The Court of Tax Appeals (CTA) has affirmed the authority of the commissioner of Bureau of Internal Revenue (BR) and duly-authorized representatives to issue letter of authority (LA) to examine the financial statements of taxpayers.
The court's Special Second Division dismissed the separate petitions filed by four construction companies and an individual taxpayers, all based in Pasig City, to void the LAs sent to them as the basis of audit, or the annual audit program was not reflected in the document as specified under Revenue Memorandum Order 44-2010 and Revenue Administrative Order 7-2014.
The petitioners said the absence of the audit program in the LA was tantamount to "abuse of discretion."
In a 36-page resolution, the court stated that the issuances are no longer required for the issuance of LA under Revenue Memorandum Circular 006-13.
Associate Justice Lanee S. Cui-David, who wrote the decision and former revenue deputy commissioner, noted that Revenue Memorandum Order 19-2015 prescribes the audit procedures which need not be indicated in the LA.
The court agreed with the BIR's contention that the filing of the complaints were premature and speculative as no assessment has yet been conducted.
In issuing LAs, David added the BIR is doing its job under the Tax Code to make assessment and enforce the collection of taxes.
The petitioners were St. Timothy Construction, St. Matthew General Contractor and Development, Alpha and Omega Contractor and Development, St. Gerard Construction and General Contractor and Pacific F. Discaya II.