BIR Letter of Authority (LOA) is a formal letter of authorization issued by the Philippine Bureau of Internal Revenue (BIR), authorizing a person or organization to conduct an audit, investigation or review of one or more tax matters. The LOA is an important document that enables the BIR investigation agency to conduct inspections and audits to ensure that taxpayers comply with Philippine tax regulations.
The LOA will usually list the following information:
Audit scope and purpose
Auditor’s name and title
investigation period
Date and place of audit
List of documents and records requested
After receiving the LOA, the audited person or company must cooperate with the auditor’s request and provide all necessary documents and records for the audit. If the auditee refuses to cooperate, the auditor may issue another document, the BIR Subpoena, to testify or give evidence. If any violations are found within the audit period, the auditor may issue an audit report and corresponding fines to the auditee.
The following is the process of issuing a Letter of Authority (LOA) by the Philippine Bureau of Internal Revenue (BIR):
BIR receives complaints from taxpayers who suspect irregularities or discover possible tax problems themselves.
BIR reviews these complaints or findings and determines whether further investigation is warranted.
BIR issued a LOA authorizing auditors to conduct audits, investigations or audits of taxpayers suspected of violations.
After the auditor receives the LOA, he will contact the taxpayer to inform them of the scope and purpose of the audit, the name and position of the auditor, and the duration and location of the audit.
Taxpayers must provide all necessary documents and records for audit purposes. If the auditee refuses to cooperate, the auditor may issue another document, the BIR Subpoena, to testify or give evidence.
The auditor will conduct the audit and issue an audit report to the auditee within the audit period. If any violation is found, the auditor may issue a corresponding fine to the auditee.
If the auditee disagrees with the audit results or disagrees with the fine, he can appeal to the BIR.
In short, the LOA is an important document for BIR to conduct audits, investigations or audits. Auditors need to conduct investigations within the scope authorized by the LOA and issue an audit report to the auditee within the audit period.
