Box#2 - RDO Code, BIR Form 1900
REVENUE MEMORANDUM ORDER No. 4-2013
SUBJECT : Audit of Tax Returns by Revenue District Offices
TO : All Internal Revenue Officials and Employees Concerned
I. OBJECTIVES
1. To prescribe uniform criteria in the continuing audit tax returns by the
Revenue District Offices (RDOs); and
2. To enhance taxpayers’ voluntary compliance by encouraging payment of
correct amount of internal revenue taxes through the exercise of the
enforcement function of the Bureau.
II. POLICIES AND GUIDELINES
The following policies and guidelines shall be observed in the continuing audit
of tax returns by the Revenue District Offices:
1. All taxpayers are considered as possible candidates for audit.
2. Priority shall be given to the following taxpayers:
a. Professionals and sole proprietorships whose –
income tax due is less than two hundred thousand pesos
(P200,000.00) per annum;
gross revenue is less than forty percent (40%) compared to the
previous year’s reported gross revenue;
tax payment for each tax type is less than thirty-five percent
(35%) as compared to the previous year’s tax payment;
b. Those engaged in but not limited to the industries as follows:
Importers/manufacturers/wholesalers/retailers of wrist
watches and jewelry
Petroleum/gasoline dealers
Hotels, motels, pension houses/lodging houses/inns,
dormitories/boarding houses
Real estate industry
Schools, particularly for foreigners (e.g. English School for
Koreans), review centers
Contractors of NGAs, LGUs and government owned and
controlled corporations
Retailers/wholesalers
Restaurants, fast food chains, catering services, bars, coffee
shops
Hospitals, clinics, medical/dental laboratories
Establishments/clinics for beauty enhancements
Manufacturers/dealers of beauty and health supplement
Amusement/entertainment/event centers
Advertising agencies
Business processing outsourcing companies
E-commerce industry
Manpower and other recruitment services agencies
Other industries peculiar to the area of jurisdiction of the
district office;
c. Those who fall below the established benchmarks of tax compliance;
and
d. Those who maintained an ending inventory with value of 100% or more
of its gross sales.
III. EFFECTIVITY
This Order shall take effect immediately.
(Original Signed)
KIM S. JACINTO-HENARES
Commissioner of Internal Revenue
