Scope, limitations of BIR mission orders
By: Atty. Rey Christian Guintibano on March 13,2025
In our article published on January 23, 2025, we discussed the Bureau of Internal Revenue’s (BIR) Tax Compliance Verification Drive (TCVD), commonly known as tax mapping. One key requirement for Revenue Officers (ROs) to be able to conduct tax mapping is that they must have a valid mission order.
Mission orders issued by the BIR are based on Section 6(C) of the Tax Code, which grants the Commissioner of Internal Revenue the authority to order inventory-taking of a taxpayer’s goods or place a business under surveillance if there is reason to believe it is not declaring the correct income, sales, or receipts for tax purposes. However, this authority is subject to specific rules and procedures.
The BIR has issued several regulations requiring mission orders in tax enforcement activities. As mentioned earlier, Revenue Memorandum Order (RMO) No. 09-2006, which prescribes the guidelines for TCVD, mandates that ROs conducting tax mapping must have a valid mission order issued and signed by their respective Regional Directors. The mission order must specify: (1) the exact names of the ROs conducting the tax mapping, (2) the specific area covered, and (3) the date and time of the operation. RMO No. 3-2009, which governs surveillance and stock-taking activities under Oplan Kandado, requires a mission order signed by the concerned Regional Director (RD) or Assistant Commissioner (ACIR) before conducting surveillance. Additionally, the number of mission orders issued must match the number of stores or outlets monitored. Results from the surveillance can lead to the issuance of a closure order, which is executed by a team of revenue officials led by the Regional Director, ACIR -ES/LTS, and the Head of the Investigating Office concerned, or by the Commissioner of Internal Revenue. If deemed necessary, the execution of the closure order may be carried out with the assistance of the PNP or Barangay Officials in the locality.
Similarly, under RMO 40-2022, all surveillance and/or enforcement activities relative to illicit production, trade, sale, or possession of articles subject to excise tax must be covered by a mission order signed by the Deputy Commissioner of Internal Revenue-Operations Group, ACIR, LTS, or the concerned RD. The mission order, which directs the concerned RO to enter any house or place where articles subject to excise tax are produced and to seize any articles on which excise taxes have not been paid, must be served to the subject taxpayer.
While Section 15 of the Tax Code authorizes the BIR and its officers to make arrests and seizures, a mission order is not equivalent to a search or arrest warrant. A mission order, while directing an RO to enter a place or apprehend violator, will not suffice if there is no warrant, and will render any search or seizure void.
In CIR v. GB Global Exprez, CTA En Banc Case No. 2583 (June 22, 2023), a BIR Strike Team entered a manufacturing facility pursuant to a mission order to conduct surveillance. However, the team also seized samples of cigarette products and physically padlocked the facility. The CTA en banc ruled that the Tax Code, in giving BIR the authority to make arrests and seizures, simply recognized the agency as a law enforcement entity, akin to police officers – it did not exempt the BIR from securing a search warrant from the court before making searches and seizures.
The CTA further stated that even assuming arguendo a search warrant was not required, the actions performed by the BIR Strike Team were still void due to procedural infirmities, as the mission order did not authorize business closure.
The CTA has also ruled that a mission order cannot replace a Letter of Authority (LOA) required in BIR assessments. In one case, the BIR issued a mission order directing its ROs to validate the company’s Importer’s Sworn Statement. The ROs then proceeded to assess the company without first securing an LOA, claiming that the mission order was sufficient. However, the Court ruled that a mission order only authorizes surveillance, not an audit or assessment. If the ROs found discrepancies, they should have obtained an LOA before proceeding with the assessment. (Formula Sports, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9625, March 2, 2022)
As mentioned earlier, before BIR officers can conduct surveillance on a taxpayer, they must be equipped with a valid mission order. In another case, BIR officers conducted surveillance on a company without a mission order, which led to the issuance of a letter recommending the closure of the business. The CTA ruled in favor of the taxpayer, holding that all surveillance activities and any subsequent recommendation for business closure are void without a mission order. (Commissioner of Internal Revenue v. iScale Solutions, Inc., CTA En Banc Case No. 2624, August 23, 2023)
Taxpayers should be aware of the scope and limitations of a mission order when presented with one during tax mapping or surveillance. A mission order only authorizes observation and inventory-taking; it does not permit an assessment or business closure. If an RO acts beyond the authority granted by a mission order, the taxpayer may contest the validity of such actions on the ground of failure to observe due process of law.
Rey Christian M. Guintibano is an Associate of Mata-Perez, Tamayo & Francisco (MTF Counsel).
He acknowledges the contribution of Mr. Joshua Rizlan A. Simbillo in this article. 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 info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com.