What is a Letter of Authority (LOA) in the context of tax assessment?

• A. A LOA is the authority given to the appropriate revenue officer assigned to perform assessment functions.
• B. A LOA is a memorandum of assignment that authorizes audits.
• C. A LOA is a declaration by the CIR that no tax is due.
• D. A LOA is a revenue regulation issued by the Secretary of Finance.

Answer: (A)

A Letter of Authority is the formal grant that empowers the appropriate revenue officer assigned to perform assessment functions. It serves as the official instrument that authorizes the officer to conduct tax examinations, request records, and determine tax liabilities within a defined scope and period. Issued by the Commissioner of Internal Revenue (or the relevant authority), it provides the legal basis for the officer’s actions during the assessment process and helps ensure due process by showing who is authorized and what they may do. It is not simply a memorandum of assignment or a declaration that no tax is due, nor is it a regulatory issuance. The LOA focuses on granting authority to carry out assessment tasks rather than stating an outcome or issuing rules.