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BIR Tax Audit Process Guide

This document outlines the tax assessment process between the Bureau of Internal Revenue (BIR) and taxpayers in the Philippines. It begins with the BIR notifying the taxpayer of a tax examination and preliminary findings. The taxpayer is then invited to an informal conference to discuss these findings. If an agreement is not reached, the BIR issues a Preliminary Assessment Notice and the taxpayer has 15 days to respond. If still in disagreement, the BIR issues a Final Assessment Notice and demand for payment, which the taxpayer can administratively protest within 30 days. Otherwise, the assessment becomes final. The process also describes options for appeal if the protest is denied.

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Maria Reylan Garcia
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3K views4 pages

BIR Tax Audit Process Guide

This document outlines the tax assessment process between the Bureau of Internal Revenue (BIR) and taxpayers in the Philippines. It begins with the BIR notifying the taxpayer of a tax examination and preliminary findings. The taxpayer is then invited to an informal conference to discuss these findings. If an agreement is not reached, the BIR issues a Preliminary Assessment Notice and the taxpayer has 15 days to respond. If still in disagreement, the BIR issues a Final Assessment Notice and demand for payment, which the taxpayer can administratively protest within 30 days. Otherwise, the assessment becomes final. The process also describes options for appeal if the protest is denied.

Uploaded by

Maria Reylan Garcia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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LETTER OF AUTHORITY

Informs the taxpayer that the Bureau of


Internal Revenue is authorized to
examine its books for a certain taxable
year.

PRELIMINARY
FINDINGS
Initial computations
by the Revenue
Officer

NOTICE OF INFORMAL
CONFERENCE
Taxpayer
- Informs the taxpayer of the
Failed
preliminary findings of the revenue to Reply
examiner
-invites the taxpayer or its
representative for a conference with
the examiner within 10 to 15 days
from receipt of the letter

BIR
BIR &
& T
Taxpayer
axpayer come
come
to an agreement?

YES

BIR accepts the explanation of the


taxpayer assessment
process/payment by TP. Assessment
process ends.

Exceptions to Notice of Informal Conference and PAN (Issuance of


FAN is sufficient)
1. The finding for any deficiency tax is the result of mathematical error in
the tax computation appearing on the face of the tax return filed by
the taxpayer;
2. A discrepancy has been determined between the tax withheld and the
amount actually remitted by the withholding agent;
3. A taxpayer who opted to claim a refund or tax credit of excess CWT for
a taxable period was determined to have carried over and
automatically applied the same amount claimed against the estimated
tax liabilities for the taxable quarter/s of the succeeding taxable year;
4. Excise tax due on excisable articles has not been paid;
5. An article purchased locally or imported by an exempt person, such as,
but not limited to, vehicles, capital equipment, machineries & spare

PRELIMINARY ASSESSMENT NOTICE


- Notifies the taxpayer of the findings
made by the examiner and the
deficiency taxes assessed
- Shows in detail, the facts and the law,
rules and regulations, or jurisprudence
on which the proposed assessment is
based.
-Time for taxpayer to respond: 15 days

YES

Commissioner
accepts the
explanations

Commissioner
does NOT accept the
explanations

Taxpayer submits a
REPLY w/n 15 days?

END

of
proceedings.

2 Types of Administrative Protest Against the FAN


Request for reconsideration refers to a plea of
reevaluation of the assessment on the basis of existing
records without need of additional evidence. It may
involve a question of fact or law, or both.
Request for reinvestigation refers to a plea of
reevaluation of an assessment on the basis of newly
discovered or additional evidence that a taxpayer intends
to present in the reinvestigation. . It may involve a

FAN & LETTER OF DEMAND


- Sent to the taxpayer only by registered mail or
personal delivery.
- If sent by personal delivery, taxpayer or his
authorized representative shall acknowledge
receipt in the 2nd copy of the letter of demand
showing: (a) name, (b) signature, (c) designation &
authority to ac t for & in behalf of the taxpayer, (d)
date of receipt

NO

YES

Taxpayer responds within 30


days?

END

Assessment becomes final, executory, and


demandable
The government may exercise it remedies
for collection
The case may not be appealed at the CTA

Action of the
Commissioner

Resolution of the
assessment based on
the documents:
- Cancellation of the
entire assessment or
- Issuance of a Revised
Assessment

Inaction of the
Commissioner on the
protest within 180
days from the time of
receipt of the relevant
documents

Denial by the
administrative protest
within 180 days from
the receipt of the
relevant supporting
documents

TP fails to appeal
Appeal to the COURT OF TAX
APPEALS
must be made within 30 days from the
denial but in any case within 30 days
from the lapse of the 180 days

TP accepts the Court


of Tax Appeals
decision

TP accepts the Court of Appeals


decision

Appeal to the COURT OF


APPEALS

Appeal to the SUPREME COURT

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