REVENUE MEMORANDUM ORDER (RMO) NO. 01-2026
RMO 1-2026 revises the policies, controls, and procedures for audit initiation, conduct, and assessment to ensure transparency, prevent abuse of authority, and uphold due process and accountability.
The aforesaid RMO prescribes the continuance of tax audits and related field operations, including but not limited to the following activities:
- Issuance of Electronic Letter of Authority (eLAs), Mission Orders (MOs), and Tax Verification Notices (TVNs);
- Continuation and Completion of previously suspended audit cases;
- Enforcement, Verification, Assessment, and collection activities requiring audit or field operations; and
- Other audit or enforcement activities necessary to protect revenue or enforce compliance, subject to applicable issuances and the controls set forth in this RMO.
A. Required Labels for Taxpayer Verification
Upon the effectivity of this RMO, the BIR may issue and use audit and verification instruments strictly within their defined scope and in accordance with existing rules and regulations. These instruments must bear the following mandatory labels:
- Electronic Letter of Authority
- An eLA shall prominently display the label:
“FULL EXAMINATION OF BOOKS OF ACCOUNTS AND OTHER ACCOUNTING RECORDS”
- Mission Order
- An MO shall prominently display the label:
“VERIFICATION, SURVEILLANCE, MONITORING, AND INSPECTION ACTIVITIES ONLY – LIMITED AUTHORITY”
- Tax Verification Notice
- An TVN shall prominently display the label:
“VERIFICATION AUTHORITY – LIMITED SCOPE”
B. System Controls and Responsibilities
The system templates, mandatory fields, and validation controls for eLAs must require, at a minimum, the following information:
- The taxpayer’s name and Tax Identification Number (TIN);
- The tax types covered and the corresponding taxable periods;
- The assigned Revenue Officer/s (RO) and Group Supervisor/s (GS);
- A required system field indicating the legal basis under the Tax Code, depending on whether the authority covers a regular or fraud audit; and
- The mandatory label under this RMO must appear prominently on the face of the eLA and be properly generated in IRIS-CMS-A.
For TVNs and MOs, which are governed by their respective issuance procedures under existing revenue issuances, the following shall be observed:
- The correct instrument type shall be clearly indicated;
- Every TVN shall specifically identify the exact transaction, declaration, or claim being verified;
- No language implying full audit or assessment authority shall appear in any TVN or MO; and
- The applicable mandatory labels and identifiers corresponding to each instrument shall be properly reflected in the issued document.
C. RMO 1-2026 introduces the Single-Instance Audit Framework, which limits the issuance of an eLA for a taxable year to only one, covering all tax types, including Value-Added Tax (VAT). This new policy approach aims to prevent overlapping or fragmented audits, provide transparency and accountability in the conduct of tax audits.
D. Except as otherwise provided, in fraud cases, one eLA may cover several years in order to (1) determine or trace continuing transactions entered into during the covered year that commenced in previous years, and (2) establish that the same fraudulent activities were utilized in prior or subsequent years.
| Scope and Application | Exceptions (but not limited to) |
| New audits initiated through the issuance of an eLA starting from the effectivity of this RMO | One-Time Transactions (ONETT) |
| Audits resumed under RMC No. 107-2025 are automatically consolidated into a single eLA per taxpayer and taxable year, per Section V. | Requests/Applications for tax clearance |
| Re-issued eLAs issued solely for the purpose of maintaining continuity of audit authority | Applications for cancellation of business registration, subject to threshold amount under RMO no. 6-23, as amended |
| Cases with fraud and irregularity mentioned in RMO no. 24-08, as amended by RMO no. 27-10 |
Aforementioned exceptions shall not be used to fragment, bypass, or circumvent the regular audit of books of accounts and other accounting records for recurring internal revenue taxes. In cases where findings arises from TVNs or MOs that indicated a broader examination, a separate eLAs shall be issued.
Due to organizational changes and to support the Single-Instance Audit Framework, pending eLAs for the same taxpayer and taxable year will be consolidated, and a Replacement eLA may be issued to reflect the combined audit authority.
E. Beginning March 4, 2026, all pending eLAs with ongoing investigation covering the same taxable year and taxpayer shall be automatically converted into one eLA without requiring any action from the taxpayer, except where a request of non-consolidation is allowed and filed.
In this regard:
- A consolidated replacement eLA will cover all relevant taxes for the year and must be conducted by the appropriate Revenue District Office (RDO)/Office Audit Section (OAS) (for regional cases) or Large Taxpayers (LT) Audit Divisions (for LTS cases).
- All eLAs included in the consolidation are cancelled once the replacement eLA is issued.
- The replacement eLA becomes the only audit authority for that year.
- It should clearly state that it is issued in place of the cancelled eLAs.
Accordingly, even before the automatic consolidation of eLAs takes effect, taxpayers are still allowed to voluntarily settle assessed or admitted tax deficiencies through the procedures provided in existing issuances.
