The Bureau of Internal Revenue (BIR) under Revenue Memorandum Order No. 4-2013 dated March 8, 2013, issued policies and guidelines that shall be observed in the continuing audit of tax returns by the Revenue District Offices:
1) ALL TAXPAYERS are considered as possible candidates for audit.
2) Priority shall be given to the following taxpayers:
a.) Professionals and sole proprietorships whose –
* income tax due is less than two hundred thousand pesos (P200,000) per year;
* gross revenue is less than forty percent (40%) compared to the previous year’s reported gross revenue;
* tax payment for each type is less than thirty -five percent (35%) as compared to the previous year’s tax payment;
b) Those engaged in but not limited to the industries as follows:
* Importers/manufacturers/wholesalers/retailers of wrist watches and jewelry.
* Petroleum / gasoline dealers.
* Hotels, motels, pension houses/lodging, houses/inns, dormitories/boarding houses.
* Real estate Industry.
* Schools, particularly for foreigners (e.g. English School for Koreans, review centers).
* Contractors of NGA’S LGU’S and government owned and controlled corporations.
* Retailers / Wholesalers.
* Restaurants, fast food chains, catering services, bars, coffee shops.
* Hospitals, clinics, medical/dental laboratories.
* Establishments / clinics for beauty enhancement centers.
* Manufacturers /dealers of beauty and health supplements.
* Amusement / entertainment / event centers.
* Advertising agencies.
* Business processing outsourcing (BPO).
* E-commerce industry.
* Manpower and other recruitment services agencies.
* Other peculiar to the area of jurisdiction of the district office.
c) Those who fall below the established benchmarks of tax compliance; and
d) Those who maintained an ending inventory with value of 100% or more of it’s gross sales.
RGA CPAs and Associates 