BIR Notice of Discrepancy: Reconcile the Findings Before Assessment

Direct answer

A Notice of Discrepancy calls for discussion of identified differences. It is not the protest stage for an FLD/FAN. Read the notice, preserve proof of receipt and reconcile each item under the applicable rules.

Confirm that the document is a NOD

First, confirm that the document is a Notice of Discrepancy under RR No. 22-2020. It gives the taxpayer an opportunity to explain the identified differences before the later assessment stages. An LOA, PAN, FLD/FAN or collection notice serves a different purpose.

Use the discussion period deliberately

RR No. 22-2020 provides that the discussion of discrepancies should not extend beyond 30 days from receipt of the NOD. This is not a universal response or appeal period for every BIR notice. Read the actual invitation and document requests, arrange the discussion and preserve written submissions and acknowledgments.

Build a reconciliation worksheet

If the issue is a numerical difference, explain it with the reconciliation and records. If the reconciliation is unfinished, identify what remains open without conceding an unresolved legal issue.

Prepare for the next document

The discussion may leave some items unresolved. Watch for a PAN or FLD/FAN and check the rules and deadlines for each. When a formal assessment arrives, consult the assessment protest guide. Assess the need for counsel against the deadline, complexity, exposure and quality of records rather than a fixed peso threshold.

Related assistance

For the next step, see BIR controversy counsel, BIR notice review. Engagement depends on conflict checking and an agreed scope.

Sources and further reading

• RR No. 22-2020, Notice of Discrepancy
• NIRC, Section 228

Important

This article provides general information, not advice on a particular matter. The applicable law, documents, procedural events and facts must be checked. Reading it does not create an attorney-client relationship.