Wrong audit causes BIR to lose P43 million
Published Oct 14, 2019 11:52 am
By Jun RamirezÂ
CEBU CITY – The Court of Tax Appeals (CTA) has canceled the Bureau of Internal Revenue's (BIR) P43-million deficiency tax assessments against a big merchandising company based here for using an audit procedure not mentioned in the tax laws.
Bureau of Internal Revenue (MANILA BULLETIN)
The court's Second Division noted the BIR did not issue Letter of Authority (LOA) to Tridharma Marketing Corporation as required in the Tax Code, but Letter of Notice (LN).
It said the LN serves a different purpose using computer or third party in determining purchase and sale claims of the taxpayers.
The LN sent to Tridharma established the alleged discrepancy between the data supplied by the Bureau of Customs, and its declared tax payments for the year 2009.
The court said the LN should had been changed with LOA before proceeding with the further investigation as provided under Revenue Memorandum Order No. 32-2005.
"Considering the audit was based on LN, the subject assessment against the petitioner (Tridharma) for deficiency income and value-added taxes and compromise penalty are void for lack of authority," said Associate Justice Cielito Mendaro-Grulla who penned the decision.
Bureau of Internal Revenue (MANILA BULLETIN)
The court's Second Division noted the BIR did not issue Letter of Authority (LOA) to Tridharma Marketing Corporation as required in the Tax Code, but Letter of Notice (LN).
It said the LN serves a different purpose using computer or third party in determining purchase and sale claims of the taxpayers.
The LN sent to Tridharma established the alleged discrepancy between the data supplied by the Bureau of Customs, and its declared tax payments for the year 2009.
The court said the LN should had been changed with LOA before proceeding with the further investigation as provided under Revenue Memorandum Order No. 32-2005.
"Considering the audit was based on LN, the subject assessment against the petitioner (Tridharma) for deficiency income and value-added taxes and compromise penalty are void for lack of authority," said Associate Justice Cielito Mendaro-Grulla who penned the decision.