RMC No. 75-2018: Highlights the mandatory statutory requirement and function of a Letter of Authority

Summary

RMC No. 75-2018 highlights that a Letter of Authority (LOA) is a mandatory statutory requirement and states its function, citing Medicard Philippines, Inc. vs. Commissioner of Internal Revenue (G.R. No. 222743, April 5, 2017).

Key points

1. LOA required. Under the Supreme Court ruling, no assessment or assessment function or proceeding may be done without prior approval and authorization of the CIR or his duly authorized representative through a LOA.
2. Assessment without LOA. A tax assessment issued without an LOA violates the taxpayer’s right to due process and is inescapably void.
3. Section 6 methods. Best evidence obtainable, inventory-taking and surveillance under Section 6 of the NIRC are simply methods of examining the taxpayer. Unless done by the CIR or his duly authorized representatives, other tax agents may not validly conduct them without prior authority.
4. Letter Notice. A Letter Notice is different from an LOA, is not found in the NIRC, and is not an authority to audit or examine the taxpayer. After it serves its purpose, the Revenue Officer must secure an LOA before further examination and assessment.
5. Sanctions. An Examiner or Revenue Officer who starts assessments or performs assessment functions without an LOA is subject to appropriate administrative sanctions.

Who is affected

• Examiners and Revenue Officers
• Taxpayers subject to assessment

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.