The Philippines’ Bureau of Internal Revenue has lifted its suspension on tax audits and field operations, introducing new rules to make audits fairer, more predictable, and accountable.

The Philippines’ Bureau of Internal Revenue (BIR) announced on 27 January 2026, through Revenue Memorandum Circular (RMC) 8-2026, the lifting of the suspension on all tax audits and field operations that had been halted under an order issued in November 2025.

The announcement was accompanied by Revenue Memorandum Order (RMO) No. 1-2026, which prescribes revised policies, controls, and procedures for tax audits and assessments following the lifting of the suspension imposed under RMC 107-2025 last November.

The RMC directs the resumption of issuance of electronic Letters of Authority (eLAs), Mission Orders (MOs), and Tax Verification Notices (TVNs). It also mandates the continuation and completion of audit cases previously suspended, along with enforcement verification, assessment, and collection activities that require audit or field operations. Other audit or enforcement activities necessary to protect revenue or enforce compliance are also included. The RMC takes effect immediately and orders that all tax audits and field operations conducted after the resumption must comply with RMO 1-2026.

During a joint press conference of the Department of Finance (DOF) and the BIR, Finance Secretary Frederick Go, co-announcing with BIR Commissioner Charlito Martin R. Mendoza, said the lifting of the suspension follows a comprehensive review and engagement with the private sector to address concerns raised last year.

“The BIR has designed concrete reforms to make audits fairer, more predictable, and more accountable. These changes align with the administration’s big, bold reforms to improve the ease of doing business and strengthen trust in government,” said Secretary Go.

In a public-private consultation on audit reforms held on 21 January 2026, the BIR presented to the private-sector representatives of the BIR Partnership with Multisectoral Group (BIR-PMSG) the key features of the new guidelines under RMO 1-2026 that will govern all audit conduct. These reforms were well-received and supported by the private sector.

Key Features of RMO 1-2026:

  1. Clear Audit Authority: Proper labeling of taxpayer verification instruments—eLA, MO, or TVN—to avoid confusion.
  2. One LOA per Taxpayer per Year: The Single Instance Audit Framework allows only one eLA per taxpayer per taxable year for all applicable internal revenue tax types, including VAT, except in fraud cases. Taxpayers with multiple previously issued eLAs may request consolidation.
  3. Risk-Based, Data-Driven Selection: System-assisted audit selection uses risk-based criteria to generate anonymized lists of candidate taxpayers for audits.
  4. Abolished Task Forces: Previously created audit task forces are dissolved; their functions return to regular BIR offices.
  5. Shutdown of VAT Audit Sections: VAT Audit Sections (VATAS) and Large Taxpayers VAT Audit Units (LTVAU) are closed to rationalize audit authority.
  6. Fair and Proper Assessments: Revenue officers must not issue unreasonable assessments; audit notices must clearly state unresolved issues with factual and legal bases, including applicable laws and jurisprudence.
  7. Standardized Documentation: Mandatory use of audit checklists, proper documentation of audit events and taxpayer interactions, and signed minutes by both taxpayer and officer.
  8. Flexible Record Examination: Examination of books of accounts may occur at the taxpayer’s office, designated business place, or BIR office. Reasonable options are given for handling voluminous records to prevent undue burden or disruption.

Commissioner Mendoza emphasized that audit reforms are part of the BIR D.A.R.E.S. initiative, the Bureau’s five-point reform and legacy agenda, with audit reform being a key pillar.

“We deliberately framed BIR DARES not only as reform work, but as legacy work—work that is meant to endure beyond immediate fixes and beyond any single term of leadership. These are reforms we intend to institutionalize, embed in systems and processes, and carry forward so that they last. Audit reform, therefore, is one pillar of a broader, lasting transformation,” Mendoza said.

BIR D.A.R.E.S. stands for Digital and Data Transformation, Audit Reform and Accountability, Revenue Collection and Base Protection, Employee Empowerment and Welfare Promotion, and Service Excellence and Stakeholder Engagement.