May the Commissioner conduct surveillance under Section 6(C) of the NIRC before the formal issuance of a Letter of Authority (LOA)?

• A. No. Surveillance requires a LOA first.
• B. Yes. Surveillance may precede a formal LOA.
• C. Yes, but only if the taxpayer consents.
• D. No. Surveillance is not allowed under the NIRC.

Answer: (B)

Section 6(C) empowers the Commissioner to conduct surveillance as part of tax administration, and that authority does not depend on having a formal Letter of Authority already issued. Surveillance can begin before the LOA to gather information, verify records, and preserve evidence that may later be used in assessing taxes. The LOA is the formal instrument to authorize an actual audit, but it isn’t a prerequisite for starting surveillance. Taxpayer consent isn’t a requirement for this pre-LOA surveillance, since this is a statutory power exercised to ensure accurate tax assessment. So, surveillance may precede a formal LOA.