April Joy B. Calubayan, CPA

𝐁𝐈𝐑 𝐂𝐨𝐦𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐞𝐫 𝐌𝐞𝐧𝐝𝐨𝐳𝐚 𝐨𝐫𝐝𝐞𝐫𝐬 𝐭𝐡𝐞 𝐭𝐞𝐦𝐩𝐨𝐫𝐚𝐫𝐲 𝐬𝐮𝐬𝐩𝐞𝐧𝐬𝐢𝐨𝐧 𝐨𝐟 𝐋𝐞𝐭𝐭𝐞𝐫𝐬 𝐨𝐟 𝐀𝐮𝐭𝐡𝐨𝐫𝐢𝐭𝐲, 𝐌𝐢𝐬𝐬𝐢𝐨𝐧 𝐎𝐫𝐝𝐞𝐫𝐬, 𝐚𝐧𝐝 𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐟𝐢𝐞𝐥𝐝 𝐚𝐮𝐝𝐢𝐭𝐬

In a joint announcement at the Department of Finance today, Finance Secretary Frederick Go and Bureau of Internal Revenue Commissioner Charlito Mendoza announced the immediate and temporary suspension of all field audits and related operations of the BIR.

“I have ordered the immediate suspension of all field audits and related operations, including the issuance of Letters of Authority and Mission Orders, effective immediately, in accordance with Revenue Memorandum Circular 107-2025. No Letter of Authority or Mission Order shall be created, printed, signed, or served during the suspension period,” detailed Commissioner Mendoza.

In his first week in office, Commissioner Mendoza convened key units of the Bureau of Internal Revenue to gain a thorough understanding of existing audit operations and to identify long-standing issues that have affected taxpayer experience and internal discipline. The suspension was issued after extensive internal consultations and was undertaken with the guidance and strategic oversight of Finance Secretary Frederick Go to ensure full alignment with national priorities on good governance, taxpayer protection, and efficient revenue administration.

“This is in response to the concerns raised by the taxpayers regarding the issuance of Letters of Authority and Mission Orders. We hear the people, we hear your concerns, and are immediately acting on them. The people deserve better,” said Secretary Go, emphasizing that the Department of Finance is committed to protecting taxpayers from potential abuse through a comprehensive review of our existing policies and procedures.

The temporary suspension applies to all BIR offices involved in audit and field operations, including the Large Taxpayers Service, Revenue Regions and District Offices, Assessment Divisions, VAT Audit Units, and Intelligence and Special Audit Units. The exceptions to RMC 107-2025 apply only to urgent or legally mandated cases such as active criminal investigations, one-time transactions, audits prescribing within six months, refund claims that require audits, or immediate action on taxpayers flagged by verified intelligence.

“This suspension is necessary to protect taxpayer rights, strengthen internal discipline, and ensure the integrity of our audit processes. We take every complaint seriously, and any misuse of authority, harassment, or irregularity has no place in the Bureau,” Commissioner Mendoza emphasized.

“All taxpayers shall be treated with the highest degree of professionalism, courtesy, and adherence to the rule of law. Our economy is built upon the contributions of our taxpayers, who deserve fair and honest tax audits,” explained Secretary Go.

Commissioner Mendoza also instructed the creation of a Technical Working Group on LOA and Mission Order Integrity and Audit Reforms to lead the reform efforts. The group is tasked with evaluating existing procedures, identifying operational and systemic vulnerabilities, recommending revised LOA protocols, and integrating digital safeguards and uniform audit standards.

“Our goal is to create processes that are predictable, evidence-based, technology-driven, and fair,” explained Commissioner Mendoza, reiterating that these systems are meant to protect taxpayers while helping the Bureau perform its mandate efficiently.

“I cannot overemphasize President Ferdinand Marcos, Jr.’s directive for the BIR to continue meeting revenue targets while strengthening service delivery for workers, small business owners, and all taxpayers who rely on predictable and transparent audit processes. The overarching directive of the President when I assumed office is to ensure efficient and fair revenue collections,” Commissioner Mendoza said to end the joint announcement.

RMC No. 107-2025: https://tinyurl.com/bdynx69h

BIR Tax Deadline

November 1, 2025 Saturday

SUBMISSION
Consolidated Return of All Transactions based on Reconciled Data of Stockbrokers. October 16-31, 2025

Engagement Letters and Renewals or Subsequent Agreements for Financial Audit by Independent CPAs. Calendar Year beginning January 1, 2026

Deadlines which fall on Weekends, Holidays and Non-Working days shall automatically be moved to the next working day.

