BIR to continue probe on tax liabilities

MANILA, Philippines - The Bureau of Internal Revenue said it would continue its investigation on taxpayers’ tax liabilities even as it receives legal petition notices (LPNs) from individuals or entities questioning the audit.

The BIR said there has been a proliferation of LPNs or similar documents coming from taxpayers and practitioners questioning the validity of the electronic Letters of Authority (ELAs) issued by the country’s main tax collection agency.

“Even as we repeatedly reply to these LPNs reiterating the validity of the ELAs, these taxpayers persist on sending LPNs, thinking that LPNs will stop or defer the investigation process.  However, it is evident that they misconstrue the consequence of these LPNs and are ignoring the long established procedures for audit, assessment and protesting deficiency assessments,” said BIR Commissioner Kim Henares.

“The normal process and procedures related to audit/investigation arising from ELA will not be suspended notwithstanding the receipt of LPN questioning the validity and enforceability of the ELA duly issued by the concerned regional director for the audit of taxpayer within the region inasmuch as the issue has already been clarified,” Henares said.

The BIR circular clarifies taxpayers concerns on the audit program, and their responsibility in engaging tax agents.

Henares underscored the need for taxpayers to understand the implication of these LPNs and/or certain procedures related to audit, such as issuance of subpoena duces tecum and assessment notices to prevent any attempt by taxpayers and practitioners to thwart and undermine the authority of the BIR to exercise its functions provided by law.