NOTES IN ORGANIZATION AND FUNCTIONS OF THE
BUREAU OF INTERNAL REVENUE
1. Powers and Duties of the Bureau of Internal Revenue
The Bureau of the Internal Revenue is the under the control and supervision of the Department
of Finance and its powers and duties include the assessment and collection of all national
internal revenue taxes, fees and charges; the enforcement of all forfeitures, penalties, and fines;
and the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and
the ordinary courts.
2. Chief Officials of the Bureau of Internal Revenue
The Bureau of Internal Revenue is headed by a chief known as the Commissioner, with 4
assistants known as Deputy Commissioners.
3. Powers of the Commissioners
a. Power of the Commissioner to interpret tax laws and to decide tax cases
b. Power of the Commissioner to obtain information; and to summon and to take testimony of
persons (Authority to administer oath)
c. Power of the Commissioner to make assessments and prescribe additional requirements for
tax administration to and enforcement.
4. Power of the Commissioner to make assessments and prescribe additional requirements for tax
administration to and enforcement, includes:
a. Authority to examine returns and determine tax due
b. Authority to conduct inventory-taking, surveillance and to prescribe presumptive gross
sales and receipts
c. Authority to terminate taxable period
d. Authority to prescribe real property values
e. Authority to inquire into bank deposit accounts
Authority to Terminate Taxable Period
When it comes to the knowledge of the Commissioner that a taxpayer is retiring from business
subject to tax; is intending to leave the Philippines; intending to remove his property from the
Philippines; or intending to hide or conceal his property; or is performing any act tending to
obstruct the proceedings for the collection of the tax, the Commissioner may declare the tax
period of such taxpayer terminated at any time and shall send the taxpayer a notice of such
decision, together with a request for the immediate payment of the tax for the period so
declared terminated and the tax for the preceding year or quarter, and shall be subject to all the
penalties, unless paid within the time fixed in the demand made by the Commissioner.
Authority to Prescribe Real Property Values
The Commissioner is authorized to divide the Philippines into different zones or areas and shall
determine the fair market value of real properties located in each zone or area.
For purpose of computing any internal revenue tax, the value of the property is whichever the
higher is of:
1. The fair market value as determined by the Commissioner or
2. The fair market value as shown in the schedule of values of the Provincial and City
Assessors.
Authority to Inquire Into Bank Deposit Accounts
Notwithstanding any contrary provision of Republic Act No. 1405 (Bank Secrecy Law) and other
general or special laws, the Commissioner is authorized to inquire into the bank deposits of:
1. A decedent to determine his gross estate; and
2. Any taxpayer who has filed an application for compromise of his tax liability by reason of
financial incapacity to pay his tax liability.
In case a taxpayer files an application to compromise the payment of his tax liabilities on his
claim that his financial position demonstrates a clear liability to pay the tax assessed, his
application shall not be considered unless he waves in writing his privilege under Republic Act
No. 1405 or under other general or special laws, and such waiver shall constitute the authority
of the Commissioner to inquire into the bank deposits of the taxpayer.
Issuance and Rulings of the Bureau of Internal Revenue
Revenue Regulations (RRs) are issuances signed by the secretary of Finance, upon
recommendation of the Commissioner of Internal Revenue, which specify, prescribe or defines
rules and regulations for the effective enforcement of the provisions of the National Internal
Revenue Code (NIRC) and related statutes.
Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions;
prescribe guidelines; and outline processes, operations, activities, workflows, methods and
procedures necessary in the implementation of stated policies, goals, objectives, plans and
programs of the Bureau in all areas of operations, except auditing.
Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the
Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax
laws, as applied to a speci8ric set of facts, with or without established precedents, and which
the Commissioner may issue from time to time for the purpose of providing taxpayers guidance
on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly
issued RMRs, otherwise, the Ruling are null and void abs initio.
Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable
portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR
and other agencies/offices.
Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the
Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue’s position on
certain specific issues of law or administration in relation to the provisions of the Tax Code,
relevant tax laws and other issuances for the guidance of the public.
BIR Rulings are official position of the Bureau to queries raised by taxpayers and other
stakeholders relative to clarification and interpretation of tax laws.
5. Delegation of Power
The Commissioner may delegate the powers vested in him under the Tax Code to any or such
subordinate officials with the rank equivalent to a division chief or higher. The following powers
of the Commissioner may not be delegated:
a. The power to recommend the promulgation of rules and regulations by the Secretary of
Finance;
b. The power to issue rulings of first impression or to reverse, revoke or modify any existing
ruling of the Bureau;
c. The power to compromise or abate any tax liability: Provided, however, that assessments
issued by the regional offices involving basic deficiency taxes of P500,000 or less, and minor
criminal violations, discovered by regional and district officials, may be compromised of the
Regional Director as Chairman, the Assistant Regional director, the heads of the Legal,
Assessment and Collection Divisions and the Revenue District Officer having jurisdiction over
the taxpayer, as members;
d. The power to assign or reassign internal revenue officers to establishments where articles
subject to excise tax are produced or kept.
6. Authority to Internal Revenue Officers to make arrests and seizures
The Commissioner, the Deputy Commissioners, the Revenue Regional Directors, the Revenue
District Officers and other internal revenue officers have the authority to make arrests and
seizures for the violation of any penal law, rule or regulation administered by the Bureau of
Internal Revenue.
7. Collection Agents (Internal Revenue Taxes)
a. The Commissioner of Customs and his subordinates with respect to the collection of
national internal revenue taxes on imported goods;
b. The head of the appropriate government office and his subordinates with respect to the
collection of energy tax;
c. Banks duly accredited by the Commissioner with respect to receipt of payments of internal
revenue taxes.
8. Sources of Revenue
a.
b.
c.
d.
e.
f.
g.
Income Tax
Estate and Donor’s Taxes
Value-Added-Tax
Other Percentages Taxes
Excise Taxes
Documentary Stamp Taxes
Other taxes imposed and collected by the Bureau of Internal Revenue