BIR to tighten LOA issuance

THE Bureau of Internal Revenue (BIR) will restrict the issuance of letters of authority (LOA), requiring clearance from the commissioner amid allegations that the documents have been misused or weaponized.

Commissioner Charlito Martin R. Mendoza told senators on Thursday these letters — documents that authorize tax audits — would no longer be issued solely at the regional level. Officials must first justify why a taxpayer should be audited and present the legal and factual basis for the request.

“One reform we are looking at is introducing proper checks and balances in the issuance of LOAs,” he said.

Mr. Mendoza added that the agency plans to limit the number of LOAs taxpayers receive, noting that multiple BIR units could issue audit letters. “We will not stop audits, but we want to integrate them within the regular units of the BIR.”

The BIR earlier banned field audits, LOAs and mission orders after business groups and lawmakers warned of excessive and irregular issuances. Senators also alleged that some personnel kept as much as 70% of collections from audits. — Adrian H. Halili