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REVENUE MEMORANDUM CIRCULAR (RMC) NO. 014-2026
This Circular clarifies the specific provisions of RMC No. 8-2026 on the lifting of the suspension of tax audit & field operations, and on the implementation of revised audit policies, procedures and safeguards discussed in Revenue Memorandum Order (RMO) No. 1-2026 and RMO No. 6-2026, respectively.
| 1. Authorized Audit and Verification Instruments | Revenue audit authorities such as Letters of Authority (LOAs) and electronic Letters of Authority (eLAs) that were issued before the implementation of RMO No. 1-2026 remain valid and enforceable, as long as they complied with the laws and rules in force at the time they were issued. The new framework introduced by RMO No. 1-2026 particularly the Single-Instance Audit Framework does not apply retroactively, thus, it does not invalidate or nullify prior audit authorizations. However, these previously issued LOAs/eLAs may still be replaced, when necessary, such as in cases of reassignment or restructuring. When replaced, the Replacement eLA is not considered a new audit authority, but merely a continuation or consolidation of the original authority. This ensures continuity in audit processes without requiring a restart or new approval. In short, the rule preserves the legality of past audit actions while allowing administrative adjustments under the updated system. |
| 2. Single-Instance Audit Framework | Under RMO No. 1-2026, the Single-Instance Audit Framework requires that there should generally be only one audit per taxpayer per taxable period. If multiple eLAs exist covering the same taxpayer and period, these are subject to automatic consolidation into a single Replacement eLA to eliminate duplication and ensure a more efficient audit process. During the transition period, there is a limited exception, taxpayers may file a Request for Non-Consolidation of VAT cases on or before March 13, 2026, allowing separate audits to temporarily continue. If granted, the separate audits may proceed only until May 15, 2026. Starting May 18, 2026, all pending eLAs must be consolidated, and separate audits can no longer continue independently. |
| 3. System-Assisted Audit Initiation and eLA Issuance | Audit selection criteria are not fixed and may be updated periodically to reflect changing priorities and strategies of the tax authority. The Commissioner of Internal Revenue (CIR) has the authority to add, revise, or replace these criteria to improve tax compliance, address emerging risks, and align with revenue goals. However, any changes must be implemented through the system-assisted selection process, ensuring that audit selection remains objective, data-driven, and standardized. This prevents arbitrary or discretionary selection of taxpayers and promotes fairness and transparency in audit initiation. In essence, while the criteria can evolve, the process for applying them remains structured and controlled. |
| 4. Consolidation of Pending Audits | The important dates are as follow: – March 13, 2026 (deadline to request non-consolidation), – March 20, 2026 (start of automatic consolidation), – May 15, 2026 (deadline for audit preparation and transfer), and – May 18, 2026 (mandatory consolidation of all cases). Consolidation applies only to multiple LOAs/eLAs covering the same taxpayer and taxable period; a single LOA/eLA is not subject to consolidation. Timely requests for non-consolidation allow separate audits only until May 15, after which all cases shall be consolidated. Audit findings shall continue under a Replacement eLA without the need to reissue notices, unless materially changed. The Replacement eLA must be served anew. Existing waivers remain valid, prior audit actions (e.g., notices and SDTs) remain enforceable, and late requests for non-consolidation shall not be allowed. |
| 5. Transfer and Dissolution of VAT Audit Offices and Task Forces | VATAS and LTVAU may continue processing pending audit and assessment cases only until May 15, 2026, subject to the consolidation framework under RMO No. 1-2026. After this date, they shall cease audit functions (except for VAT refunds) and proceed with the winding up of operations until May 29, 2026. Cases subject to automatic consolidation shall no longer proceed independently. Upon dissolution, all case dockets, evidence, working papers, and issued but unserved processes must be properly inventoried and formally turned over to the appropriate receiving office, with an acknowledged transmittal. |