BIR Ruling

June 16, 1970 1st Indorsement Referred to the Revenue Director, Revenue Region No. 2, Tuguegarao, Cagayan, the within letter of Mr. Jesus M. Aguas, President and General Manager of the Valley Trading Co., Inc., Cauayan, Isabela dated February 18, 1970 addressed to the Revenue District Officer, Ilagan, Isabela. In this connection, it may be stated that under Section 580 of the Revised Administrative Code, internal revenue agents, agent's assistants and examiners may require the production of books of accounts under a subpoena duces tecum. Accordingly, said officers, when duly authorized to investigate a taxpayer can validly order the latter to submit his books of accounts and related records to the office of the former. (BIR Ruling No. 251, s. 1958, Section 20, Revenue Regulations No. V-1; Field Circular No. V-88; BIR Ruling No. 38, s. 1965). cdti As a general rule, books of accounts of taxpayers should not be retained by internal revenue officers for more than sixty (60) days except (1) when the books, records or papers constitute the evidence of this Office in an unsettled case; (2) in case such records and papers pertain to a case pending in courts; (3) in call cases where fraud is evident and the records and papers must accompany the fieldman's report for evaluation purposes; and (4) in all cases where the records and papers have been seized by virtue of a search warrant and the Court has not ordered their return to the taxpayer (Sec. 20, Rev. Regs. No. V-1, Field Circular No. V-88). As a matter of policy, this Office undertakes the examination of books concerning a particular period, only once. However, books which were previously examined may be examined for the second time or more, if and when the subsequent examinations are duly authorized and the circumstances surrounding the case so warrant. (BIR Ruling No. 87, s. 1959; BIR Ruling No. 486, s. 1959). Under Section 337 of the Tax Code as amended by Republic Act No. 6110, effective September 1, 1969, examination and inspection of the books and records of the taxpayer shall be made only once in a taxable year during the 5 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. casia Be guided accordingly. MISAEL P. VERA Commissioner of Internal Revenue