WEEKLY TAX UPDATES [NOVEMBER 27- DECEMBER 1]

Petitioner Royal Class Trading & Transport Corporation filed a Petition for Review seeking the cancellation of BIR assessment for failure to issue a new Letter of Authority (LOA) as a result of re-assignment of the case to a new examiner. It was noted that the new examiner proceeded with the tax audit on the basis of a mere endorsement and revalidation of LOA only. Petitioner claims that the Respondent CIR violated its own Revenue Memorandum Orders No. 38-88 & 43-90 which requires the issuance of a new LOA with the corresponding notation thereto, including the previous LOA number and date of issue of said LOAs, in the event of that any re-assignment/transfer of cases to another examiner and revalidation of LOA which has already expired. Citing, Commissioner of Internal Revenue v. Sony Philippines, Inc., the Court ruled to invalidate the assessment citing that there must be grant of authority before any Revenue Officer can conduct an examination. Consequently, the absence of a new LOA after reassignment will give the new examiner no authority to assess resulting to invalidity of the assessment. [ROYAL CLASS TRADING & TRANSPORT CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 8844, NOVEMBER 16, 2017]

 A CTA DECISION ON ASSESSMENT INVALID FOR FAILURE TO CONVERT LETTER NOTICE (LN) TO LOA

Sparkland Realty Inc. filed a Petition for Review seeking the cancellation of BIR assessment for failure to convert LN to LOA as a result of third-party matching conducted against the record of the Petitioner. It is the claim of the Petitioner that unless authorized by the CIR himself or by his duly authorized representative, through an LOA, an examination of the taxpayer cannot ordinarily be undertaken. Revenue examiner testified that she had already conducted an audit without any LOA at that time she has come up with findings, and only based the audit on the LN.  The Petition for Review is GRANTED resulting to the cancellation of BIR assessments. [SPARKLAND REALTY INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 8824, NOVEMBER 03, 2017]