Letter of Authority (LOA) / eLOA with Audit Checklist

LOA - an official document that authorizes a revenue officer to examine and scrutinize a taxpayer's books of accounts and other accounting records, in order to determine
the taxpayer's correct internal revenue tax liabilities (Sec. 13, NIRC)

eLOA - an electronic LoA issued by the BIR to examine the books and records of a taxpayer for a particular taxable period. The eLA is electronically generated and its
issuance is through the electronic Letter of Authority Monitoring System

Note, that despite the designation of “electronic” in the term ‘eLA’, serving BIR letters or notices through electronic mail is not one of the valid modes of service.

See checklist

* LOA must be issued, otherwise the assessment is void.

* LOA must be served to taxpayer within 30 days from issue date. otherwise it becomes null and void. Taxpayer then has a right to refuse the service of LOA, unless
it is revalidated.
* Frequency of revalidation:
1. only once, if issued by the Regional Director (RD)
2. twice, if issued by the Commissioner of Internal Revenue (CIR)
* LOA should cover one taxable year.
* LOA should indicate the date and time of printing.

Who are authorized representatives

1. President
2. Vice-President
3. Other principal officers
4. Others duly authorized through a secretary's certificate or special power of attorney

NEW DEVELOPMENTS
* Recently, the BIR issued Revenue Memorandum Circular (RMC) No. 82-2022, which removed the requirement for the BIR to serve the LoA to the taxpayer within
30 days from issuance.

Waiver of statute of limitations - an agreement between the taxpayer and the BIR to extend the period for the issuance of an assessment beyond the 3-year period
prescribed by law. (Sec. 223, 1997 NIRC)

* The taxpayer is charged with the burden of ensuring that the waivers are validly executed by its authorized representatives.

Requisites of a valid waiver

1. Executed before the expiration of the period to assess taxes. The date of execution shall specifically be indicated in the waiver.
2. Signed by the taxpayer himself or his duly authorized representative.
3. The expiry date of the period agreed upon to assess the tax should be indicated.

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