RMO No. 19-2009: Prescribes the 2009 Audit Program for Revenue District Offices

Key points

1. Coverage of the program. The program covers audit of 2009 internal revenue tax returns, including those of fiscal period taxpayers whose taxable year ended on July 31, 2008 up to June 30, 2009.
2. Mandatory cases. These include income tax refund, tax credit or excess carry-over claims above P100,000.00 with gross sales or receipts thresholds of P10,000,000.00 (Revenue Region Nos. 5, 6, 7 and 8, except RDO Nos. 35, 36 and 37) or P5,000,000.00 (other regions), and VAT refund or excess input tax claims above P100,000.00. Estate tax returns above set thresholds and tax clearance requests for retirement, merger or reorganization above P10,000,000.00 also fall here.
3. Priority and discretionary selection. Top priority taxpayers are listed by industry, such as hospitals, call centers, restaurants, construction companies, lessors, real estate dealers and developers, and cooperatives, with gross sales or receipts above P5,000,000.00 or P3,000,000.00 depending on the region. Other priority groups include taxpayers filing No Operations returns, those with low tax due, those reporting net loss, and Top 20,000 private corporations. The RDO may add other taxpayers, up to 25% of the total number to be audited, not counting mandatory cases.
4. When TVNs are issued. TVNs are issued only for cases below the threshold, excise tax refund or credit claims, claims on erroneous or double payment of taxes regardless of amount, retiring or reorganizing taxpayers with gross assets of P1,000,000.00 up to P10,000,000.00, and protested or reinvestigation cases.
5. Rules on Letters of Authority. The Regional Director prepares, approves and signs LAs, and needs the Commissioner’s prior written approval to issue one outside the selection criteria. One LA or TVN is issued per taxable year or period covering all internal revenue tax liabilities, and the same Revenue Officer or Group Supervisor may not examine the same taxpayer for the next succeeding period, subject to stated exceptions.
6. Other procedures and deadline. Action on Subpoena Duces Tecum cases must be taken within 15 days from receipt of the docket. The RDO transmits duplicate copies of tax returns not selected for audit to the Assessment Division not later than August 31, 2009, as the basis for selection under the Office Audit Program in RMO No. 13-2009.

Who is affected

• Revenue District Offices
• Regional Directors
• Taxpayers selected for audit

Deadlines and effectivity

• Issued June 4, 2009
• Covers 2009 returns and fiscal years ended July 31, 2008 to June 30, 2009
• Unselected returns to Assessment Division by August 31, 2009