WEEKLY TAX UPDATES [February 10, 2026]

Taxpayers can refuse audit requests beyond scope of BIR authority [Cebu Daily News, February 10, 2026]

“If a revenue officer requests something that is not within the scope stated in the audit instrument, the taxpayer has the right to refuse,” Mendoza pointed out in Filipino.

https://cebudailynews.inquirer.net/696164/taxpayers-can-refuse-audit-requests-beyond-scope-of-bir-authority

BIR files cases vs. 25 personnel for misuse of letters of authority [GMA News Online, February 10, 2026]

BIR Commissioner Charlito Martin Mendoza stated this during the resumption of the Senate Blue Ribbon Committee’s hearing into the LOA issue, when asked by Senator Erwin Tulfo if there were people held accountable over the misuse of LOAs. 

https://www.gmanetwork.com/news/topstories/nation/976037/bir-cases-personnel-misuse-letters-authority/story/

House bill seeks to raise 13th-month pay tax exemption to P150,000 [ABS-CBN News, February 9, 2026]

Lawmakers from the Makabayan bloc —Antonio Tinio, Sarah Elago, and Renee Co— filed House Bill 7661, citing the need to reduce income tax burdens on ordinary wage and salary earners.

https://www.abs-cbn.com/news/business/2026/2/9/house-bill-seeks-to-raise-13th-month-pay-tax-exemption-to-p150-000-1754

‘No work, no pay’ bill should cover LGU officials too – labor group [Inquirer Visayas, February 9, 2026]

The principle of no work, no pay has already been applied to all ordinary workers, so it is only fair that government officials should set an example, said Wennie Sancho, secretary general of the General Alliance of Workers’ Associations (Gawa) in support of the bill proposing no work, no pay to all government officials.

https://newsinfo.inquirer.net/2179473/no-work-no-pay-bill-should-cover-lgu-officials-too-labor-group

Baguio solon files bill restoring gov’t pre-audit of all state projects [Inquirer Baguio, February 9, 2026]

Congress may again require all state infrastructure projects to undergo pre-audit proceedings to reduce risks and prevent multibillion-peso graft similar to that uncovered last year by the Independent Commission on Infrastructure (ICI) and congressional inquiries, according to Baguio Rep. Mauricio Domogan.

https://newsinfo.inquirer.net/2179479/baguio-solon-files-bill-restoring-govt-pre-audit-of-all-state-projects

[ONCE A TAXPAYER DENIES RECEIPT OF THE BIR’S ISSUANCES, THE BURDEN OF PROOF RESTS UPON THE LATTER TO PROVE THAT THESE ISSUANCES HAVE BEEN ACTUALLY RECEIVED] [PERSONAL SERVICE OF THE FAN/FLD, UNSUPPORTED BY ANY PROOF, CANNOT BE CONSIDERED VALID SERVICE]

Petitioner Ugong Trade and Holdings Inc. filed a Petition for Review seeking the cancellation of the Respondent Commissioner of Internal Revenue (CIR)’s Warrant of Distraint and/or Levy (WDL) and Warrant of Garnishment (WG), which were issued to collect alleged deficiency taxes for the taxable year 2017. The Petitioner argued that the assessments were void for improper service of the Preliminary Assessment Notice (PAN) and Final Assessment Notice (FAN)/Formal Letter of Demand (FLD), making the enforcement measures invalid. It also claimed that the assessment is time-barred under the three-year prescriptive period. Additionally, it denied liability for the alleged deficiency taxes. On the other hand, the Respondent countered that the Court has no jurisdiction because the Petitioner failed to file a timely and valid protest, causing the assessments to become final. Respondent also stressed that tax assessments are presumed correct, and since Petitioner failed to rebut this presumption, the assessments should be upheld. In ruling, the Court held that the Respondent failed to prove proper service of the PAN and FLD/FAN. When a taxpayer denies receipt, the burden is on the Bureau of Internal Revenue (BIR) to show actual mailing and receipt through competent evidence, such as registry return cards or official certifications. Respondent’s evidence, such as registry receipt, courier receipt, and testimony, was insufficient and did not establish valid service, nor was there proof that the person who allegedly received the FAN was authorized to do so. Thus, the assessments were declared VOID for failure to comply with due process requirements. Consequently, the WDL and WG were CANCELLED. [UGONG TRADE & HOLDINGS INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10761, JANUARY 27, 2026]

