BIR Orders Immediate Suspension of Audit Operations Under RMC 107-2025 

The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular No. 107-2025, directing the immediate suspension of all audit and field operations, including the issuance of Letters of Authority (LOA) and Mission Orders (MO). 

BIR Commissioner Charlito Martin R. Mendoza, who assumed office on November 13, emphasized the need to protect taxpayers and restore integrity within audit procedures. 

“No LOA or MO shall be created, printed, signed, or served during the suspension period,” Mendoza said. 

Finance Secretary Frederick D. Go supported the move, citing multiple complaints regarding the misuse of LOAs. 

What Exactly Did the BIR Suspend? 

Under RMC 107-2025, the suspension applies to all offices responsible for audit activities, including: 

• Large Taxpayers Service 
• Revenue Regions and District Offices 
• Assessment Divisions 
• VAT Audit Units 
• Intelligence and Special Audit Units 

This means no new LOAs or MOs can be issued or served until lifted. 

Are There Any Exceptions? 

Yes. Only urgent, legally mandated cases may continue: 

• Active criminal tax investigations 
• One-time transactions 
• Audits about to prescribe within six months 
• Refund claims requiring audit 
• Taxpayers flagged by verified intelligence reports 

These ensure legally time-sensitive cases are not jeopardized. 

Why Did the BIR Suspend LOAs?  

“What complaints triggered the suspension?” 

Businesses reported cases of excessive or questionable LOAs, including: 

• LOAs issued for previously settled taxable years 
• Combining multiple taxable years into one LOA 
• Manipulated assessments for “unofficial” settlements 
• Reports of extortion using LOAs 

“Is the LOA really required before an audit?” 

Yes. Under BIR Revenue Regulations No. 22-2020, an LOA is the official authority allowing a revenue officer to examine a taxpayer. 

“Is the LOA being used for harassment?” 

According to Senate testimonies, some businesses claimed they were pressured into paying unofficial taxes in exchange for “discounted” assessments. 

Senate Moves to Investigate LOA Misuse 

Senator Erwin T. Tulfo filed Senate Resolution No. 180, urging the Blue Ribbon Committee to investigate what he described as the “weaponization” of LOAs. 

He cited: 

• Reports of extortion 
• LOAs issued despite fully paid taxes 
• Abuse while public attention was focused on other issues 

Former BIR Commissioner Romeo D. Lumagui, Jr. and several examiners may be invited to testify. 

For optional reading, you may check: BIR to Review Audit Authorization Rules Amid Weaponization Claims 

BIR Forms Technical Working Group on LOA Integrity 

To strengthen internal controls, Commissioner Mendoza ordered the formation of a Technical Working Group (TWG) tasked with: 

• Reviewing LOA and MO protocols 
• Identifying systemic vulnerabilities 
• Recommending uniform audit standards 
• Integrating digital safeguards 
• Cleaning up audit trails and procedures 

At UNA Tax and Accounting Services a compliance-focused firm in Pasig we see this as a major step toward restoring trust and improving audit transparency for businesses and taxpayers. 

How Does the LOA Suspension Affect Businesses? 

Step-by-Step: What Should Taxpayers Do Now? 

1. Check if you have any ongoing BIR audits 

• If covered by the suspension, expect temporary delays. 

2. Review your tax filings for accuracy 

• Prevent potential issues once audits resume. 

3. Monitor BIR announcements 

• The suspension may be lifted anytime depending on reforms. 

4. Document all communication with BIR officers 

• Especially important if you previously received an LOA. 

5. Seek advice before responding to BIR notices 

• Missteps can lead to penalties once audits resume. 

Key Takeaways 

• The BIR suspended all audit operations and LOA/MO issuances under RMC 107-2025. 
• Only urgent and legislatively required cases are allowed to proceed. 
• The suspension follows complaints of extortion, harassment, and irregular LOA issuance. 
• A new Technical Working Group will overhaul LOA integrity protocols. 
• Businesses should stay alert, document all interactions, and seek expert guidance. 

Need Guidance on BIR Compliance or LOA Issues? 

At UNA Tax & Accounting Services, we help businesses navigate BIR regulations, understand audit procedures, and resolve LOA-related concerns with accuracy and compliance. 

Book your FREE 15-minute compliance consultation today. 
Visit our website to learn more about our tax advisory and audit support services.