BIR audit of cooperatives

From cooperative blogspot

IF YOUR COOPERATIVE IS UP FOR AUDIT FOR ITS 2009 TAX RETURNS, IT ONLY MEANS THAT IT IS UNDER SUSPICION BY THE BUREAU OF INTERNAL REVENUE

There are no two ways about it.

Your cooperative was served a Letter of Authority (LoA) by the Bureau of Internal Revenue (BIR) this year to audit the 2009 tax returns of your cooperative. The reason is plain and simple. The BIR believes that "there are findings/suspicions of under-declaration of sales/revenues" by your cooperative; that your cooperative has tax deficiencies.

BIR says so on Item 3.1, II Policies and Guidelines, of BIR Revenue Memorandum Order No. 80-2010, dated October 28, 2010. The Order, entitled "CY 2010 Audit Criteria," prescribes the audit of 2009 tax returns by the Revenue District Offices (RDOs), and other concerned BIR units.

The said Revenue Memorandum Order may be viewed/downloaded at under www.bir.gov.ph, "Issuances and Rulings."

The Order assumes that "all taxpayers are considered possible candidates for audit." Priority, however, shall be given to the following taxpayers who renders professional services: lawyers, doctors, engineers, accountants, and other professionals, according to the Order.

Moreover, the Order says that "last priority shall be accorded to those taxpayers with an effective income tax rate of 18% (Gross Income X 18%)."

Going by these criteria, cooperatives are not among the priority for tax audit in 2010.

In addition to the aforementioned suspicion of under-declaration of sales/revenues, your cooperative may had been previously assessed for some back taxes by the BIR. But if not, your cooperative is just plain "luckyk" to have been chosen for tax audit. So there. Just grin and bear it. (END).

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