Jimmy Saberon
MANILA — The Bureau of Internal Revenue (BIR) has filed cases against 25 of its personnel for the alleged misuse of Letters of Authority (LOAs), while 30 more employees are under investigation, Commissioner Atty. Charlie Martin Mendoza told the Senate blue ribbon committee on Tuesday.
Mendoza said the cases stem from alleged abuses in the issuance and use of LOAs, which authorize revenue officers to examine taxpayers’ books and records for a specific period as part of audit and investigation procedures.
He warned that BIR personnel who violate existing rules and new guidelines on LOA issuance may face administrative, civil, or criminal liabilities, depending on the gravity of the offense.
“Maliwanag po na nakalagay sa aming Revenue Memorandum Orders na ang mga kawani ng BIR na hindi susunod sa mga panuntunan ay mananagot,” Mendoza told senators.
The commissioner was referring to Revenue Memorandum Orders (RMOs) 1-2026 and 8-2026, which lifted the earlier suspension of audit operations while introducing stricter controls on LOA issuance.
Under the new rules, the BIR has limited the issuance of LOAs to one letter per taxpayer per taxable year. Mendoza said LOAs will now be system-generated to reduce human intervention and prevent possible abuse.
To avoid overlapping audits, the BIR also shut down its Value-Added Tax (VAT) audit section and VAT audit teams, centralizing the authority to conduct audits under regional offices and the Large Taxpayers Service.
When asked whether erring employees could be dismissed from service, Mendoza said dismissal remains a possible penalty, particularly if evidence establishes the commission of a serious offense.
Aside from filing cases, Mendoza said the agency has begun reshuffling personnel in several Revenue District Offices (RDOs), with additional movements expected in the coming weeks as part of internal reforms.
The BIR initially suspended its audit operations in November 2025 following allegations from local and foreign business groups that some revenue officers used LOAs to pressure taxpayers into paying “discounted” amounts to avoid allegedly inflated tax assessments.
Mendoza said the reforms aim to restore public confidence in the agency’s audit process and ensure that LOAs are used strictly for their intended purpose, consistent with the BIR’s mandate to enforce tax laws fairly and transparently.
