Books of Accounts Subject to Examination and Inspection Only Once in a Taxable Year

March 7, 1972 BIR RULING NO. 005-72 Books of accounts subject to examination and inspection only once in a taxable year . Sir: This refers to the letter of the Revenue District Officer, Revenue District No. 4, San Fernando, La Union dated December 29, 1971 posing the following query: "Is the verification of inventories filed by taxpayers independently of regular investigation of all kind of taxes allowed without violating Rep. Act No. 4119, and if so, and should the findings warrant, can it be used as a basis of a reinvestigation?" In reply, please be informed that the inventories filed by taxpayers with this bureau m pursuance to Section 11 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations form part of the accounting returns of the taxpayers. Thus, considering that under Sect 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 conducted by internal revenue officers without violating the provisions of Section 337 of the Tax, Code, as amended by Republic Act No. 6110. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue