BIR document authorizing a Revenue Officer to examine a taxpayer's books and records for a specific taxable period.
A Letter of Authority (LOA) is the formal document issued by the BIR that triggers a tax audit. It names the specific Revenue Officer(s) assigned to examine your books and states which taxable year is under review. Without a valid LOA, a Revenue Officer has no legal authority to examine your records — any assessment made without one is void.
Under BIR regulations, the LOA must be served within 30 days from issue date and the audit must be completed within 120 days (extendable under certain circumstances). Taxpayers have the right to verify the validity of the LOA and the identity of the assigned Revenue Officers.
In practice: Mapagkakatiwalaan Hardware Store in Davao receives an LOA for taxable year 2023. The LOA specifies Revenue Officer Juan dela Cruz from RDO 118. The owner calls the RDO to verify, then prepares all books of accounts, official receipts, and supporting documents for the 2023 period. The auditor issues a Notice of Discrepancy if differences are found between declared taxes and the BIR's findings.
Why it matters: An LOA is the start of a formal assessment process that can result in significant tax deficiencies plus interest and penalties. Respond promptly — ignoring an LOA does not make it go away and results in an ex-parte assessment based solely on BIR assumptions. Engage a CPA immediately upon receiving an LOA.
A common taxpayer protection: if the BIR issues a new LOA for the same taxable period after the initial one expired without completion, the new assessment may be challenged as having been issued without authority.