8box Solutions Inc.


Contact Number: 09369340340
Email: sales@8box.solutions

REVENUE MEMORANDUM ORDER NO. 6-2023 issued on February 9, 2023 prescribes the updated and consolidated policies, guidelines and procedures for BIR Audit Program. In general, all taxpayers are considered as possible candidates for audit. To cover such audit/investigation, electronic Letters of Authority (eLAs) or Tax Verification Notice (TVN), as applicable shall be issued. Mandatory Cases are transactions to which an audit is required as a condition precedent for the issuance of Tax Clearance, processing of claims for tax credit/refund and other cases as may identified by the Commissioner of Internal Revenue (CIR) as priority target for audit/investigation. The following shall be covered by this type of audit: A. To be covered by eLAs: Selection Code a. Claims for tax credit/refund of the following tax types: i. Excise Tax; or ii. Income Tax (except Income Tax claims of Job Order personnel), including Final and Creditable Income Tax withheld ETRS for Excise Tax and ITR for Income Tax and Withholding Tax b. Request for Tax Clearance of taxpayers whose gross sales/receipts for the immediately preceding year exceeds Three Million Pesos (₱ 3,000,000.00) or whose gross assets upon retirement exceeds Eight Million Pesos (₱ 8,000,000.00) i. Due to death of taxpayer; or ii. Taxpayers retiring from business; or iii. Taxpayers undergoing merger/ consolidation/split-up/spin-off and other types of corporate reorganizations TRC c. Cases returned to the Investigating Offices (IO) where the original Group Supervisor (GS)/ Revenue Officer (RO) who conducted the audit are no longer available due to transfer of work assignment or separation from service (e.g., retirement, resignation, AWOL, etc.) i. For reinvestigation; or ii. For compliance of review findings which resulted to deficiency tax or additional deficiency tax CRIO 2 d. Cases referred by other IO due to taxpayer’s transfer of business registration, where taxpayer agreed to have the audit continued by the new IO, provided the covered period is not yet prescribing. TOR e. One-Time Transactions (ONETT) i. Cases which review findings resulted to a deficiency tax; or ii. Real property transactions with findings in the Electronic Certificate Authorizing Registration (eCAR) System OTT f. Policy cases/industry issues under the directive of the Commissioner MCIR B. To be covered by TVNs: a. Persons requesting for Tax Clearance whose gross sales for the immediately preceding year is One Million Pesos (₱ 1,000,000.00) but not exceeding Three Million Pesos (₱ 3,000,000.00) or whose total assets upon retirement is Three Million Pesos (₱ 3,000,000.00) but not exceeding Eight Million Pesos (₱ 8,000,000.00) i. Due to death of the taxpayer; or ii. Taxpayers retiring from business; or iii. Taxpayers undergoing merger/consolidation/split-up/spin-off and other types of corporate re-organization. b. Claims for Value Added Tax (VAT) Refund; c. Income Tax Refund of Job-Order personnel; and d. Claims for refund/tax credit arising from erroneous payment of taxes, including double payment of taxes due to system error/glitch. Priority Audit Cases are cases which have been electronically selected by the IRIS-Audit Module based on prescribed selection criteria pursuant to identified risks that need immediate action. The prescribed selection criteria shall make use of information from filed tax returns and other pertinent tax information available in the BIR Systems and the selection code for these are already embedded into the said module. Also covered under this category are audit cases that shall be handled by the VAT Audit Section (VATAS) and Office Audit Section (OAS) of the Assessment Divisions (AD), and Large Taxpayers VAT Audit Unit (LTVAU) under the Large Taxpayers Service (LTS). The execution of the “Run Audit Program” in the IRIS-Audit module, including the submission of the list of taxpayers to be audited, shall be the responsibility of the Assistant 3 Commissioner of the Assessment Service (ACIR-AS) and ACIR-LTS for nonlarge taxpayers and large taxpayers, respectively. Priority audit case can also be manually selected by the concerned Regional Director (RD)/ACIR-LTS but this has to be approved by the CIR. The selection code for these cases shall be “PCIR”. The Policies and Procedures on i) Issuance of eLA/TVN; ii) Assignment of Cases; iii) Conduct of Audit and Submission of Reports of Investigation; iv) Review of Audit Reports and Issuance of Termination Letter; v) Handling of Protests Against Tax Assessments; vi) Monitoring of Cases; vii) Issuance of Replacement eLA; and viii) Administrative Sanctions are specified in the Order.