RMO No. 7-2020: Prescribes the policies and guidelines in the audit/investigation of cooperatives

Summary

RMO No. 7-2020, issued February 18, 2020, prescribes policies and guidelines for the audit and investigation of cooperatives for taxable years 2018 onwards.

Key points

1. Audit priority. Revenue District Offices prioritize cooperatives that transact with both members and non-members and have accumulated reserves and undivided net savings of more than Ten Million Pesos (₱ 10,000,000.00). Cooperatives with income unrelated to the main business under their Articles of Incorporation are also prioritized.
2. Workload cap. The maximum workload of thirty (30) cases per Revenue Officer does not apply to cooperative audits.
3. Electronic Letters of Authority. The Electronic Letter of Authority Monitoring System (eLAMS) is used to request, approve and issue eLAs and to report their accomplishments.
4. Monthly reports. Revenue District Officers submit the List of Cooperatives with eLAs Issued (Annex A) and the Monthly Summary of Accomplishment on Audit of Cooperatives (Annex B). These go to the Assistant Commissioner – Assessment Service, Attention: Chief, Audit Information Tax Exemption & Incentives Division, at aiteid@bir.gov.ph, not later than the 10th day of each month.

Who is affected

• Cooperatives transacting with both members and non-members
• Revenue District Offices and Revenue District Officers

Deadlines and effectivity

• Applies to taxable years 2018 onwards
• Monthly reports: not later than the 10th day of each month

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