Does Sec. 5 allow inquiry into bank deposits?

Does Sec. 5 allow inquiry into bank deposits?

• A. Yes, bank deposits can be examined
• B. Only with a court order
• C. No, the BIR's power does not allow examination of bank deposits because of bank secrecy
• D. It may be allowed only for foreign accounts

Answer: (C)

Bank secrecy protects the details of a person’s bank deposits from disclosure. Section 5 does not override that protection, so the BIR cannot require or rely on this section to examine bank deposits. In practice, the BIR’s audit powers focus on the taxpayer’s books and records that the person themselves maintains or files, not on bank deposit records that are shielded by bank secrecy. Only through a separate legal mechanism (such as a specific statutory provision or a court order) could such information be disclosed, which is not described by this section. That’s why the correct view is that bank deposits cannot be examined under this rule due to bank secrecy.

Bank secrecy protects the details of a person’s bank deposits from disclosure. Section 5 does not override that protection, so the BIR cannot require or rely on this section to examine bank deposits. In practice, the BIR’s audit powers focus on the taxpayer’s books and records that the person themselves maintains or files, not on bank deposit records that are shielded by bank secrecy. Only through a separate legal mechanism (such as a specific statutory provision or a court order) could such information be disclosed, which is not described by this section. That’s why the correct view is that bank deposits cannot be examined under this rule due to bank secrecy.