BIR Suspends All Audits Under RMC 107-2025: What Businesses and Taxpayers Must Do Now

(As of November 24, 2025)

The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular (RMC) No. 107-2025, ordering a full suspension of all tax audits and field operations nationwide. This unprecedented move marks one of the most significant tax administration shifts in recent Philippine history.

Businesses are now asking: How does this affect my ongoing audit, tax exposure, or next compliance cycle?

If you are a corporate taxpayer, SME, professional, or individual with potential tax deficiencies, this temporary halt presents both opportunities and risks. Below is a comprehensive breakdown of what the circular means and what you must do now to prepare for a tighter audit environment when operations resume.

Why the BIR Suspended All Field Audits

RMC 107-2025 stops the issuance and implementation of:

• Letters of Authority (LOAs)

• Mission Orders (MOs)

According to the Department of Finance, the moratorium aims to:

• Address long-standing issues in irregular audit practices

• Strengthen taxpayer protection mechanisms

• Review and modernize audit procedures

• Restore trust and enhance ethical governance

This aligns with years of Supreme Court rulings emphasizing due process, valid LOA requirements, and adherence to strict audit timelines.

In short: the BIR is resetting and cleaning up its audit system.

Who Is Covered by the Suspension?

The suspension applies to all BIR operating units, including:

• Revenue District Offices (RDOs)

• Revenue Regions

• Large Taxpayer Service (LTS)

• Investigation & Assessment Divisions

• VAT Audit Groups

• Office Audit Sections

This means taxpayers of all types—from large corporations to microbusinesses to self-employed professionals—are shielded from new audits for now.

Exceptions: Not All Audits Are Frozen

The moratorium does not apply to certain sensitive or urgent cases. The BIR may continue issuing or implementing LOAs for:

• Cases prescribing within six months

• Capital gains tax, estate tax, donor’s tax, and OTX verifications

• Businesses retiring or closing

• Criminal tax fraud investigations

• Refund claims requiring audit

If you fit any of these categories, expect BIR contact to continue.

How RMC 107-2025 Affects Ongoing and Future Audits

1. Ongoing Audits Are Paused

All fieldwork stops, including:

• Document requests

• Site visits

• Interviews

Unless you fall under one of the exceptions.

2. No New LOAs Will Be Issued

A major relief for taxpayers expecting imminent audits.However, prescribing cases may still receive LOAs.

3. Compliance Deadlines Still Apply

The moratorium does not suspend:

• Assessment deadlines

• Collection efforts

• Protest filing periods

Your tax compliance must continue uninterrupted.

What This Means for Your Business

The audit freeze gives taxpayers a rare opportunity to strengthen compliance without active BIR pressure.

Use this time to:

• Review and reconcile books of accounts

• Match financial statements with tax filings

• Identify compliance gaps

• Fix errors before future audits

• Organize documentation previously overlooked

With expected reforms and tighter audit controls after the moratorium, preparation now is your best long-term defense.

Strategic Actions to Take During the Audit Freeze

1. Conduct a Preventive Internal Tax Audit

Focus on high-risk areas:

• VAT declarations and input-output matching

• Withholding tax compliance

• Related-party transactions

• Revenue reconciliation

• OPEX spikes or unusual deductions

2. Strengthen Documentation and Defensible Positions

Weak documentation = exposure.Organize transaction files, receipts, contracts, and working papers—especially for:

• VAT

• Withholding

• Expense claims

• Revenue recognition

3. Identify Areas for Voluntary Corrections

Recent Supreme Court rulings invalidate assessments due to:

• Invalid LOAs

• Unauthorized examiners

• Defective or premature PAN/FAN

• Violations of due process

• Late issuance beyond prescription

These defenses are powerful—but proactive compliance is still better than litigation.

4. Prepare for a More Intense Post-Suspension Audit Environment

Expect the following once the moratorium is lifted:

• Surge in newly issued LOAs

• Faster, more automated audit procedures

• Stricter document verification

• Greater reliance on third-party data matching (e.g., banks, suppliers, LGUs)

Audit reform means the BIR will become more disciplined—but also potentially more aggressive.

Key Legal Insights Based on Supreme Court Jurisprudence

Recent rulings emphasize:

• No LOA = No valid audit.

• Only examiners named in an LOA may conduct an audit.

• PAN and FAN timelines must be followed strictly.

• Assessments issued out of time are void.

These protections ensure taxpayers are treated fairly—and RMC 107-2025 suggests the BIR is aligning its internal processes with these legal standards.

Final Thoughts: Use This Window Wisely

RMC 107-2025 is a strategic pause that benefits taxpayers who take action now.

This is the ideal time to:

✔ Strengthen compliance

✔ Assess risks

✔ Fix documentation gaps

✔ Prepare for enhanced audit controls

✔ Seek expert advice before audits resume

Those who prepare today will face a safer audit environment tomorrow.

Need Expert Guidance? Book a Consultation

We assist clients with:

• Internal tax compliance reviews

• Audit preparedness & documentation planning

• Assessment defense strategies

• Exposure analysis for high-risk tax items

If you want to ensure your business is ready for the new BIR audit era, book a consultation and get tailored, expert advice.