Days after Commissioner Ceasar Dulay was appointed; he already signed a Revenue Memorandum Circular (RMC) 70-2016 which suspends (until further notice) the field audit, field operations and visitations concerning Letters of Authority, Letter Notices and Mission Orders. This circular was further clarified by issuing RMC 75-2016 and RMC 85-2016.
The former is issued to further clarify the exceptions to the rule of suspension. One of these is the prescribing cases for taxable year 2013 where it vividly informed taxpayers that those who are audited for taxable year 2013 are not suspended Letters of Authority.
The latter on the other on the hand clarifies the suspension of the Letter Notices for taxable year 2013. This has become a relevant ruling since an avalanche of LNs occurred last June of 2016 – days before then Commissioner Kim Henares stepped down. The rule provides, Letter Notices for taxable year 2013 who are issued together with an “open” Letter of Authority is not suspended.
The important question now is, how do we consider a Letter of Authority good as “closed”? Is it by way of signing an Agreement Form? Paying the deficiency tax? Filing protest letters? Abandoning the case? Or worse, resorting to bribe?
There are many interpretations that actually grew on taxpayer thinking that this is the right and correct way of CLOSING a Letter of Authority. But the law is clear; we cannot interpret the Tax Code for that is the exclusive duty of the Commissioner.
In RMO 37-94, it can be determined that there are two ways to close a Letter of Authority. It’s either thru termination or cancellation of tax liability or payment of deficiency tax. The relevant, acceptable and material proof is Termination Letter and Authority to Cancel an Assessment. If your Letter of Authority has not been issued either one of these; consider it still “open” and if a Letter Notice for the same year comes along, then the audit is not suspended and must continue on and carried out within the parameters of the law and procedures.
Yes, you can cancel deficiency tax assessments. Education is the key to triumphantly do so. The image below is the testamentary evidence that a Letter of Authority can be terminated. To know more, kindly visit and like this Facebook Page www.facebook.com/etmtaxagentoffice and know the 59 Tax Deficiencies chronicled by Mr. Emelino T. Maestro himself.
Be part of a community. Attend our 2nd Philippine Taxpayers’ Conference at December 9, 2016. For inquiries, simply like our Facebook page www.facebook.com/taxpayersconference