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Should LOAs Be Revalidated?

By: Atty. Raida Argeli Grefiel on May 2,2024

The National Internal Revenue Code, as amended, (the “Tax Code”) authorizes the Commissioner of Internal Revenue (“CIR”) or his duly authorized representative to conduct audits, in light of the power of the Bureau of Internal Revenue (“BIR”) to assess and collect taxes. These audits are conducted by revenue officers who are clothed with a valid Letter of Authority (“LOA”).

Through the years, the BIR has prescribed time frames, i.e., generally 120 days, within which revenue officers should complete and issue a report on the audit investigation. In the past, the continuation of the audit after the lapse of the prescribed period may be challenged by the taxpayer, unless the LOA is revalidated. In this respect, it is important to determine the status of the LOA in unfinished investigations beyond the audit period since the Supreme Court has been consistent in ruling that an invalid LOA nullifies the resulting assessment (Republic of the Philippines v. Robiegie Corporation, G.R. No. 260261, October 3, 2022). In this article, we unravel the rules on LOA revalidation and examine the significance of LOA revalidation today.

As early as 1964, the BIR ordered its revenue officers through BIR Revenue Memorandum Order (“RMO”) No. 43-64 to conclude the audit investigation of taxpayers and submit the audit report within 120 days from the date of issuance of the LOA. Beyond this period, the authority becomes void, and the officer is prohibited from investigating further unless the LOA is revalidated.

The same tenor has been reiterated in BIR RMO No. 28-83 issued in 1983. Thus, in case the audit report cannot be completed within the 120-day audit period, it was mandatory that the LOA be revalidated.

In 1984, BIR RMO No. 33-84 restated the 120-day period of audit investigation without, however, echoing the requirement of LOA revalidation. In addition, the RMO required the responsible revenue officers to show cause why sanctions should not be imposed against them for failure to complete the investigation within 120 days. The subsequent BIR RMO No. 38-88 issued in 1988 was similarly silent on the requirement of LOA revalidation for investigations pending beyond the 120-day period.

Later, the clarificatory BIR Revenue Memorandum Circular (“RMC”) No. 40-06 expressly provided that the 120-day rule on revalidation of LOAs shall be applicable in all cases, with reference to the rule previously laid out in RMO No. 38-88. Taxpayers have relied on this RMC in challenging assessments conducted without LOA revalidation.

However, in AFP General Insurance Corporation v. Commissioner of Internal Revenue (G.R. No. 222133, November 4, 2020) (the “AFP case”) involving an assessment for the taxable year 2006, the Supreme Court clarified that failure to revalidate the LOA after the 120-day period does not render the LOA void ab initio. Beyond the 120-day period, the LOA is merely unenforceable such that revalidation should be sought to allow the revenue officer to continue and eventually complete his investigation. Still the authority of the revenue officer during the first 120 days remains valid so a report on the initial investigation may be issued.

It should be noted that even prior to the promulgation of the AFP case, the BIR issued BIR RMO No. 12-07 which was couched in certain terms that failure on the part of the revenue officer to request for revalidation does not render the LOA void. While the LOA is not nullified, the responsible revenue officer shall nonetheless be subject to disciplinary action for failing to request for revalidation.  

More importantly, BIR RMO No. 44-10 expressly provides that beginning June 1, 2010, revalidation of the LOA is no longer required even if the 120-day audit period has been exceeded. It further provides that the failure of revenue officers to complete the audit process within the prescribed period shall be a ground for imposing administrative sanctions. The same rule on non-revalidation of LOA was maintained in BIR RMO No. 19-15. 

In the recent CTA case of Barrio Fiesta Manufacturing Corporation v. Commissioner of Internal Revenue (CTA Case No. 9871, March 1, 2024), the CTA has upheld the rule that the LOA need not be revalidated after the lapse of the 120-day audit period.

Thus, it is the standing rule today that the LOA is valid even without revalidation after the lapse of the 120-day audit period. While previous BIR issuances have required the revalidation of LOAs after the lapse of the audit period, the more recent issuances have been silent about the revalidation, or even state that revalidation is no longer necessary.  This led the courts to conclude that the failure to revalidate does not render the LOA invalid.  Thus, taxpayers can no longer challenge the non-revalidation of the LOA after the lapse of the audit period in disputing the assessments against them.

Raida Argeli Grefiel is an Associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at or visit MTF website at

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