THE Bureau of Internal Revenue (BIR) has ordered the immediate suspension of its audit operations, after complaints over the misuse of letters of authority (LOA).
“I have ordered the immediate suspension of all field audits and other related operations, including the issuance of Letters of Authority (LOAs) and Mission Orders (MOs), effective immediately, in accordance with Revenue Memorandum Circular (RMC) No. 107-2025,” BIR Commissioner Charlito Martin R. Mendoza said in a statement.
“No LOA or MO shall be created, printed, signed, or served during the suspension period,” he added.
Finance Secretary Frederick D. Go in a separate statement said all field audits were suspended “in response to the concerns raised by the taxpayers regarding the issuance of Letters of Authority and Mission Orders.”
The LOA allows revenue officers to open an investigation into a taxpayer’s liabilities, and is required before any audit can proceed.
“We hear the people. We hear your concerns and are immediately acting on them. The people deserve better,” Mr. Go said.
“The Department of Finance is committed to protecting our taxpayers from potential abuse through a comprehensive review of our existing policies and procedures,” he added.
Mr. Mendoza, who assumed his post on Nov. 13, said the temporary suspension will apply to all BIR offices involved in audit and field operations.
This includes the Large Taxpayers Service, Revenue Regions and District Offices, Assessment Divisions, Value-Added Tax Audit Units, and Intelligence and Special Audit Units.
“The exceptions to the suspension apply only to urgent or legally mandated cases such as active criminal investigations, one-time transactions, audits prescribing within six months, refund claims that require audits, or immediate action on taxpayers flagged by verified intelligence,” the BIR chief said.
Mr. Mendoza also said he instructed the creation of a Technical Working Group on the Letters of Authority and Mission Orders Integrity and Audit Reforms.
The group will evaluate existing procedures, identify operational and systemic vulnerabilities, recommend revised LOA protocols, and integrate digital safeguards and uniform audit standards, he said.
“This suspension is necessary to protect taxpayer rights, strengthen internal discipline, and ensure the integrity of our audit processes. We take every complaint seriously, and any misuse of authority, harassment, or irregularity has no place in the Bureau,” Mr. Mendoza said.
Meanwhile, Senator Erwin T. Tulfo filed Senate Resolution No. 180 urging the Blue Ribbon Committee to investigate the misuse and “weaponization” of LOAs.
“We hope that Blue Ribbon will tackle this as soon as possible because they have been abusing this while everyone is busy with the flood control mess,” Mr. Tulfo, who co-chairs the committee, told a news briefing in mixed Filipino and English.
In the resolution, Mr. Tulfo said the committee should assess the integrity of existing audit and LOA issuance protocols, examine paper and digital trail vulnerabilities, internal controls, and personnel accountability mechanisms; and recommend reforms.
“We have received complaints from companies that BIR personnel have been using LOA to extort businesses, even though they had already paid their taxes,” he said.
Business groups have claimed that BIR personnel issued excessive and irregular LOAs, such as those covering taxable years already settled and fully paid; improperly combined multiple taxable years; and manipulated assessments in exchange for unofficial settlements.
Mr. Tulfo said the LOAs are being used to pressure businesses into paying “unofficial” taxes, with the discounted payment being pocketed by BIR personnel.
“What they are doing is excessive,” he added. “Even if a businessman or business has paid their taxes, they will still inspect it.”
Mr. Tulfo said that he intends to invite former BIR Commissioner Romeo D. Lumagui, Jr. and examiners into the Senate probe. — Aubrey Rose A. Inosante and A.H.Halili