Authority and Scope of the Audit
- The audit mandated targets the Bureau of Internal Revenue's (BIR) assessments, revenues, and receipts.
- Records subject to audit are public records accessible upon presidential order per R.A. 8474.
- The audit function constitutionally belongs to the Commission on Audit (COA), though full implementation is pending.
- A public policy to conduct an audit of BIR’s tax assessments and revenues is declared desirable.
Coordination and General Procedures for Audit
- The Department of Finance and the BIR must adopt measures and procedures for conducting the audit, coordinated with the COA.
- The audit is a performance audit, conducted on a post-audit basis, focusing on final tax assessments.
- Audits on disputed assessments wait for final determination by the appropriate authority.
Prohibition Against Duplicate Assessments
- No duplicate tax assessment shall be made, except in cases of fraud or clear abuse of discretion.
- Prior report and concurrence of the Commissioner of Internal Revenue is required before duplicate assessments.
- Only the BIR, with Commissioner's clearance, may contact the taxpayer.
Confidentiality of Tax Information
- COA auditors must maintain strict confidentiality of all tax information and sensitive data.
- Disclosure of business secrets, income, operations, strategies or any confidential data is prohibited except where authorized by law.
Restrictions on Audit Procedures and Communications
- COA auditors shall not directly contact BIR examiners under audit.
- Audit observation memoranda or charges shall not be issued except final audit reports after preliminary discussions.
- Final audit reports shall be submitted only to the Commissioner of Internal Revenue or designated representatives.
Confidential Distribution of Final Audit Reports
- Only the Commissioner of Internal Revenue, the Secretary of Finance, COA Chair and Commissioners, the Office of the President, and Congress may receive the final audit report on a strictly confidential basis.
- Disclosure otherwise requires a court order or presidential directive.
Material Basis and Restrictions in Conducting Audit
- Audits are to be based strictly on taxpayer records in possession of the BIR or other government agencies.
- Communication with taxpayers during audit is generally prohibited, except for confirmatory letters and checks of actual tax payments as per generally accepted auditing standards.
Effectivity and Supersession of Inconsistent Rules
- The Executive Order takes effect immediately upon issuance.
- Previous rules, regulations, or issuances inconsistent with this order are superseded, repealed, or modified accordingly.
Legal Consequences of Violations
- Violations of this Executive Order or its implementing guidelines and rules will be dealt with in accordance with existing laws.