You received a BIR Letter of Authority. What should you do?

Verify the LOA names the officers and one taxable year, then meet every reply period: five days for a Notice of Discrepancy, 15 for a PAN, 30 to protest a FAN.

Ask for the Letter of Authority and read it before handing over a single receipt. Check that it names the officers in front of you and one taxable year. An examination without a valid LOA is void (Medicard Philippines, Inc. v. CIR, G.R. No. 222743, 5 April 2017). Then calendar the reply periods: five days to respond to a Notice of Discrepancy, fifteen to answer a Preliminary Assessment Notice, thirty to protest a Final Assessment Notice. The first two are your best chance to end this early; miss the third and the assessment becomes final, executory and demandable, however strong your case.

Picture a hardware store owner along Quimpo Boulevard. Two men leave a folded document with her cashier, who signs the receiving copy, does not write the date, and slides it into the drawer under the paper bags. Three months later a Notice of Discrepancy arrives asking her to appear within five days. By then nobody can say when the first envelope came, and two years of purchase invoices have gone to officers whose names were not on the paper.

A BIR audit is a sequence of documents, and each starts a clock.

What a Letter of Authority actually is

Section 6 of the National Internal Revenue Code lets the Commissioner, or a duly authorized representative, authorize the examination of a taxpayer. The LOA is that authorization in writing. Without it, a revenue officer has no power to look at your books.

The Supreme Court has been strict. In Medicard it held that an assessment issued without an LOA violates due process and is "inescapably void." In CIR v. Sony Philippines, Inc., G.R. No. 178697, 17 November 2010, an LOA covering "1997 and unverified prior years" could not support a deficiency VAT assessment built on January-to-March 1998 records, because the LOA did not cover that period. The phrase "unverified prior years" was a separate defect: Revenue Memorandum Order No. 43-90 prohibits it and requires an LOA to cover a taxable period not exceeding one taxable year.

The names matter as much as the year. In CIR v. McDonald's Philippines Realty Corp., G.R. No. 242670, 10 May 2021, the officer named in the LOA was reassigned and a replacement continued the audit without an amended LOA. The Court voided the assessment: naming the authorized revenue officers is a jurisdictional requirement of a valid audit.

One caution: the thirty-day deadline for serving an LOA is gone. Revenue Audit Memorandum Order No. 1-2000, as amended by RAMO No. 1-2020, dropped it, and Revenue Memorandum Circular No. 82-2022 confirmed that an eLOA served beyond that window is still valid, so late service alone is no longer the argument it was. What survives is the audit period: 180 days from issuance of the eLOA for district cases, 240 days for large taxpayer cases.

A Letter Notice or Mission Order is not an LOA

This is where many businesses give away their case. A Letter Notice is computer-generated advice that the BIR's matching system found a gap between your declarations and third-party data. Medicard settled that it is not an LOA and cannot take one's place. A Mission Order, used for surveillance and similar field work, serves another purpose.

You received a BIR Letter of Authority. What should you do?

What a Letter of Authority actually is

A Letter Notice or Mission Order is not an LOA

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