Have you experienced BIR tax examination? Many taxpayers are surprised as to why the BIR examines their books of accounts and other accounting records.
Actually, the Philippine Tax Code allows the BIR to examine all taxpayers in order to determine the correctness of taxes paid. However, inspection should be done only once per taxable year except for few cases where re-investigation is needed. The BIR may assess your records within 3 years from filing or within 10 years for cases of false, fraudulent return with intent to evade tax or failure to file a return.
Before the examination of your books of accounts, you must verify if you received a valid Letter of Authority (LOA). The LOA is an official document that empowers a revenue officer to examine accounting records of a taxpayer. But this must be served to you within 30 days from issuance, otherwise, it is null and void.
Taxpayers have several rights when being investigated, including the right to refuse the receipt of the LOA not served within the prescribed period unless revalidated. Further, the revenue officer should conduct the tax audit within 120 days from the date of receipt of LOA.
If someone is not aware of his rights as well as the procedures during tax investigation, there may be unreasonable and arbitrary tax assessments against you and you may be paying erroneous and excessive taxes.
Triple i’s tax lawyers and accountants can assist clients in all aspects of BIR tax examination, and ensure that your rights are highly protected to avoid being unjustly penalized.