What is Tax Assessment?

The making out a list of property, and fixing its valuation or appraisement; it is also
applied to making out a list of persons, and appraising their several occupations, chiefly
with a view of taxing the said persons and their property.
Who Conducts Tax Assessments in the Philippines?
Under the NIRC, only the BIR, through its Revenue Officers; who are granted a letter of
authority is granted authority to conduct tax assessments.
What is the importance of a LOA (Letter of Authority) when it comes to tax
assessments?
In a case decided by the Supreme Court, it held that the absence of a Letter of Authority
(LOA, makes the assessment unauthorized and thus, void. The Letter of Authority must
also specify which taxes are covered by the tax assessment; it shall likewise only cover
one taxable year.
Can a prior issuance of a Letter of Notice substitute a Letter of Authority?
The SC in the same case also held that despite the prior issuance of an LN, the BIR’s
failure to issue an LOA constituted a violation of due process and considered fatal to the
tax audit.
What are the different classifications of Assessments?
1. Self-assessment – one in which the tax is assessed by the taxpayer himself.
2. Illegal and Void assessment – one wherein the tax assessor has no power to act
at all.
3. Deficiency assessment – one made by the tax assessor himself whereby the
correct amount of the tax is determined by the examination or investigatio. The
liability is determined and is thereafter assessed for the following reasons: a. the
amount ascertained exceeds that which is shown as the tax by the taxpayer in
his return b. no amount of tax is shown in the return c. the taxpayer did not file
any return at all.
4. Erroneous assessment – one wherein the assessor has the power to assess but
errs in the exercise of the power.
What are the Principles governing Tax Assessments?
1. Assessments are prima facie presummed correct and made in good faith.
2. Assessment should be based on actual facts.
3. Assessment is discretionary on the part of the Commissioner to assess taxes
may be delegated.
4. Assessments must be directed to the right party.
What are the Means Employed in conducting Tax Assessments?
1. Examination of tax returns.
 2. Use of the best evidence obtainable.
3. Inventory taking, surveillance and use of presumptive gross sales and receipts
4. Termination of taxable period
5. Prescription of real property value
6. Examination of bank deposits to determine the correct amount of the gross
estate
7. Accreditation and registration of tax
8. Prescription of additional procedural or documentary requirements
How is the Process of Tax Assessment Conducted?
The following is the procedure in tax assessments:
1. Issuance of LOA to BIR Revenue Officers
2. Documentation and Issuance of Subpoena Duces Tecum in case of failure to
provide necessary documents.
3. Preliminary Findings or Informal Conference
4. Preliminary Assessment Notice
5. Final Assessment Notice
6. BIR Final Resolution if there is a protest to the assessment.
7. CTA in an appeal if protest is lost in the administrative level. In case you lose in
the CTA-Division, you may file a Motion for Reconsideration with the CTA en
banc.
8. SC - Division if you lose the MR in the CTA en banc. Should the appeal to the
SC-Division lose, you can file an MR with the SC en banc.
9. Finality and Settlement depending on the decision of the SC en banc.

Sources:
http://taxacctgcenter.org/handling-bir-tax-audit-in-the-philippines/
https://www.bir.gov.ph/index.php/rulings-and-legal-matters/guide-to-philippines-tax-law-
research.html