Revenue Memorandum Order No. 001-2026

Prescribing revised policies, controls, and procedures for tax audit and assessment following the lifting of the suspension imposed under revenue memorandum circular no. 107-2025

I. OBJECTIVE

Pursuant to Revenue Memorandum Circular (RMC) No. 107-2025, tax audit and related field operations of the Bureau of Internal Revenue (BIR) were suspended in view of numerous complaints from taxpayers, stakeholders, and internal units regarding irregularities and inconsistencies in the conduct of tax audits.

Thereafter, a Technical Working Group Review Committee on Assessment Integrity and Audit Reform (TWGRC-AIAR) was created purposely to review existing audit processes, identify weaknesses and strengthen controls and oversight mechanism. Following conduct of such review, the TWGRC-AIAR) formulated and recommended for the adoption of new policies, controls and procedural guidelines for the conduct of tax audit.

This Revenue Memorandum Order (RMO), therefore, is hereby issued to prescribe revised policies, controls, and procedural guidelines for audit initiation, conduct, and assessment with the end view of ensuring transparency, preventing misuse or abuse of audit authority, upholding due process, and promoting responsibility and accountability.

II. SCOPE OF RESUMPTION

The resumption of tax audit and related field operations shall cover, but shall not be limited to, the following activities:

a. Issuance of Electronic Letters of Authority (eLAs), Mission Orders (MOs), and Tax Verification Notices (TVNs);

b. Continuation and completion of audit cases previously suspended pursuant to RMC No. 107-2025;

c. Enforcement, verification, assessment, and collection activities requiring audit or field operations; and

d. Other audit or enforcement activities necessary to protect revenue or enforce compliance, subject to applicable issuances and the controls set forth in this RMO.

III. RESPONSIBILITIES

• A. Mandatory Labels for Taxpayer Verification
  
  Upon effectivity of this RMO, audit and verification instruments may be issued and utilized by the BIR, strictly within their defined scope and limitations, and consistent with existing laws and revenue issuances, particularly RMO No. 6-2026, as amended. The following labels shall be prominently displayed on the audit/verification instruments:
  • a. Electronic Letter of Authority
    An eLA shall prominently bear the label:
    “FULL EXAMINATION OF BOOKS OF ACCOUNTS AND OTHER ACCOUNTING RECORDS”
  • b. Mission Order
    An MO shall prominently bear the label:
    “VERIFICATION, SURVEILLANCE, MONITORING, AND INSPECTION ACTIVITIES ONLY – LIMITED AUTHORITY”
  • c. Tax Verification Notice
    A TVN shall prominently bear the label:
    “VERIFICATION AUTHORITY – LIMITED SCOPE”
    
• B. System Controls and Responsibilities
  The Internal Revenue Integrated System – Case Management System – Audit (IRIS-CMS-A) Administration and the Information Systems Group (ISG), shall ensure that system controls governing the issuance and monitoring of audit authorities generated through IRIS-CMS-A, particularly eLA, are properly configured, maintained, and enforced in accordance with existing laws, rules, and revenue issuances.
  
  For eLAs, the IRIS-CMS-A Admistrator shall ensure that the system templates, mandatory fields, and validation controls require the inclusion of the following at a minimum:
  • a. The taxpayer’s name and Taxpayer Identification Number (TIN);
  • b. The tax types covered and the corresponding taxable period/s;
  • c. The assigned Revenue Officer/s (RO) and Group Supervisor/s (GS);
  • d. A mandatory system field requiring the issuing office to indicate the applicable legal basis under the National Internal Revenue Code of 1997, as amended (Tax Code), depending on whether the authority issued pertains to a regular audit or a tax fraud audit; and
  • e. The mandatory label prescribed under this RMO, which appears prominently on the face of the eLA and is correctly generated and reflected in IRIS-CMS-A.

For TVNs and MOs. which are governed by their respective issuance procedures under existing revenue issuances, the following controls shall be observed;

• a. The correct instrument type shall be clearly indicated;
• b. Every TVN shall specifically identify the exact transaction, declaration, or claim being verified;
• c. No language implying full audit or assessment authority shall appear in any TVN or MO; and
• d. The applicable mandatory labels and identifiers corresponding to each instrument shall be properly reflected in the issued document.

The responsibility of the ISG under this Section shall be configuration, maintenance, and integrity of system templates, mandatory fields, and validation controls in IRIS-CMS-A, without prejudice to the accountability of concerned offices and ROs for the accuracy, completeness, legality, and propriety of information encoded and authorities issued using such systems.

IV. SINGLE-INSTANCE AUDIT FRAMEWORK

The Single-Instance Audit Framework is the BIR’s new policy approach under which a taxpayer shall, as a general rule, be subject to only one eLA for a given taxable year, covering all applicable internal revenue tax types, including Value-Added Tax (VAT). The framework is intended to prevent overlapping or fragmented audits, provide clear and consistent audit authority, and promote fainess, transparency, and accountability in the conduct of tax audits. The issuance of multiple or overlapping eLAs covering the same taxpayer and taxable year is prohibited.

As an exception, however, in fraud cases, one eLA may cover several years in order to (i) determine or trace continuing transactions entered into the covered year and concluding thereafer, or those transactions concluded in the covered year that were commenced in prior years, or (ii) to establish that the same fraudulent scheme was utilized for prior or subsequent years (RMO No. 24-2008, as amended by RMO No. 27-2010).

A. Scope and Application of Single-Instance Audit Framework

• a. New audits initiated through the issuance of an eLA starting form the effectivity of this RMO.
• b. Audits resumed form suspension pursuant to RMC No. 107-2025, which are automatically consolidated into a single eLA for the same taxpayer and taxable year, in accordance with Section V hereof.
• c. Re-issued eLAs issued solely for the purpose of maintaining continuity of audit authority.

B. Exceptions to the Single-Instance Audit Framework

As an exception, a separate audit or verification authority may be issued for cases that are transactional, event-based, or terminal in nature, including but not limited to:

• a. One-Time Transactions (ONETT);
• b. Requests/Applications for tax clearance;
• c. Applications for cancellation of business registration, subject to the threshold amount under RMO No. 6-2023, as amended; and
• d. Cases with fraud and irregularity mentioned in RMO No. 24-2008, as amended by RMO No. 27-2010.

In no case shall these exceptions be used to fragment, bypass, or circumvent the regular audit of books of accounts and other accounting records for recurring internal revenue taxes.

Where finding arising from verification activities and conducted under an MO or a TVN indicate the need for a broader examination of tax liabilities, such examination shall be subject to the issuance of a separate eLA.

C. Finding of Fraud

Where, in the course of audit, verification, consolidation, or review under the Single-Instance Audit Framework, findings of fraud are established or reasonably indicated, all records, documents, and working papers relating to the affected eLAs shall be referred to the appropriate investigating office for further action.

For this purpose:

• a. Cases falling within regional jurisdiction shall be referred to the concerned Revenue Region’s Regional Investigation Division (RID)
• b. Cases falling within national jurisdiction, or those otherwise requiring national-level investigation, shall be referred to the National Investigation Division (NID).

Upon referral, the handling office shall cease further audit action on the affected eLAs, without prejudice to the issuance of a new eLA by the RID or NID, as may be appropriate, which may cover multiple taxable years, pursuant to RMO No. 24-2008, as amended by RMO No. 27-2010.

The policies and procedures in the consolidation of pending eLAs and issuance of new eLAs, among others, are specified in the Order.