In the Philippine tax landscape, a Bureau of Internal Revenue (BIR) audit or investigation is a rigorous process governed by specific procedural rules. When a taxpayer decides to change their registered business address while an audit is ongoing—whether through a Letter of Authority (LOA), a Tax Verification Notice (TVN), or a Mission Order—it introduces a layer of legal complexity.

Understanding the intersection between Revenue Regulations (RR) and the National Internal Revenue Code (NIRC) is vital to ensuring that a relocation does not lead to charges of tax evasion or "flight" to avoid assessment.

1. The Statutory Requirement: Notice of Change

Under Section 236 of the NIRC and RR No. 5-2005, every registered taxpayer is required to notify the BIR of any change in their registration information, including a change in business address.

Timeline: The taxpayer must update their registration (BIR Form 1905) within ten (10) days from the date of change.
The "Transfer" Rule: For businesses moving across the jurisdiction of different Revenue District Offices (RDOs), the taxpayer must first settle all open cases or "stop-filer" issues at the old RDO before the registration can be fully transferred to the new RDO.

2. Jurisdiction and the "Existing Audit" Rule

The most critical issue during an audit is which RDO maintains jurisdiction over the case. As a general rule:

Jurisdiction follows the office that issued the Letter of Authority.

If an audit has already commenced (i.e., an LOA has been served), the RDO that issued the LOA retains the authority to finish the investigation and issue the assessment, even if the taxpayer physically moves to a different city or province. The taxpayer cannot "escape" an audit by moving to a more "lenient" district; the original investigating team remains authorized to conclude the proceedings.

3. Procedures for Address Changes During Audit

If a move is necessary while an investigation is pending, the taxpayer must follow these steps to avoid penalties:

Filing Form 1905: File the application for registration update at the old RDO.
Submission of Documents: Provide proof of the new address (e.g., Lease Contract, Mayor’s Permit, or Transfer of Business Location Certificate).
Inventory Stock-Taking: If the business involves physical inventory, the BIR may require a physical inventory count at the old location before the move to ensure no assets are being hidden.
Surrender of Invoices/Receipts: The taxpayer may need to have their remaining unused official receipts/invoices "stamped" or surrendered for cancellation and apply for new ones bearing the new address (Authority to Print or ATP).

4. Legal Consequences of Unannounced Relocation

Relocating without notifying the BIR—especially during an audit—is highly risky and may lead to the following legal repercussions:

A. Presumption of Fraud or Intent to Evade

Under Section 222 of the NIRC, the prescriptive period for assessment is usually three years. However, if the BIR determines there is "fraud or intent to evade tax," the prescriptive period is extended to ten (10) years. Abandoning a registered address during an audit is often cited by the BIR as prima facie evidence of intent to evade.

B. Jeopardy Assessments

If the BIR finds that a taxpayer is "retiring from business, or is removing his property therefrom, or performing any act tending to obstruct the proceedings," the Commissioner may issue a Jeopardy Assessment. This allows the BIR to assess and collect taxes immediately without the usual waiting periods.

C. Constructive Service of Notices

If the BIR attempts to serve a Preliminary Assessment Notice (PAN) or a Final Assessment Notice (FAN) at the registered address and finds the taxpayer has moved without notice, the service is considered valid under RR No. 18-2013. The notice will be served via "Constructive Service," and the taxpayer may lose their right to protest, leading to the assessment becoming final, executory, and demandable.

D. Criminal Liability

Failure to obey the rules on registration updates can lead to criminal prosecution under Section 255 (Failure to File Return, Supply Correct Information, etc.) and Section 275 (Violations of Other Provisions of the Code) of the NIRC.

5. Handling the LOA Transfer

In rare cases where the move is permanent and involves a total shift in operations, the taxpayer may request a transfer of the audit case to the new RDO. However, this is at the discretion of the BIR. Usually, the old RDO will finish the audit, and once the "Certificate of No Outstanding Tax Liability" is issued, the registration transfer is finalized.

Summary of Best Practices

Transparency: Formalize the move through BIR Form 1905 immediately.
Continuity: Designate a point person to receive BIR correspondence at the old address until the transfer is officially approved.
Documentation: Keep a receiving copy of the notice of move to prove "good faith" and prevent allegations of flight or fraud.
Coordination: Maintain communication with the Revenue Officer (RO) assigned to the case to ensure they are aware of the new location for any required field audits or book inspections.