RMO No. 22-2026: Prescribing the Consolidated and Revised Policies, Guidelines and Procedures for the Bureau of Internal Revenue Audit Program

Summary

RMO No. 22-2026 prescribes the consolidated and revised policies, guidelines and procedures for the BIR Audit Program, including general audit policies, Mandatory and Priority cases, and sanctions for violations.

Key points

1. General policies. Audits and verifications may proceed only with a valid electronic Letter of Authority (eLA), Tax Verification Notice (TVN) or Mission Order (MO), and any audit without one is unauthorized. A taxpayer is subject to only one eLA per taxable year covering all applicable tax types, under the Single-Instance Audit Framework of RMO No. 1-2026, as amended, subject to its exceptions. Audits are limited to the tax types and periods stated in the authority.
2. Selection and conduct. Authorities are generally issued through a system-assisted, risk-based taxpayer selection process, and cases are assigned through an anonymized process as far as practicable. All activities and findings must be recorded in the prescribed BIR systems and the case docket, with a complete audit trail.
3. Mandatory cases. These are cases where audit is needed before a tax clearance or before processing a refund or tax credit claim, or where the Commissioner identifies a primary target. They are covered by eLAs (selection codes such as FRD, TPI, MOS, OTT, INC, SEOI, TRC, TPR, VDF, ITR and ITC) or by TVNs for refund and credit claims. They need no prior CIR approval, but the Regional Director or the Assistant Commissioner of the Large Taxpayers Service must approve the classification. Taxpayers with tax exemptions or incentives (INC) are not automatically audited.
4. Refund and credit claims. For Income Tax refund or credit claims under Sections 58(E) and 76(C), the Investigating Office issues an eLA covering all internal revenue taxes for the same taxable period if none exists. A separate TVN is issued for creditable withholding tax claims to meet the 180-day period under Section 204(C) of the Tax Code, and it is not held up by the audit.
5. Priority cases. These are eLA cases electronically selected by the BIR system on risk-based criteria, with codes such as DIT, EZE, DNA, EIT, EIL, LOW, PERI, SNL, LST, ASS, CLD, PSA, CWO and EPA. Examples include a drastic decrease in reported sales, Income Tax due of less than two percent (2%) of gross sales or revenues, and more than five (5) years of operation without audit. Cases handled by the OAS under the AD are also covered.
6. Procedures and sanctions. The Order sets rules on eLA issuance and updating, case assignment, service, audit reports, assessments and the Final Decision on Disputed Assessment, protests, case monitoring in IRIS-CMS-A, replacement or consolidated eLAs, and audit of auditors. Violations such as unauthorized audit, misclassification, or failure to update case status are grounds for administrative sanctions, without prejudice to civil or criminal liability. Compliance forms part of the performance evaluation of the officers concerned.

Who is affected

• BIR Revenue Officials and Officers, Group Supervisors and Heads of Investigating Offices
• Taxpayers subject to audit or verification

Deadlines and effectivity

• Issued August 24, 2026
• Periodic report of Mandatory Case eLAs and TVNs: on or before the tenth (10th) day of the succeeding month

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