Inside RMO 22-2026: A Closer Look at the BIR’s Revised Audit Program

September 1, 2026

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) No. 22-2026, prescribing the consolidated and revised policies, guidelines, and procedures for the BIR Audit Program. This follows the suspension of audit works in November 2025 after public outcry, private sector complaints, and Senate investigations into widespread systemic abuse of Letters of Authority (LOAs).

Among the salient provisions of the order is that the issuance of Electronic Letters of Authority (eLAs), Tax Verification Notices (TVNs), and Mission Orders (MOs) shall generally be governed by a system-assisted, risk-based taxpayer selection process. This process utilizes defined criteria, verifiable data, and risk indicators derived from filed tax returns, third-party information, and other relevant data available within BIR systems. Also, BIR cases shall be assigned through an anonymized process where the taxpayer's identity remains concealed during the selection and assignment stages until the audit case is finalized.

Another salient provision is that cases shall be classified as either mandatory or priority. Mandatory cases refer to transactions or situations where an audit or verification is required as a condition precedent to issuing a tax clearance, processing claims for a refund or tax credit, or in other cases identified by the CIR as primary targets for audit or investigation. Included in the mandatory case is when a taxpayer has an under-declaration of sales/income or an overstatement of expenses/deductions by at least 30 percent. Also, taxpayers enjoying tax exemptions and incentives, such as non-profit organizations and BPO companies under the Philippine Economic Zone Authority (PEZA), will be subject to mandatory audit. Mandatory cases shall not be subject to system-assisted selection. Priority cases, on the other hand, involve more number of criteria. Accordingly, taxpayers with huge fluctuations in tax declarations, as well as those reporting "questionable" income or losses, will fall under the category of priority cases.

To address issues of LOA abuse, such as overlapping or fraudulent and unauthorized LOAs, the step-by-step process for eLA issuance will be as follows:

1. The Information Systems Group (ISG) generates an anonymized list of taxpayers based on approved selection criteria.

2. The Approving Authority having jurisdiction over the taxpayer will endorse taxpayers for audit to the DCIR-OG (for Regional Offices) or DCIR-SRG (for LTS)

3. Heads of Investigating Offices recommend taxpayers for audit.

4. The recommendation is reviewed by the appropriate DCIR.

5. Centralized approval is granted by the CIR.

6. The eLA is officially issued.

The order also emphasizes the mandatory use of a centralized BIR system. The prescribed BIR system or platform must be used in the creation, assignment, approval, issuance, printing, and cancellation of eLAs and TVNs, as well as in updating their status. Near real-time and accurate updating of case status in the prescribed BIR system shall be strictly observed, and such updates must be made simultaneously with the corresponding actions reflected in the physical case docket.

Another notable provision in the order is the Audit of Auditors, or Revalida. The Revalida shall be undertaken by the Tax Audit Review Division to conduct the technical review and evaluation of audit findings, computations, and assessment issuances, subject to the approval of the CIR. The revalida shall serve as a quality assurance and compliance review mechanism to ensure that audit findings are factually and legally supported, due process requirements are observed, and assessments are free from material errors or procedural defects.

This is a welcome improvement from the BIR, highlighting the importance and impact made by stakeholders when they publicly voice concerns, issues, and anomalies, especially when dealing with government offices. However, we have yet to see how effective these measures will be in the long term.

Making everything computerized and system-based sounds promising, but it doesn't mean it is invulnerable to compromise, corruption, crashing, or manipulation, as it will still be managed by humans. We are yet to see the safeguards the BIR will place in their system. Moreover, the order makes no mention of taxpayer usage of the system; only the BIR has apparent use and access. While the BIR speaks about transparency, it sounds like the system is only transparent to the BIR itself. If there is something I would improve, it is that taxpayers should at least have viewer access to what the BIR enters into the system, allowing them to retain copies, ensure true transparency, and track their case progress.

Another concern is the audit of auditors. It looks like double work that doesn't add real value. Pardon my bluntness, but it feels like an admission that corruption in the agency will not go away, so they have to audit themselves. It is also an admission that the systems put in place will not work as intended, which negates the system-based improvements mentioned beforehand. They could have simply implemented an audit of auditors from the start to make things simpler.

When there is a will, there is a way. Not to be overly negative about the BIR's effort to address public concern, but people always find a way. Sometimes, a taxpayer's willingness to cooperate in corruption makes it easier for BIR officers to commit unethical acts within the agency. Corrupt individuals have always stayed one step ahead of the government, while the government remains reactive in addressing these challenges. It shouldn't have taken this long to address these issues; honestly, how could they not have figured out the loopholes in their previous policies and procedures much sooner?

What the BIR truly needs is a complete reset, not a band-aid solution to every problem just to say "we have done something." Aside from upgraded systems, there must be a genuine change in culture, personnel, imposing heavier penalties, and the handling of taxpayers' money. If taxpayers actually see and gain the benefits of the taxes they pay, the BIR won't have to worry so much about people failing to pay their correct taxes.

Read Full text of RMO 22-2026 here.