Khonghun files resolution ordering the investigation of BIR LOAs, MOs

Zambales First District Representative Congressman Jefferson F. Khonghun has filed a resolution, mandating the Congress to conduct an inquiry into reports of the alleged misuse, abuse, and “weaponization” of letters authority (LOAs) and mission orders (MOs) of the Bureau of Internal Revenues (BIR).

Khonghun filed House Resolution No. 743 at the House of Representatives on 9 February 2026, citing that authority should not be used as a weapon against the people.

“Panahon na upang palakasin ang mga pananggalang laban sa katiwalian, tiyakin ang patas na pangangasiwa ng buwis, at ipagtanggol ang karapatan ng bawat taxpayer,” he said.

The congressman cited that LOAs and MOs are legitimate instruments designed to empower revenue officers to examine taxpayer records and enforce compliance, “but recent reports and testimonies suggests that these tools have been misused as mechanisms for harassments, extortion, and personal gain at the expense of the State.”

The official added that during investigations and media reports, up to 70% of collections tied to LOA audits are allegedly diverted to private pockets, with taxpayers pressured into “discounted” settlements that benefit corrupt officials rather than the National Treasury.

He added that taxpayers have described practices such as inflated assessments later negotiated down through unofficial “packages,” the use of drop boxes for clandestine payments, and instruction to falsify receipts, all of which undermine the integrity of tax enforcement.

The Bureau of Internal Revenue (BIR) suspended the issuance of Letters of Authority (LOAs) and Mission Orders (MOs) in November 2025 due to widespread corruption, extortion, and harassment.

Reports indicated these documents were used to intimidate businesses into paying bribes rather than proper taxes. The suspension was lifted in January 2026 after implementing reforms, including a single-instance audit framework, to prevent further misuse.

Some of the key aspects of the misuse of LOAs and MOs of the BIR for the years 2025 and 2026 include: LOAs and MOs allegedly used to demand “softening” fees or bribes from taxpayers in exchange for dropping or reducing tax assessments.

This also include reports that BIR personnel frequently issued multiple, overlapping LOAs for the same taxable year, even for years already settled; as well as bogus assessments, with investigations revealed that some auditors inflated tax liabilities to force businesses to pay unofficial, discounted amounts directly to personnel.

Despite making up only a small fraction of total revenue, the number of LOAs doubled since 2022, reaching over 82,000 by late 2025. Reports suggested that a significant portion of collections from these audits did not reach the government treasury.