Organization

and
Functions of the BIR
Title I, National Internal Revenue Code of 1997
RA 8424, as amended by TRAIN LAW (RA 10963), and
CREATE LAW (RA 11534)
Christopher de Guzman, CPA, CAT
Organization of BIR –
• BIR under supervision and control of DOF;
• Headed by BIR Commissioner;
• Assisted by 6 Deputy Commissioner (EO No. 132,
10/26/93;
• Each Deputy is assisted by 14 Assistant
Commissioners.
Powers and Duties of BIR –
• Assessment and collection of national internal revenue
taxes, fees and charges;
• Enforcement of all forfeitures, penalties, and fines;
• Execution of judgements;
●ACE-X
• Give effect to and administer the supervisory and police
powers conferred by law;
Powers of the Commissioner –
1. Interpret tax laws, and decide tax cases (Sec. 4);
● Interpretative rules - subject to review by the Secretary of Finance;
● Tax Cases – subject to appeal before the CTA.

2. Obtain information, summon, examine and take testimony of persons; to

canvass through revenue officers and employees (Sec. 5);
● Inquiry on taxpayer and third parties;
● Except bank deposits subject to exemptions;
● Requirement for CDA – tax incentive report;

3. Make assessment and prescribe additional requirements for tax

administration and enforcement (Sec. 6);
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A. Examination of returns and determination of tax due;
● Whether with or without a filing of return;
● Tax assessed or deficiency shall be paid upon notice and demand;
● Non-withdrawal of return;
● Amendments within 3 years from the date of filing provided no receipt of notice of audit or
investigation is received;
B. Failure to submit required returns, statements, reports or other documents;
● “Best Evidence Obtainable”
● “Prima Facie Correct”
C. Inventory taking, surveillance, presumptive gross sales and
receipts;

D. Terminate taxable period (Jeopardy Assessment)

BIR Letter of Authority

“Clearly, there must be a grant of authority before any

revenue officer can conduct an examination or assessment.
Equally important is that revenue officer so authorized
must not go beyond the authority given. In the absence of
such a authority, the assessment or examination is a
nullity.”
(Commissioner of Internal Revenue vs. Sony Philippines,
Inc., GR No. 178697, 11/17, 2010)
Jeopardy Assessment, When Proper
Taxpayer is retiring from business subject to tax; or
Intending to leave the Philippines; or
To remove his property therefrom; or
To hide or conceal his property; or
Is performing any act tending to obstruct the proceedings for the
collection of the tax for the past or current quarter or year; or
To render the same totally or partly ineffective unless such
proceedings are begun immediately…
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E. Set the real property values;
● Mandatory consultation with the taxpayers affected;
● Conditions: (1) adjusted once every three years; (2) publication; or posting; (3) make the
records of consultation and basis of any valuation available to the public for inquiry;
● Basis of tax: Higher amount between assessed value or zonal value.

F. Inquire into bank deposit accounts and other related information from
financial institutions;
● Gross estate determination;
● Compromise with waiver of the taxpayer;
● Request of tax information from a foreign tax authority (treaty)

G. Accredit and register tax agents;

● Appealable to the Secretary of Finance who shall rule within sixty days from the filing
of appeal, otherwise, accreditation of tax agents is deemed approved.
Request by a foreign tax authority –
• The taxpayer must be notified in writing by the Commissioner
within 60 days following his transmittal of all the information
requested from, and provided for by, the concerned financial
institution to the requesting treaty partner. (RR # 10-2018)
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H. Prescribe additional procedural or documentary requirements;
● Specifically, submission of financial statements to be attached to ITR;

● Required to submit FS certified by CPA – those with gross annual sales, receipts or
output exceeding 3,000,000 (Sec. 232A of Tax Code).

● Books of Accounts shall be maintained, kept, and preserved (Sec. 232 – 235 of Tax
Code).
Power of the Commissioner

4. The power to delegate his functions to subordinate official with the rank
equivalent to a division chief or higher, except
● Power to recommend rules and regulations;
● Power to issue rulings of first impression, or to reverse, revoke or modify any
existing ruling;
● Power to compromise or abate except when the deficiency taxes is P 500,000 or
less, and minor criminal violations;
● Power to assign or reassign officers to establishments where articles subject to
excise tax are produced or kept.

5. Ensure the provision and distribution of forms, receipts, certificates and

appliances, and the acknowledgement of payment of taxes
Duties of Revenue Officers
• Ensure that all laws, and rules and regulations affecting national
internal revenue are faithfully executed and complied with, and to
aid in the prevention, detection and punishment of frauds or
delinquencies in connection therewith.
 Agents and Deputies for Collection
1. Commissioner of Customs and his subordinates – tax on imported
goods;

2. Head of the appropriate government office and his subordinates –

energy tax;

3. Duly accredited banks

Authorized Agent Bank
• Any officer or employee of an authorized agent bank assigned to receive
internal revenue tax payments and transmit tax returns or documents to
the BIR shall be subject to the same sanctions and penalties prescribed
in Sec. 269 and 270 of this Code (Sec. 12)
Sec. 269 and 270
Authorities of Revenue Officers
• Examine taxpayers within the jurisdiction of the district, provided with
LOA signed by the Revenue Regional Director.

• Administer oaths and to take testimony in any official manner or

investigation conducted by them regarding any matters within the
jurisdiction of the Bureau;

• Arrest and seize taxpayers for the violation of any penal law, rule or
regulation administered by the Bureau of Internal Revenue.

• Report of violation of laws.

Assignment of Internal Revenue Officers
●Excise tax functions – shall not exceed 2 years;
●Assessment or collection function – shall not exceed 3
years;
●Special duties – shall not exceed 1 year
Sources of NIR Taxes
●Income tax
●Transfer tax
●VAT
●Other percentage tax
●Excise tax on certain goods and services
●Doc stamps
●Others
Reference:
• NIRC of the Philippines by Dascil 2020 Edition

• Tax Code of the Philippines