PHILEXPORT has lauded the Bureau of Internal Revenue (BIR) for suspending all audit and field operations following mounting complaints from taxpayers, business groups and internal units regarding irregularities in audit procedures.
The temporary suspension was formalized through Revenue Memorandum Circular (RMC) No. 107-2025, issued on November 24 and signed by Internal Revenue Commissioner Charlito Martin Mendoza. The order will remain in effect until lifted by the Commissioner.
Stakeholders Cite Irregularities and Compliance Burdens
According to the BIR, the move responds to “numerous complaints” citing inconsistencies and potential misuse of audit processes. PHILEXPORT President Sergio R. Ortiz-Luis Jr. said the suspension aligns with the government’s push to streamline regulations and ease the cost of doing business.
“This is a very welcome move by stakeholders including our members who have complained of irregularities and difficulties in compliance,” Ortiz-Luis said. “It supports the government direction toward trade facilitation and reviewing regulatory processes.”
BIR Launches Comprehensive Policy Review
While audit operations are paused, the BIR will conduct a full review of its procedures to address systemic weaknesses, protect taxpayer rights and modernize audit protocols. The agency said the review aims to create a more transparent, standardized and defensible audit framework.
All ongoing field audits—including the issuance of Letters of Authority (LOA) and Mission Orders (MO), examination of books, and verification of taxpayer records—are suspended until further notice.
Key Functions to Continue
Despite the suspension, the BIR clarified that Assessment Notices, Warrants and Seizure Notices will continue to be issued. Taxpayers may also still make voluntary payments for known deficiencies without needing approval from revenue officials.
RMC 107-2025 covers all BIR offices that conduct field audits, including the Large Taxpayers Service, Revenue Regions and District Offices, investigation divisions, assessment units, VAT audit sections and other task forces authorized to examine taxpayer records.
Specific Cases Exempted
The order exempts several critical functions, such as:
– Cases set to prescribe within six months;
– Processing of estate, donor’s, capital gains and certain withholding tax returns;
– Examination of tax liabilities for businesses retiring operations;
– LOAs and MOs for active criminal investigations or high-risk anomalies;
– Refund claims requiring LOAs.
A Technical Working Group/Review Committee on LOA Integrity and Audit Reforms has been tasked to evaluate current policies, identify vulnerabilities, and recommend digital safeguards and uniform audit standards within the timeline set by the Commissioner.
The suspension takes immediate effect.