Tax Administration Fishbowl Practice Test

The key idea here is that the CIR’s power to subpoena third parties is limited to tax-related matters and must follow formal procedures. A third party can be required to appear or to produce books, records, or papers when the information is needed to determine, assess, or enforce a tax liability. But this authority isn’t open-ended or global: it only covers matters within the BIR’s tax jurisdiction, and it must be exercised through a properly issued written summons that is properly served. The process is designed to safeguard rights by ensuring there is a written record, giving the targeted party a chance to respond or challenge, and applying penalties only for appropriate noncompliance. So the correct statement reflects both the jurisdictional limit and the necessity of procedural safeguards, which is why it’s the best choice.