Senator Erwin Tulfo has called for closer scrutiny of how the Bureau of Internal Revenue (BIR) issues its Letters of Authority (LOAs), urgently warning that some revenue officers might be using them not just to audit but to intimidate and extort taxpayers.
Tulfo claims that LOAs, intended to authorize legitimate tax audits, are being manipulated. He says small business owners are increasingly approached with aggressive audits that demand years’ worth of documentation — and in some cases, they’re pressured to “settle” rather than fight lengthy audit processes.
In response, he’s urging Congress to require full transparency: he wants the BIR to publish a list of all LOAs issued in the past three years, and he’s pushing for a special oversight mechanism to ensure accountability.
Legal experts point out that this concern isn’t new. Under current rules, only certain high-ranking BIR officials — like regional directors, deputy commissioners, and the Commissioner — are allowed to issue LOAs, and any special or reassigned auditors must have a separate, valid LOA in their name. Otherwise, any assessment based on their audit could be considered invalid.
The core of the issue revolves around due process: taxpayers argue that without strict controls, LOAs can become a tool of harassment rather than a formal, legal step in tax collection.