- Petitioner
- Commissioner of Internal Revenue
- Respondent
- McDonald's Philippines Realty Corp.
- Citation
- G.R. No. 242670
- Court
- Court of Tax Appeals (CTA) Division → Court of Tax Appeals (CTA) En Banc → Supreme Court (SC)
- Division
- Third Division
- Ponente
- J.Y. Lopez, J.
- Decided
- May 10, 2021
Summary
This Supreme Court case establishes critical precedent for tax assessment procedures in the Philippines. The case arose when the Bureau of Internal Revenue assessed McDonald's Philippines Realty Corp. ₱16.2 million in deficiency VAT for 2006. The original revenue officer authorized under a Letter of Authority (LOA) was transferred and replaced by another officer through a mere referral memorandum, without issuing a new LOA. The Court of Tax Appeals invalidated the assessment, finding the substitute officer lacked proper authority. The Supreme Court affirmed, establishing that when revenue officers are reassigned during tax audits, new or amended LOAs must be issued to their replacements. The Court ruled this practice violates taxpayers' due process rights, usurps the Commissioner's statutory authority, and violates BIR regulations. This decision significantly impacts BIR audit procedures and establishes stronger protection for taxpayer rights in assessment proceedings.