Date of Publication: 10 September 2026
Eric T. Dykimching | Ralph Gabrielle D. del Rosario | Troy John G. Butac
In January 2026, the Bureau of Internal Revenue (“BIR”) introduced the “Single-Instance Audit Framework” through Revenue Memorandum Order (“RMO”) No. 01-2026, whereby the BIR simplified the audit procedures by providing that only one Electronic Letter of Authority (“eLA”) shall be issued to a taxpayer for a taxable year. RMO No. 01-2026 was thereafter supplemented by RMO No. 6-2026 and further clarified by Revenue Memorandum Circular No. 14-2026.
On 24 August 2026, the BIR issued RMO No. 22-2026 to consolidate and implement uniform policies, guidelines, and procedures for the BIR Revenue Audit Program (“Consolidated Audit Rules”).
Coverage
The Consolidated Audit Rules apply to all audits and verifications of internal revenue tax liabilities conducted by the various audit divisions or offices of the BIR and cover all taxpayers.
Types of Audit Cases
RMO No. 22-2026 classifies audit cases into Mandatory Cases and Priority Cases.
Mandatory cases refer to transactions or situations where audit or verification is required as a condition precedent to the issuance of a tax clearance, the processing of tax refund or credit claims, or other cases as may be identified by the Commissioner of Internal Revenue (“CIR”) as primary target for audit or investigation. These cases include:
• Prima facie evidence of fraud (under declaration of sales/income or overstatement of expenses/deductions)
• Certain one-time transactions (cases with review findings resulted to a deficiency tax, real property transactions with findings)
• Review of tax exemptions/incentives
• Non-compliance findings arising from Spontaneous Exchange Information
• Certain tax clearance applications
• Failure to respond to third-party information (TPI) data matching/reconciliation request
• Validated discrepancies or material inconsistencies identified through system-generated analytics, internal compliance verifications, or authorized pre-audit validation processes
• Claims for tax refund/credit
Priority Cases, on the other hand, are cases subject to audit through system-assisted selection based on information filed or available in the BIR systems. These selection criteria include:
• Drastic decrease in reported sales or Value-Added Tax (“VAT”) payments
• Significant increase in exempt/zero-rated sales
• Taxpayers with Discrepancy Notices
• Discrepancy in the input VAT carried forward or substantial input taxes
• Minimal income tax due despite substantial gross sales/revenues
• Taxpayers with substantial sales or increase in assets but reporting net loss
• Being unaudited for more than five (5) years
• Shared expenses and related party transactions
• Filing of percentage tax returns despite exceeding the VAT threshold
• Claims for losses/damages due to natural calamities or inventory obsolescence
• Claim of write-off of input tax as allowable deduction
Salient Policies of the Consolidated Audit Rules
1. Single-Instance Audit Framework. The eLA shall cover all tax types for a taxable year.
2. Anonymized Assignment of Cases. The assignment of cases shall be through an anonymized list of selected taxpayers, which is a significant safeguard to ensure impartiality. This rule is further supplemented by a requirement that a revenue officer shall, in general, not be assigned to audit the same taxpayer examined for the immediately preceding taxable year.
3. Practical Rules on Submission of Documents. The Consolidated Audit Rules set out the process for the submission and examination of documents during an audit. Upon service of an eLA, the assigned Revenue Officer or General Supervisor is required to provide the taxpayer with the Standard Checklist of Requirements and the Taxpayer Consent on Audit Venue/Authorized Representative. The taxpayer may submit documents at the appropriate BIR office, or request that the documents be examined or reviewed at the taxpayer’s registered place of business.
4. Prescribed Audit Timelines. The Consolidated Audit Rules prescribe the timelines within which the relevant reviewing office shall review the request for reinvestigation or consideration. Failure to comply with the timelines does not affect the validity of the audit, but the concerned revenue officers may be subjected to administrative accountabilities or penalties.
5. Audit of Auditors. To ensure accountability of revenue officers undertaking the audit programs, the BIR provides for a quality-control mechanism through the Revalida, or “Audit of Auditors.” Under this mechanism, audit investigation reports and assessment issuances may undergo technical review and evaluation by the Tax Audit Review Division, subject to the approval of the CIR. The review is intended to determine whether audit findings and assessments are factually and legally supported, whether due process requirements have been observed, and whether the assessment is free from material errors or procedural defects.
The Consolidated Audit Rules provide for a comprehensive guide not only to revenue officers, but to taxpayers seeking to comply with the various tax regulations. The full text of RMO No. 22-2026 may be accessed through this link.