FRANCHISE TAX, BEING A TAX ON THE EXERCISE OF A PRIVILEGE, IS TAXABLE AT THE PLACE WHERE THE PRIVILEGE IS EXERCISED

The Petitioner, the Local Government Unit (LGU) of Camarines Sur, filed a Petition for Review seeking to overturn the CTA Special Decision which affirmed the ruling of the Regional Trial Court declaring Naga City as the sole LGU authorized to impose and collect Franchise Tax from the Respondent Camarines Sur II Electric Cooperative (CASURECO II) over its entire service area. The Petitioner contended that Franchise Tax is territorial in nature and, since the nine (9) municipalities where CASURECO II operates are within the territorial jurisdiction of Camarines Sur, the province should be the proper taxing authority. In contrast, the Respondent argued that the City of Iriga doctrine governs, maintaining that Franchise Tax is an excise tax imposed on the exercise of privilege. Thus, the proper situs of taxation is the place where the privilege is exercised, or the location of the Respondent’s principal office, which is in Naga City. In ruling, the CTA En Banc held that the City of Iriga doctrine applies, emphasizing that Franchise Tax is imposed on the exercise of a privilege rather than on the location of customers or operations. The situs of taxation is the principal office where the franchise is exercised. Since the Respondent’s principal office is located in Naga City, only Naga City is authorized to levy and collect Franchise Tax on all its gross receipts, including those derived from the nine (9) municipalities in Camarines Sur. The Petition was therefore DENIED. [THE LOCAL GOVERNMENT OF CAMARINES SUR VS CAMARINES SUR II ELECTRIC COOPERATIVE (CASURECO II) & THE LOCAL GOVERNMENT OF NAGA CITY, CTA EN BANC CASE NO. 2941, JANUARY 23, 2026]

THE MERE PAYMENT OF A COMPROMISE PENALTY DOES NOT AUTOMATICALLY RESULT IN THE CASE’S DISMISSAL

The Petitioner, James Alekhine Yap Tan, filed a Petition for Review seeking to overturn the Regional Trial Court (RTC) Decision affirming his conviction for failure to obey summons under Section 266 of the Tax Code. He argued that the Subpoena Duces Tecum (SDT) issued against him was unconstitutional for lack of particularity and materiality, therefore amounted to an unreasonable search. Also, the Letter of Authority (LOA) was invalid due to the Bureau of Internal Revenue’s (BIR) failure to revalidate it after the expiration of the 120-day validity period. Lastly, his payment of the compromise penalty prior to the filing of the criminal case should have resulted in the dismissal of the charges. On the other hand, the Respondent Prosecution countered that the SDT was sufficiently specific and material, as it enumerated documents directly related to the tax audit covered by the LOA. It is likewise argued that revalidation of the LOA was no longer required, as the revalidation rule was no longer in effect at the time the audit investigation commenced. Further, the payment of the compromise penalty for failure to obey summons does not justify the withdrawal or dismissal of the criminal case. In its ruling, the CTA En Banc upheld the validity of the SDT, finding that the list of documents required was specific, relevant to the audit, and compliant with the requirements of Rule 21 of the Rules of Court. Also, the LOA remained valid despite the absence of revalidation, clarifying that the 120-day revalidation requirement had already been repealed under BIR Revenue Memorandum Order (RMO) No. 44-2010. Consequently, failure to revalidate did not render the LOA void. Moreover, the payment of the compromise penalty did not result in the dismissal of the criminal case. A valid compromise requires the mutual consent of both the taxpayer and the BIR, and that payment alone does not consummate a compromise agreement nor extinguish criminal liability in the absence of proof of such agreement. The Petition was therefore DENIED. [JAMES ALEKHINE YAP TAN VS PEOPLE OF THE PHILIPPINES, CTA EN BANC CRIMINAL CASE NO. 167, JANUARY 22, 2026]