Beware of the new BIR audit program

More than a decade ago, a taxpayer could expect only one tax investigation by the Bureau of Internal Revenue (BIR) in a given year, and seldom for two successive years.
But now, a taxpayer can be investigated up to three times in the same year: first, under a normal tax audit (i.e., covering all taxes); second, under a value-added tax (VAT) audit; and third, under a Letter Notice audit (which is based on discrepancies arising from the computerized matching of data between the taxpayer’s records and its customers and suppliers).