A LETTER of authority (LoA) issued by the Bureau of Internal Revenue (BIR) empowers a revenue officer (RO) to examine the books of accounts and other accounting records of a taxpayer for the purpose of collecting the correct taxes. The BIR's practice of issuing memorandums of assignment or similar documents for the substitution of ROs, however, has been a recurring issue in a long line of Court of Tax Appeals (CTA) cases.

The Supreme Court resolved the matter last year in a decision penned by Associate Justice Jhosep Lopez. The court, in the case of Commissioner of Internal Revenue (CIR) vs Mcdonald's Philippines Realty Corp. (G.R. 242670, May 10, 2021), confirmed that for a BIR audit to be valid, a separate or amended LoA should be issued in order to replace an RO originally named in a prior LoA. This was upheld in the recent case of Tann Philippines Inc. vs CIR (CTA Case 9820, Dec. 16, 2021).