RMO No. 03-2003: Prescribes the guidelines and procedures in the conduct of inventory taking/stocktaking and verification of inventories covering taxable year 2002 by the Large Taxpayers Audit and Investigation Division (LTAID) I, LTAID II, Large Taxpayers District Office (LTDO)-Makati, LTDO-Cebu and Revenue District Offices

Key points

1. Who verifies. Verification is done by the Large Taxpayers Audit and Investigation Divisions (LTAID) I and II, the Large Taxpayers District Offices in Makati and Cebu, and the Revenue District Offices with jurisdiction. For a taxpayer with multiple branches, warehouses, bodegas or facilities, the office with jurisdiction over the head office conducts simultaneous stocktaking on all premises.
2. Authority and conduct. Verification is authorized by a Mission Order (BIR Form 0422) and a letter signed by the Assistant Commissioner, Large Taxpayers Service, or the concerned Regional Director. At least four (4) Revenue Officers take physical inventory immediately upon service of the Mission Order, without prior arrangement with the taxpayer.
3. Results. If the taxpayer agrees to findings that adjust sales or cost of sales, the Revenue Officer requires payment of the resulting deficiency taxes when the inventory-taking ends. This is without prejudice to issuing a Letter of Authority.
4. Refusal and approval of candidates. If a report cannot be made because the taxpayer refuses to give needed information, a Subpoena Duces Tecum is recommended under existing rules. The Commissioner approves the list of taxpayers for stocktaking before inventory-taking begins.

Who is affected

• Taxpayers selected for stocktaking, other than those subject to excise tax

Deadlines and effectivity

• Covers inventory lists for taxable year 2002
• Physical inventory begins immediately upon service of the Mission Order