Discussions

Who are the priority in the Audit of BIR?

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.