Philippines: Updated guidelines for tax audit program
Guidelines for the tax audit program, including a single-instance audit framework, risk-based selection, and anonymized case assignment.
September 10, 2026
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) No. 22-2026 (dated August 24, 2026) prescribing the consolidated and revised policies, guidelines, and procedures for the BIR audit program.
Summary of key provisions
- All audits and verifications of internal revenue tax liabilities must 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 is considered unauthorized.
- A taxpayer is generally subject to only one eLA for a given tax year, covering all applicable internal revenue tax types. Audit activities are limited to the tax types and tax periods expressly covered by the eLA, TVN, or MO.
- The issuance of eLAs, TVNs, and MOs is generally based on a system-assisted and risk-based taxpayer selection process utilizing defined criteria, data, and risk indicators.
- Audit cases are assigned through an anonymized process when practicable, keeping the taxpayer's identity concealed during selection and assignment until finalized in the system to ensure impartiality.
- Audit cases are classified into mandatory cases (required as a condition precedent for tax clearance or refund processing) and priority cases (electronically selected through risk-based criteria requiring immediate action).
- Taxpayers claiming income tax refunds or tax credit certificates under the tax code are subject to the verification of books of accounts and a thorough audit to ascertain the validity and propriety of the claim.
- Taxpayers must submit documents within 10 calendar days from request. Continued non-compliance after formal notices may lead to the issuance of a subpoena duces tecum (SDT) and potential criminal proceedings under the tax code.
- Taxpayers may opt to have examinations conducted either at their registered place of business or at the appropriate BIR office, subject to submitting the prescribed consent. This option is no longer available once an SDT has been issued.
- Replacement eLAs may be issued to ensure continuity when the assigned revenue officer (RO) or group supervisor (GS) cannot continue the audit, and consolidated eLAs may combine existing authorities for the same taxpayer and tax year.
- Audit reports and assessments may be subjected to a Revalida or “Audit of Auditors”.
Read a September 2026 report prepared by the KPMG member firm in the Philippines