of the Tax Code.
- Taxpayers may opt to have audit examinations conducted either:
- at the taxpayer’s registered place of business; or
- at the appropriate BIR office,
subject to the submission of the prescribed Taxpayer’s Consent on Audit Venue/Authorized Representative. This option is no longer available once an SDT has been issued.
- The Order recognizes the issuance of Replacement eLAs to ensure continuity of audits where the originally assigned Revenue Officer (RO) or Group Supervisor (GS) can no longer continue the audit, and Consolidated eLAs to combine two or more existing eLAs covering the same taxpayer and taxable year into one (1) unified authority, pursuant to the Single-Instance Audit Framework.
- Audit investigation reports and assessment issuances may be subjected to a Revalida or “Audit of Auditors”.
The RMO shall take effect immediately.
Here are the links to the full texts of the issuance: RMO No. 22-2026, Annex A, Annex B, Annex C, Annex D, Annex E and Annex F.