BIR Ruling

January 31, 1972 Messrs. Almazan, Luczon, Yap & Associates Attorneys and Counsellors-at-Law Suites 302-306 ARNEL Building 435 Juan Luna St. Manila Attention: Mr . Jose V . Yap Gentlemen : This refers to your letter dated January 27, 1972 requesting, in behalf of your client, Federation of Filipino-Chinese Chamber of Commerce of Panay, clarification as to whether or not BIR examiners may be authorized to conduct verification of inventories filed by taxpayers separately and independently of the regular examination of the taxpayer's books of accounts. In reply, I have the honor to inform you that inventories filed by taxpayers with this Bureau in pursuance of Section 13 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations form part of the accounting records of the taxpayers. Thus, considering that under Section 337 of the Tax Code, all the books of accounts, including the subsidiary books, and other accounting records, of corporations, partnerships, or persons shall be subject to examination and inspection only once in a taxable year during the five-year period within which they are to be preserved, except in cases of fraud, irregularity or mistake as determined by the Regional Director or unless the taxpayer requests otherwise, it is the opinion of this Office that verification of inventories cannot be separately and independently authorized without violating the provisions of Section 337 of the Tax Code, as amended by Republic Act No. 6110, as amended. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue CONRADO P . DIAZ Acting Commissioner of Internal Revenue