In light of recent public sentiment about numerous complaints from taxpayers about irregularities and inconsistencies within the Bureau of Internal Revenue (BIR), the agency has issued Revenue Memorandum Circular (RMC) No. 107-2025 to address growing concerns regarding the integrity and transparency of its enforcement activities. The circular implements the temporary suspension of all audit and field operations while the BIR undertakes an internal review of its processes and personnel conduct. This advisory aims to provide taxpayers with a clear understanding of the context, scope, and implications of the suspension, as well as the safeguards being introduced to restore public confidence in the tax administration system.
What’s in, what’s out?
The suspension order covers all operating offices of the Bureau of Internal Revenue that conduct field audits and related field operations. The suspension had started last November 24, 2025 and is about to last until an order will be issued by the Commissioner of Internal Revenue. This includes the Large Taxpayers Service (LTS), all Revenue Regions (RRs) and Revenue District Offices (RDOs), the National and Regional Investigation Divisions, Assessment Divisions, the LTS VAT Audit Unit, VAT Audit Sections, Office Audit Sections, and any other BIR offices, committees, or task forces authorized to examine or verify taxpayers’ books of accounts, records, and related transactions or investigations.
However, such suspension has its exceptions. Issuance of written orders for audit or investigation would still push through on the following circumstances:
- Investigation of cases that are at risk of prescribing within six (6) months from the effectivity of the order.
- Processing and verification of estate tax, donor’s tax, capital gains tax, and withholding tax on the sale of real properties or shares of stock, including the corresponding documentary stamp tax returns.
- Examination or verification of internal revenue tax liabilities of taxpayers who are retiring from business.
- Issuance of Letters of Authority (LOAs) or Mission Orders (MOs) for active criminal investigations undertaken by duly authorized enforcement units, based on verified intelligence reports, inter-agency referrals, third-party data validation, or risk-scoring anomalies that require immediate action to prevent prejudice to the government’s case.
- Processing of refund claims where the issuance of an LOA is expressly required by law.
One thing that taxpayers should take note – all BIR audits which are at the Final Assessment Notice (FAN) stage for taxable years 2022 and prior years, this will fall under the exemption. Hence, their BIR audit would still push through.
Key Takeaway
The issuance of RMC No. 107-2025 underscores the BIR’s commitment to addressing the alleged irregularities raised in recent public discourse and to restoring confidence in the integrity of its audit and enforcement functions. By temporarily suspending field audits while instituting internal reviews and corrective measures, the BIR seeks to reinforce transparency, strengthen oversight, and ensure that taxpayer rights are protected throughout the compliance process. As these reforms take shape, taxpayers are encouraged to remain diligent in maintaining complete, accurate, and up-to-date records, and to proactively review their tax positions to ensure readiness once regular audit activities resume.
This period offers an opportunity for taxpayers to enhance their compliance frameworks and prepare for a more structured and accountable tax administration environment moving forward.
Article Written By:
Kyle Clarence L. Williams; Chriztel Joy Manansala; Rhea T. Pelayo; Tax Department
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