34 Tex. Admin. Code § 3.5 - Waiver of Penalty or Interest
(a) The comptroller
has discretion to settle penalty or interest on a tax liability if the
comptroller determines that the taxpayer exercised reasonable diligence to
comply with the tax laws of this state. In determining whether a taxpayer has
exercised reasonable diligence to comply with the tax laws of this state, the
Audit Division and Revenue Accounting Division will consider the factors set
out in subsections (b) and (c), respectively.
(b) Procedure for requesting waiver, audits.
(1) Penalty or interest on an audit liability
may be waived if the taxpayer exercised reasonable diligence to comply with the
tax laws of this state. A request to waive penalty or interest will be presumed
in all cases governed by this subsection.
(2) The comptroller has delegated to the
Audit Division the initial authority to waive penalty or interest or both in
appropriate cases. At the conclusion of an audit and during the exit
conference, the taxpayer will be told whether any penalty or interest will be
waived. At this conference the taxpayer may request that the Audit Division
reconsider the decision on penalty or interest waiver.
(3) When reviewing a request for penalty
waiver, the Audit Division will consider the following factors:
(A) the taxpayer's audit history, including,
but not limited to, the errors identified in prior audits;
(B) the tax issues involved;
(C) whether a change in comptroller policy
occurred during the audit period;
(D) whether changes in the law took effect
during the audit period;
(E) the
size and sophistication of the taxpayer;
(F) whether tax was collected but not
remitted;
(G) whether returns were
timely filed;
(H) the completeness
of the taxpayer's records;
(I) the
taxpayer's efforts to comply with the recordkeeping requirements of this state,
such as maintaining an accrual system for taxable purchases;
(J) delinquencies in other taxes;
(K) reliance on advice provided by the
comptroller's office pursuant to §
3.10(c) of this
title (relating to Taxpayer Bill of Rights); and
(L) the error rate in the current
audit.
(4) When
reviewing a request for interest waiver, the Audit Division will consider the
factors enumerated in subsection (e) of this section.
(5) The taxpayer will be advised of the
acceptance or rejection of the request for waiver of penalty or interest in the
audit cover letter sent with the copy of the audit schedules.
(6) If a taxpayer's request for waiver is
denied at the audit level, the taxpayer may raise the issue as a contested case
matter during either a refund or redetermination hearing, or during an
independent audit review conference under §
3.10(e)(4) of
this title.
(c)
Procedure for requesting waiver, non-audit.
(1) The comptroller has delegated to the
Revenue Accounting Division the initial authority to waive penalty or interest
or both on return and report liabilities. Penalty or interest on a non-audit
liability may be waived if the taxpayer exercised reasonable diligence to
comply with the tax laws of this state.
(2) A written request stating the reasons
penalty or interest or both should be waived must be sent to the comptroller's
Revenue Accounting Division accompanied by supporting documentation. A single
waiver request may address the penalty or interest or both imposed on one
annual return or report period, two quarterly returns or report periods, or six
monthly returns or report periods. The comptroller may require the production
of any additional documentation necessary to evaluate a request.
(3) When reviewing a penalty waiver request
under this subsection, the Revenue Accounting Division will consider the
following factors regarding a taxpayer's account and will inform the taxpayer
of the division's decision to accept or reject part or all of the penalty
waiver request:
(A) whether the taxpayer is
current in the filing of all returns;
(B) whether the taxpayer is current in the
payment of all taxes and fees due the state;
(C) whether penalty has been waived on other
occasions for any tax type;
(D) why
any previous penalty waiver requests were granted or denied;
(E) whether the taxpayer has a good record of
timely filing and paying past returns;
(F) the size and sophistication of the
taxpayer;
(G) whether advanced
collection actions were initiated on the liability with respect to which the
waiver is requested;
(H) whether
multiple liabilities are included in the waiver request; and
(I) whether the taxpayer has taken the
necessary steps to correct the problem for future filings.
(4) When reviewing an interest waiver request
under this subsection, the Revenue Accounting Division will consider the
factors enumerated in subsection (e) of this section and will inform the
taxpayer of the division's decision to accept or reject all or part of the
interest waiver request.
(5) A
taxpayer may request an administrative appeal with the Revenue Accounting
Division of a denial of all or part of a waiver request within ten calendar
days from the date of written notification of the denial. Such a request for an
administrative appeal must be in writing and must state the reasons the
taxpayer disagrees with the denial of the waiver. New or additional
documentation upon which the taxpayer relies for support should be submitted
with the written request for an administrative appeal.
(6) The taxpayer will be sent written
notification from the Revenue Accounting Division of the disposition of the
appeal within 30 days of either the comptroller's receipt of the request for an
appeal or the comptroller's receipt of all additional information requested
from the taxpayer in relation to the appeal.
(7) If a taxpayer's request for waiver is
denied by the Revenue Accounting Division, the taxpayer may raise the issue as
a contested case matter during either a refund or redetermination
hearing.
(d) Review of
penalty waiver. When reviewing the Audit Division's denial of a penalty waiver
request during an independent audit review conference under §
3.10(e)(4) of
this title, the independent audit reviewer will consider the factors enumerated
in subsection (b)(3) of this section. When reviewing the Audit Division's
denial of a penalty waiver request in a contested case, the comptroller will
consider the factors enumerated in subsection (b)(3) of this section. When
reviewing the Revenue Accounting Division's denial of a penalty waiver request
in a contested case, the comptroller will consider the factors enumerated in
subsection (c)(3) of this section.
(e) Interest. When reviewing an interest
waiver request under subsection (b) or (c) of this section, in a contested
case, or during an independent audit review conference under §
3.10(e)(4) of
this title, the following factors regarding a taxpayer's account will be
considered:
(1) undue delay caused by
comptroller personnel;
(2) reliance
on advice provided by the comptroller's office pursuant to §
3.10(c) of this
title; and
(3) natural
disasters.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.