A BIR Audit or the audit program of BIR is the process of examining the correct and regular collection of taxes. This is done by district offices and regional offices to ensure that taxpayers are and have paid for the correct and regular taxes.
A BIR Audit begins as soon as a taxpayer receives a written authorization in form of Letter of Authority (LA), letter Notice (LN), Tax Verification Notice (TVN), or Electronic Letter of Authority (eLA). The actual audit of the books of account follows. After, there will be an informal conference between the taxpayer and BIR. If the taxpayer fails to attend the conference, a Preliminary Assessment Notice (PAN) would be issued. He/she would be given 15 days to respond. If the allegations weren’t cleared out and if explanations are not acceptable as stated on the PAN, a formal Letter of Demand and Assessment Notice would be issued.
A taxpayer has rights and remedies in order to controvert BIR’s findings. One is to file a position paper and protest against the PAN and FAN respectively to rebut the assessment. This is to be filed within 15 days upon receiving the PAN. The taxpayer could also request for reconsideration or request for reinvestigation within 30 days upon receiving the FAN. The assessment is deemed final and executory if the taxpayer fails to file a protest. Having said that, a taxpayer should be responsible for filing his protest or request within the given terms and deadlines. Also, he/she should follow the stages in the process for the audit procedure not to be delayed.
There could also be cases when concerns are elevated to the Court. One is when Commissioner or duly authorized representative, within 180 days from submission of documents, fails to act on the taxpayer’s protest. The appeal should be done within 30 days from the 180-day period. Another case is when BIR denies the protest. The appeal to the Court of Tax Appeals must be done within 30 days upon receiving BIR’s decision.
A BIR Audit isn’t just any other state process because it involves your responsibility as a taxpayer. Unless you resorted to tax evasion, you would need not to worry on a BIR Audit as long as you follow the processes.
If you want to learn more about BIR Audit, join Mr. Ruperto Somera, former Director of Bureau of Internal Revenue, as he talks about “Top Secrets of Handling BIR Audit”. This event is set to happen on September 29, 2017, at the RCBC Plaza Makati.
For more information, visit https://powermaxph.com/new/.