💡 New Month, Fresh Drive 💡

It’s the first day of November — a great time to pause and remind ourselves that there’s still time to finish the year strong. 🌿

Stay focused, stay consistent, and keep moving forward — even small, steady steps lead to big results.
Let’s make every effort count as we close out 2025 with purpose and excellence. 💼✨

—
April Joy B. Calubayan, CPA
BOA & BIR Accredited Practitioner

💡 TAX Q&A | If a Related Party or Shareholder Lends Money to a Corporation, Will the BIR Classify It as Dividends?

Q: If a related party or shareholder lends money to a corporation, will the BIR automatically classify it as dividends?

- Not automatically. A loan or cash advance from a shareholder or related party is not considered dividends if it is a legitimate borrowing supported by clear documentation and actual repayment.

To prove it’s a genuine loan, the corporation should:
📘 Execute a written loan agreement or promissory note specifying the amount, purpose, interest rate, and repayment terms;
📘 Record the transaction properly in both parties’ books of accounts;
📘 Ensure actual transfer and repayment of funds; and
📘 Apply interest and withholding tax, when applicable.

If these are not properly documented or settled, the BIR may classify the transaction as a constructive dividend — meaning it’s treated as a distribution of earnings or profits, taxable in the hands of the shareholder.

This is often the case when the shareholder uses company funds for personal benefit, or when there is no clear intent to repay.

📚 References:

- Section 73, NIRC of 1997, as amended – Distribution of Dividends or Assets by Corporations
- Revenue Audit Memorandum Order (RAMO) No. 1-2020
- Relevant BIR rulings and jurisprudence on constructive dividends and related-party advances

💼 As a Certified Public Accountant and BIR-Accredited Practitioner,
I help ensure that shareholder loans and related-party transactions are properly documented and compliant with BIR audit standards — helping businesses prevent reclassification issues and tax exposures.

📩 Message me for professional assistance on loan documentation review or audit-ready compliance support.

📝 Takeaway:

Not all shareholder loans are dividends — but without proof of repayment or documentation, the BIR may treat them as such.
Always document, record, and substantiate every related-party transaction.

📘 EDUCATIONAL TAX POST: | The Importance of a CPA-Certified Statement on the Net Estate of the Decedent

Q: What is a CPA-Certified Statement of the Net Estate of the Decedent?
- It’s a formal computation of the gross and net estate of a deceased person, certified by a Certified Public Accountant (CPA). This certification ensures that all assets, liabilities, and deductions are properly reflected before filing the estate tax return with the BIR.

Q: When is this required?
- Under Revenue Regulations (RR) No. 12-2018, a CPA-certified statement is required when the gross value of the estate exceeds ₱5 million. This rule helps ensure accuracy and accountability in determining the correct estate tax due under the TRAIN Law (RA No. 10963).

Q: Why is it important?
- A CPA-certified statement helps:
✔️ Ensure accurate and compliant computation of the estate’s value
✔️ Avoid delays or penalties in BIR assessment
✔️ Provide transparency and proper documentation for estate settlement

💼 As a Certified Public Accountant and BIR-Accredited Practitioner, I offer professional assistance in preparing and certifying the Net Estate of the Decedent, ensuring:
< Accurate computation of gross and net estate
< Compliance with RR No. 12-2018
< Smooth coordination with the BIR for estate tax filing and settlement

If you or your family are currently processing an estate tax return and need guidance on the CPA-certified statement, you may message me for professional consultation.

📝 Takeaway:

A CPA-certified Statement of Net Estate isn’t just a requirement — it’s a key step to ensure the estate tax filing is accurate, compliant, and hassle-free.

Seek the help of a licensed CPA to ensure your estate documents meet all BIR requirements and avoid unnecessary complications.

📚 References:

- Section 90, NIRC of 1997, as amended
- Revenue Regulations (RR) No. 12-2018 – Implements the estate and donor’s tax provisions under the TRAIN Law (RA No. 10963)

Revenue Regulations No. 25-2025

Suspends the Implementation of the Requirement to Post a Bond under Section 160 of the National Internal Revenue Code of 1997, as Amended, for Importers and Manufacturers of Petroleum Products

Full text: https://tinyurl.com/3wbt89bx