The BIR’s RMO 36-2025 expands mandatory audits, what used to be exceptions are now automatic. Learn what this means for your business and how to prepare.

What is RMO 36-2025?

A Revenue Memorandum Order (RMO) is an official directive issued by the Bureau of Internal Revenue (BIR) to guide its revenue officers on how to enforce tax laws. Think of it as a “rulebook” that explains when and how the BIR should investigate taxpayers.

RMO 36-2025 is especially important because it amends RMO 6-2023, consolidating audit policies and procedures under the BIR Audit Program. While the BIR has yet to release the full details of this new order, its issuance signals that the agency is tightening its audit framework and potentially broadening the triggers for mandatory audits.

Why Does This Matter to Business Owners?

Traditionally, many audit cases depended on the discretion of the BIR examiner. Under RMO 36-2025, the direction is clear: the BIR is moving toward more systemic and mandatory audits.

Some advisors and tax practitioners note that common “red flags” such as the following may now automatically lead to an electronic Letter of Authority (eLOA):

• VAT errors – If VAT returns reflect incorrect input-tax carry-overs.
• Sales understatement of 30% or more – Whether VAT-registered or under percentage tax.
• Unreliable books of accounts – Incomplete, inaccurate, or inconsistent records.

For businesses that are closing down, merging, or reorganizing, practitioners also point out that requirements are stricter. A Termination Letter may now be required before a Tax Clearance Certificate is issued, ensuring no company winds down without leaving a complete audit trail.

Important Note: These specific triggers have been widely circulated in professional discussions but are not yet officially confirmed in the publicly available RMO text. Until the BIR publishes the full document, businesses should treat them as likely scenarios rather than final rules.

What Should Business Owners Do?

The bottom line: what used to be exceptions are becoming the rule. Businesses of all sizes should prepare as though audits are more certain than ever.

Here are practical steps you can take:

1. Double-check VAT filings
   – Make sure input-tax carry-overs are correct.
2. Avoid underreporting
   – Even unintentional sales understatement can trigger closer scrutiny.
3. Keep reliable books
   – Accuracy and consistency are key.
4. Plan properly for closures or reorganizations
   – Follow official procedures strictly.
5. Consult your accountant regularly
   – Proactive compliance is your best defense.

Final Thoughts

RMO 36-2025 makes one thing clear: the BIR is casting a wider audit net. This isn’t about reports or complaints, it’s about systemic rules that automatically put more taxpayers under review.

For business owners, the message is simple: prioritize accurate reporting, transparent bookkeeping, and consistent compliance. In today’s tax environment, the certainty of an audit is replacing the possibility of one.

Disclaimer: This article is for general information only and does not constitute tax or legal advice. For specific concerns, consult your trusted tax advisor. At Bong Corpuz & Co. CPAs, we offer professional Tax Advisory and Compliance Services to help businesses stay audit-ready and compliant with the latest BIR issuances.