BIR Audit Program: Audit/Investigation Of Taxpayers of Mandatory Cases and Priority Taxpayers/Industries

The CIR of the BIR just recently issued Revenue Memorandum Order (RMO) No. 19-2015 of the BIR Audit Program that prescribes the policies, guidelines and procedures to be observed in the audit/investigation of tax returns to enhance taxpayers' voluntary compliance by encouraging the correct payment of internal revenue taxes through the exercise of the enforcement function of the Bureau.

 

It is stated in the RMC that in general, all taxpayers are considered as possible candidates for audit. To cover such audit/investigation of taxpayers, electronic Letters of Authority (eLAs) shall be issued. The said audit/investigation shall include, but not limited to, the following cases:

 

1. Mandatory Cases

 

1.1 Taxpayers with claims for income tax refund or issuance of tax credit certificate (Selection Code: ITR for income tax refund and ITC for tax credit certificate)

 

1.2 Taxpayers with claims for Value-Added Tax (VAT) refund/credit (Selection Code: VTR for VAT refund and VTC for VAT credit certificate)

 

1.3 Claims for tax refund/credit of excise tax under Title VI of the Tax Code, as amended, regardless of amount (election Code: ETRS for excise tax refund and ETCS for Excise tax credit certificate)

 

1.4 Claims for tax refund/credit on erroneously/double payment of taxes regardless of amount (Selection Code: ERTR claims for tax refund and ERTC for claims for tax credit certificate)

 

1.5 Request for tax clearance of taxpayers due to retirement/cessation of business with gross sales/receipts exceeding P1,000,000.00 or gross assets exceeding P3,000,000.00 (Selection Code: TRC)

 

1.6 Request for tax clearance of taxpayers undergoing merger/consolidation/split-up/spin-off and other types of corporate reorganizations (Selection Code: TMC)

 

1.7 Cases with unresolved Letter Notices (LNs) (Selection Code: LNA)

 

1.8 Estate tax returns with other tax liabilities (Selection Code: EOT)

 

1.9 Policy cases covered by written directive of the Commissioner (Selection Code: CIR)

 

2. Priority Taxpayers/Industries - Unless revised through the issuance of a Revenue Memorandum Order (RMO), the tax returns to be audited shall be based on the following criteria.

 

Please refer the link:  http://www.bir.gov.ph/images/bir_files/internal_communications_3/Full%20Text%20of%20RMO%202015/RMO%20No%20%2019-2015.pdf of the Priority Taxpayers/Industries, policies & procedures and full text of RMO No. 19-2015

Who Are Not Required To File Electronically And To Enroll Online eBIRForms System?

Item No. 9 of Revenue Memorandum Circular No. 19-2015 clarifies that NOT ALL TAXPAYERS ARE REQUIRED TO FILE ELECTRONICALLY. Only taxpayers enumerated in items no. 5 and 6 of the RMC are required/mandated to file electronically. Other taxpayers such as Micro Small Medium Enterprises (MSME) who are filing their own returns and have a tax payment due are not required to file electronically. 

However, nothing prevents them to voluntarily enroll and file using either the eFPS/eBIRForms electronic platform of the BIR. Thus, the exiting procedures on MANUAL FILING shall appy.

Taxpayers enumerated under RMC No. 12-2015 are not mandated to use eBIRForms and electronically filing "no payment returns".

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/rmc_no_19-2015.pdf of the full text of RMC No. 19-2015.

Therefore, those taxpayers who are not mandated to use eBIRForms and eFPS but have a tax due payment due are not required to file electronically and to register with Online eBIRForms System.

Who Are Those Mandated To Use eFPS, eBIRForms and eFile under RMC No. 19-2015

Revenue Memorandum Circular (RMC) No. 19-2015 has issued by the bureau for the clarifications/resolutions on issues and concerns to the Frequently Asked Questions (FAQs) in connection with the implementation of the Electronic Platform in Filing Tax returns under eFPS or eBIRForms for filing Income Tax Returns for Calendar Year 2014 Due on or before April 15, 2015, and others.

Those mandated to use eFPS are the following:

1. Taxpayer Account Management Program (TAMP) Taxpayers (RR No. 10-2014)

2. Accredited Imported and Prospective Imported required to secure the BIR-ICC & BIR-BCC (RR No. 10-12014)

3. National Government Agencies (NGAs) (RR No. 1-2013)

4. All Licensed Local Contractors (RR No. 10-2012)

5. Enterprised Enjoying Fiscal Incentives (PEZA, boi, Various Zone Authorities, Etc.) (RR No. 1-2010)

6. Top 5,000 Individual Taxpayers (RR No. 6-2009)

7. Corporations with Paid-Up Capital Stock of P10 Million and above (R No. 10-2007)

8. Corporations with Complete Computerized Accounting System (CAS) (RR No. 10-2007)

9. Procuring Government Agencies with respect to Withholding of VAT and Percentage Taxes (RR No. 3-2005)

10. Government Bidders (RR No. 3-2005)

11. Insurance companies and Stock brokers (RMC No. 71-2004)

12. Large Taxpayers (RR No. 2-2002, as amended)

13. Top 20,000 Private Corporation (RR No. 2-98, as amended)

Those mandated to use eBIRForms and eFile (RR 6-2014) are the folowing:

1. ACCREDITED TAX AGENTS/PRACTITIONERS & all its client-taxpayers who authorized them to file in their behalf

2. ACCREDITED PRINTERS of Principal and Supplementary Receipts/Invoices

3. One-Time Transaction (ONETT) taxpayers

4. Those engaged in business, or those with mix (both compensation and business income) who shall file a "NO PAYMENT" Return (exception under RMC No. 12-2015)

5. Government-Owned or Controlled Corporations (GOCCs)

6. Local Government Units (LGUs), except barangays

7. Cooperatives, registered with National Electrification Administration (NEA) and Local Water Utilities Admnistrations (LWUA)

For the systems requirements, browser requirements, those exempted and may file manually, steps in enrolling and other concerns please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/rmc_no_19-2015.pdf of the full text of RMC No. 19-2015.