BIR clarifies lifting of suspension of investigation of RATE cases

After suspending all field audit and other field operations of the Bureau of Internal Revenue (BIR) upon his assumption to office in July 1, 2016, Commissioner of Internal Revenue Caesar R. Dulay has directed all internal revenue officers to pursue the investigation / audit of Run After Tax Evaders (RATE) cases through Revenue Memorandum Circular (RMC) No. 89-2016.

Issued last August 23, 2016, the Circular announced the lifting of the suspension of the implementation of Letters of Authority (LOA) pertaining to the RATE Program. Thus, field audits, field operations, any form of business visitations and all activities connected directly in the implementation of LOAs pertaining to RATE cases shall be resumed, continued or conducted in accordance with existing Rules and Regulations of the BIR.

The lifting is 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.

Commissioner of Internal Revenue Caesar R. Dulay allayed fears of the taxpaying public that the lifting of the ban on the investigation of tax cases will give revenue field men the opportunity to harass them and to continue their old practices by saying that the BIR has, and has in fact shown, that it has the means to safeguard the rights of taxpayers and the mechanism to discipline erring revenue officers and employees.

He thus encouraged all taxpayers being investigated 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, the BIR Customer Assistance Division at 981-8888, and the Civil Service Commission's Contact Center ng Bayan - email at and telephone numbers at (02) 9512575 / 76 . It can be remembered that three (3) tax examiners were charged with grave misconduct and are now undergoing administrative dismissal proceedings stemming from a complaint filed by a certain taxpayer with the office of Commissioner Dulay - who personally ordered and monitored the investigation of the complaint. This July 2016 alone, he approved the imposition of penalties on nineteen (19) erring revenue personnel, including eight (8) dismissals from the revenue service.

The Office of the Commissioner is also looking into cases of questionable tax audits which were uncovered in the process of implementing Revenue Memorandum No. 70-2016 which suspended all field audit and investigation of taxpayers. Further, the investigation of hundreds of tax examiners with long outstanding and unreported LOAs covering the audit of certain taxpayers for certain taxable years is ongoing to ensure that audits are done according to existing laws and regulations, protect taxpayers from questionable delays in the process and sanction erring tax examiners.

He further hinted that the BIR will soon resume its regular audit / investigation of tax cases to ensure that taxpayers are paying their correct taxes. To ensure transparency and fairness, the BIR will use tools, including risk-based analysis and benchmarking, to come out with an audit program that will prioritize the audit of certain taxpayers/sectors/industries perceived to be non-compliant.

Source: Philippine Information Agency

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