F. Taxpayers with multiple eLAs covering the same taxable year may file a written request for Non-Consolidation, allowing such eLAs to proceed separately. The option to non-consolidate shall be upheld and respected by the BIR. However, following procedures shall be followed:
| Filing Office | RDO/OAS/LT Audit Division handling the eLA covering all tax types (except VAT), called the “Receiving Office.” |
| Action by Receiving Office | Forward the request within 1 day to all other BIR offices handling the taxpayer’s pending eLAs for the same year. Copy furnished to Regional Director (regional cases) or ACIR, LTS (LTS cases). |
| Required Information in Request | – Investigating Office (e.g., VATAS/LTVAU) – eLA Serial Number / Audit Case Number – Date of issuance – Tax type – Taxable period covered by eLA |
| Deadline | On or before February 16, 2026 |
| Late Request | Requests filed after the deadline will not be acted upon |
Requests for non-consolidation allow affected eLAs to proceed independently, with audit actions continuing until April 30, 2026. Starting May 4, 2026, all pending eLAs, regardless of stage, will be automatically consolidated and will no longer proceed separately.
Even before this date, taxpayers may voluntarily settle assessed or admitted tax deficiencies through existing procedures. The BIR’s goal under this RMO is to institutionalize the Single-Instance Audit Framework as the standard approach for tax audits and to ensure its full and permanent implementation under the 2026 Audit Program.
In cases where fraud is found or suspected during an audit or review under the Single-Instance Audit Framework and Consolidation, all related records and working papers must be sent to the proper investigation office:
- Regional cases – Regional Investigation Division (RID)
- National or complex cases – National Investigation Division (NID)
Once referred, the audit on the affected eLAs stops, but RID or NID may issue a new eLA covering multiple years if needed.
G. Issuance of New Electronic Letters of Authority (eLAs)
System‑assisted, centrally approved selection: New eLAs will be issued only after a system‑assisted taxpayer selection based on defined risk criteria and centralized approval. All taxpayers are potential candidates, but only those appearing in the approved system‑generated audit list may be issued eLAs. A more comprehensive procedure for selection, case assignment, and eLA issuance will be implemented on or before April 16, 2026.
Criteria and lists: Audit selection will rely on objective, system‑defined parameters (Annex “A”). The Information Systems Group (ISG) generates the anonymized candidate lists for approval by the CIR. Endorsed recommendations from field offices (e.g., RDO, OAS, RID/NID, LTS) are validated against the approved criteria before inclusion
Anonymized assignment: To reduce discretion‑related risks, initial case assignment is anonymized: taxpayers are represented by system IDs (no name/TIN). Regional Directors/ACIR‑LTS assign cases using workload balancing and rotation rules; ISG later de‑anonymizes for encoding into IRIS‑CMS‑A. Deviations require written justification and prior approval by the CIR.
Issuance conditions: eLAs may be generated only after selection, approval, and anonymized assignment are complete. Every eLA must comply with the Single‑Instance Audit Framework, be properly encoded in IRIS‑CMS‑A, and clearly reflect the taxpayer name/TIN, taxable year(s), tax types, and assigned ROs/GS.
H. Transfer of Task Force Audits and Assessments
Task forces concluded; cases absorbed by regular offices: Audit and assessment functions of task forces are terminated; cases are to be absorbed by appropriate regular offices under this RMO’s procedures and controls. Task force heads must submit Accomplishment and Case Inventory Reports (summary/inventory only; working papers move during formal turnover).
RAFT Task Force: All RAFT LOAs are cancelled for transition and replacement; all RAFT records must be turned over to the National Investigation Division (NID) via the DCIR‑Legal Group within five (5) working days from submission of the consolidated report. Further actions by RAFT cease; where warranted, new eLAs will be issued to NID ROs/GS.
Other task forces: Cases are transmitted to the Revenue Region/RDO or LT Audit Office where the taxpayer is registered. Fraud indicators trigger endorsement to RID/NID; non‑fraud cases are consolidated consistent with the Single‑Instance Audit Framework, or closed if further audit is not warranted.
I. Transition of VAT Audit Sections (VATAS) and LT VAT Audit Units (LTVAU)
Wind‑up through May 15, 2026: VATAS and LTVAU will wind up and align with the Single‑Instance Audit Framework. They must cooperate in consolidations/transfers, transmit records to designated offices, and prepare ongoing audits for transfer on or before April 30, 2026. No new audit actions may be initiated except those necessary to complete, consolidate, or transition existing cases.
J. Audit and Assessment Proper
Due process and documentation: Audits must be fair, transparent, and fully documented.
- Standardized audit checklist (Annex “B”): Mandatory for all audits to minimize unnecessary requests, reduce discretion, strengthen due process, and improve traceability. Industry‑specific checklists may follow; until then, Annex “B” controls. No audit is procedurally complete unless the checklist is accomplished, reviewed, and approved by a supervising official.
- Documenting interactions: Minutes are required for Discussion on Discrepancy after an NOD; signed by the taxpayer/authorized representative and the RO (with refusals noted). Communications should use official channels.
- Assessment preparation: ROs must avoid unreasonable assessments and follow RR No. 12‑99 (as amended) and RR No. 22‑2020 for the NOD stage. NODs must detail discrepancies and clarify they are not assessments. Subsequent notices should address only unresolved issues and state factual/legal bases, consistent with Section 228 of the Tax Code.
- Voluminous records: Examinations are at the taxpayer’s office/place of business or the BIR office (Sec. 235(e), NIRC). If records are voluminous, taxpayers may choose to (a) physically submit certified true photocopies (with originals producible for verification) or (b) have on‑premise examination in a suitable area to avoid disrupting operations.
- Audit safeguards: ROs must confine activities to the authorized scope; avoid irrelevant document requests, out‑of‑scope periods/tax types, or any undue pressure. No assessment may issue without giving the taxpayer an opportunity to be heard. Supervisors must ensure compliance and proper documentation.
Reference link for Annexes: