SURE-WAYS TO CANCEL BIR LETTERS OF AUTHORITY

“Nag-ramble ang mga kabataang lalaki sa tabi ko, hindi ako natakot. Ni-raid ng mga pulis ang warehouse ko, hindi ako natakot.

“Bakit ganoon? Nang bumisitasa bahay ko ang isang may edad na babae

upang ipareceive ang makulay na letter, nagsimula ng lumabas sa aking katawan ang napakalamig na pawis, biglang nagkaroon ng

kalabugan sa aking dibdib at para mya sumasakal sa akin.

“Nasabi ko tuloy sa aking sarili, “Magkakasakit ata ako ngayon.”

“Kahit hindi maiangat ang namimigat at nanginginig na mga paa, pinilit ko pa ring lumapit sa kanya, ngumiti at abutin – iyon na nga - ang aking kinakatakutan - BIR LETTER OF AUTHORITY [or ‘LA’]”

The above storyline is one of too many horror and funny stories that taxpayers voluntarily shared to ETM.

Because of these types of stories that were passed on and are still being passed on from parent to children, boyfriend to girlfriend to frienemy, etc., the deadly and dreadful reputation, impression and character of LA and its bearers shaped up and is now widely accepted and feared.

This should not be the case. Thus, it is the objective of ETM to expose and explain tax mistakes whether or not deliberately planned and perpetuated.

Unknown to 4,000,000 active taxpayers, wherein 45,000 of them more or less are consistently receiving LAs either on a yearly or once in every two-year basis, LAs is a friend rather than a frienemy. The term ‘FRIENEMY’ is synonymous to ‘bantay-salakay’

To remove fear in the hearts and minds, taxpayers should always remember that the LA is a direct and clear lawful instruction and order, through the Regional Director or Commissioner of Internal Revenue for the concerned ROs to factually verify the authenticity of evidences vis-à-vis entries in the BIR registered books and filed returns.

And, LAs just like other documents can be cancelled and voided. The term ‘cancel or void’ means to make something invalid and unenforceable.

Recently, ETM had cancelled two [2] LAs using the 7 sure-ways as discussed.

7

Most of the LAs for tax years 2009 and 2010 can be cancelled and voided if

‣ Erasure. There is an erasure that altered, modified and changed the original entry or entries on the face of LA

‣ Audit Program. The issued LA is not supported by an Audit Program which must be deliberately planned, prepared and released for specific jurisdiction and tax year

‣ Signatory. The issued LA for cases falling within their respective jurisdiction, is not signed by the Regional Director or the Commission of Internal Revenue

‣ Jurisdiction. The assigned ROs are not under the jurisdiction of the signing authority

‣ Abuse of authority. The procedures in selecting audit candidate was not strictly followed by the Revenue District Officer

‣ Lack of power. The Regional Director without a written approval from the Commissioner of Internal Revenue issued a LA

‣ Selection criteria. The LA showed wrong or no selection criteria

Now that the reasons for cancelling had been laid out, the question is ‘How to proceed in doing the same?’ It is the policy of the State that in silence, there is a direct admission. Thus, a taxpayer should advertise his intention to cancel or void the 2009 or 2010 LA by writing a legal notice to all concerned ROs as soon as possible.

What will happen to the Notice for Informal Conference, Preliminary or Final Assessment Notice or Subpoena Duces Tecum? According to the State’s New Civil Code, acts executed against substantive or procedural rules or originated from irregular and illegal acts shall also be considered irregular and illegal. Thus, they too are cancellable and voidable.