BIR puts tax audits on hold for holidays

MANILA, Philippines — Taxmen are suspending audits during the holiday season.

Under Revenue Memorandum Circular 127-2020 dated December 2, the Bureau of Internal Revenue (BIR) said tax audits, books examinations and other field operations will be “suspended for the period December 15, 2020 to January 7, 2021.”

During the 3-week period, no letters of authority, which triggers a formal tax probe when served, as well as audit notices and mission orders are allowed to be issued to most taxpayers. This is typical practice during Christmas season by BIR to lessen opportunities for examiners to receive gifts from taxpayers they assess which in turn compromises their work.

Not all however will be covered by the probe suspension this year. BIR Commissioner Caesar Dulay exempted tax evasion cases as well as other potential delinquencies prescribing on or before April 15, 2021 from the order. This means case build-up for these matters will continue.

“In general, examiners and investigators shall make use of this period to do office work on their cases and to complete the report on those with already completed field work,” the bureau said.

In addition, audit of state agencies as well as government-owned and -controlled corporations would continue during the holidays. “Privilege stores” or tiangge which attract buyers to their cheap products during holidays will also be monitored.

Finally, processing and verification of estate, donor’s and capital gains taxes on property sales as well as stocks will continue as usual.

While prohibited to do field work, BIR also reminded examiners to “ensure maximum revenue collection,” especially with tax receipts on a decline this year because of business and consumer sentiment hampered by the coronavirus health crisis and earlier lockdowns to control the pandemic.

BIR, which typically accounts for over 80% of annual tax revenues, collected P1.6 trillion from January to October, down 10.4% year-on-year. 

That said, the bureau is all set to breach its lowered collection goal of P1.686 trillion this year, down from P1.74 trillion set last May. — Prinz Magtulis