BIR tightens issuance of Letters of Authority to investigate RATE cases

QUEZON CITY, 05 September 2016 – After lifting the suspension of the implementation
of Letters of Authority pertaining to the Run After tax Evaders (RATE) Program, Commissioner
of Internal Revenue Caesar R. Dulay issued Revenue Memorandum Order (RMO) No. 57-2016
requiring the revalidation of all outstanding Letters of Authority issued under the program.

The Order states that “In view of the policy to strictly monitor existing tax
investigations/audits and reporting on cases under the RATE Program, all outstanding Letters of
Authority (LA), for which no Preliminary Assessments/Final Assessments have been issued or no
cases have been filed with the Department of Justice or the Courts as of June 30, 2016, shall be
submitted to the Commissioner for special revalidation.”

Under the scheme, new LAs shall be issued under the name/s of the investigating
officer/s to whom the same are assigned/re-assigned. The new LAs will be issued only if the
request for special revalidation is justified and supported by progress reports on the cases
covered.

The issuance stresses that subject to the exceptions provided therein, no investigation
shall be commenced without the revalidated LA.

Previously, the BIR issued Revenue Memorandum Circular (RMC) No. 89-2016 lifting the
suspension of the implementation of Letters of Authority (LOA) pertaining to the RATE Program
which paved the way for the resumption, continuation or conduct of field audits, field
operations, any form of business visitations and all activities connected directly to RATE cases.

The lifting was intended to continue the mandate of the BIR to investigate criminal
violations of the Tax Code and to prosecute cases to deter, to the greatest possible degree, tax
evasion practices and to encourage voluntary compliance. It strikes a balance between the BIR’s
mandate to collect taxes and the taxpayers’ duty to pay the correct amount of taxes. Studies
show that field audits and related activities deter unscrupulous tax dodging practices and
enhances voluntary compliance in the payment of the correct amount of taxes.

Taxpayers being investigated are encouraged to report any corrupt activities, or any hint
or insinuation of the same, on the part of revenue examiners using all available means,
including the social media, the President’s 8888 hotline, the BIR eComplaint System at
www.bir.gov.ph, the BIR Customer Assistance Division at 981-8888, and the Civil Service
Commission’s Contact Center ng Bayan – email at email@contactcenterngbayan.gov.ph and
telephone numbers at (02) 9512575 / 76 . (reytdlc)
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FOR THE COMMISSIONER OF INTERNAL REVENUE:

(original signed)
Approved for release: GAUDENCIO A. MENDOZA, JR., Chief Legal Counsel, Office of the Commissioner of Internal Revenue

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