Published 29 October 2021, The Daily Tribune

In the last article, we discussed the recent case of Commissioner of Internal Revenue v. McDonald’s Philippines Realty Corp (G.R. 242670; 10 May 2021), where the Supreme Court held that the practice of reassigning or transferring revenue officers originally in a Letter of Authority (LoA), and substituting them with new revenue officers to conduct the audit or investigation without a separate LoA violates the taxpayers’ right to due process.

To recall, an LoA allows revenue officers to examine the books of account and other accounting records of taxpayers to determine the correct tax liability. It is part of a taxpayer’s right to due process and not just a mere formality.

In connection with the topic on LoA, we now discuss a significant development by the BIR with respect to the modes of serving this document. Last October 2020, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 110-2020, which provides detailed guidelines on the proper modes of service of an electronic Letter of Authority (eLA).

An eLA, as the name suggests, is an electronic LoA issued by the BIR to examine the books and records of a taxpayer for a particular taxable period. The eLA is electronically generated and its issuance is through the electronic Letter of Authority Monitoring System.

With respect to its mode of service, it was the issuance of RMC 110-2020 which clarified that the modes of service for assessment notices such as Preliminary Assessment Notice, Final Assessment Notice/Formal Letter of Demand and Final Decision on Disputed Assessment — also apply to eLA.

Observing that there are instances when the concerned taxpayer or his authorized representative, or authorized officer could not be found in the registered address, the RMC provides three modes of service of an eLA: (1) personal service; (2) substituted service; and (3) service by mail.

In personal service, the Revenue Officer (RO) or any BIR employee as duly authorized for this purpose will deliver personally a copy of the eLA to the taxpayer’s registered address or known address, or wherever the taxpayer may be found. The RMC provides that a “known address” shall mean a place other than the registered address where business activities of the party are conducted or his place of residence.

Similar to any judicial rule, personal service is the preferred mode of service. As an exception, the BIR can resort to substituted service or service by mail if personal service is not possible. With respect to substituted service, however, it can only be resorted to when the taxpayer is not present at the registered or known address.

In substituted service, the eLA may be left at the taxpayer’s registered address or place where the business activities are conducted, with his clerk or with a person having charge thereof. However, if the known address is the place of residence, substituted service can be made by leaving the copy with a person of legal age residing therein.

If no person is found in the taxpayer’s registered address or known address, or the taxpayer refuses to receive the eLA, the RO shall bring a barangay official and two (2) disinterested witnesses (persons of legal age other than employees of the BIR) to the address so that they may personally observe and attest to such absence. The original copy of the eLA shall be given to said barangay official.

In service by mail, the eLA is sent through: a registered mail with an instruction to the postmaster to return the mail to the sender after ten (10) days, if undelivered; through a reputable professional courier company; or through ordinary mail, if no registry or reputable courier is available in the locality of the taxpayer.

From the foregoing modes of service, the process of tax audit and investigation is significantly expedited — making it easier for the BIR to assess taxpayers. For taxpayers, this development pressures them to know the process, rights, and remedies in a tax assessment.

Note, that despite the designation of “electronic” in the term ‘eLA’, serving BIR letters or notices through electronic mail is not one of the valid modes of service.

For comments and questions, please send an email to