|(a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Managed audit--A review and analysis of invoices,
checks, accounting records, or other documents or information conducted
by a taxpayer to determine a taxpayer's liability for tax under Tax
Code, Chapter 201 (Gas Production Tax).
(2) Taxpayer--Any person required to file a report
with the comptroller under Tax Code, §201.203 (Producer's Report)
or §201.2035 (First Purchaser's Report).
(b) Managed audits. The comptroller may authorize taxpayers
that meet certain requirements to perform managed audits.
(1) A taxpayer who wishes to participate in a managed
audit must request authorization from the comptroller's office to
conduct a managed audit under this section. Authorization will only
be granted as part of a written agreement between the taxpayer and
the comptroller's office. The agreement must:
(A) be signed by an authorized representative of the
comptroller and the taxpayer; and
(B) specify the period to be audited and the procedure
to be followed.
(2) In determining whether to authorize a managed audit,
the comptroller may consider:
(A) the taxpayer's history of tax compliance, including:
(i) timely filing of reports;
(ii) timely payment of all taxes and fees due to the
(iii) prior audit history;
(iv) delinquency in other taxes;
(v) correction of problems identified in prior audits;
(vi) whether a penalty waiver had been denied on prior
occasions and the reason for denial;
(B) whether the taxpayer has sufficient time and resources
to conduct the audit;
(C) the sufficiency and availability of the taxpayer's
(D) the taxpayer's ability to pay any liability arising
as a result of the audit; and
(E) any other factor the comptroller determines is
(3) The decision to authorize or not authorize a managed
audit rests solely with the comptroller.
(4) A managed audit may be limited to one or more factors
affecting a taxpayer's liability for tax under this chapter, including:
(A) gross value of gas produced;
(B) exempt interest;
(C) marketing costs of gas produced;
(D) gas used to power operations at a well or lease;
(E) tax reimbursement paid by a purchaser to a producer.
(5) Before the audit is finalized, the comptroller
may examine records that the comptroller determines are necessary
to verify the results.
(6) Unless the audit or information reviewed by the
comptroller under this subsection discloses fraud or willful evasion
of the tax, the comptroller may not assess a penalty and may waive
all or part of the interest that would otherwise accrue on any amount
identified to be due in a managed audit. This does not apply to any
amount collected by the taxpayer that was a tax or represented to
be a tax but that was not remitted to this state.
(7) Except as provided by Tax Code, §111.104(f)
(Refunds), a taxpayer is entitled to a refund of any tax overpayment
disclosed by a managed audit under this section.
(8) This subsection applies to audits initiated on
or after September 1, 2019.
(c) Determination of overpaid amounts by sampling marketing
(1) A taxpayer may sample marketing cost transactions
provided that the sampling method is approved by the comptroller.
The taxpayer must record the method and make available on request
by the comptroller the records on which the computation is based.
(2) A taxpayer may obtain a reimbursement of an overpayment
identified by sampling under this subsection by amending all relevant
(A) taking a credit on one or more reports filed under
Tax Code, §201.203 or §201.2035; or
(B) filing a claim for refund with the comptroller
within the statute of limitations specified by Tax Code, §111.107
(When a Refund or Credit is Permitted) and Chapter 111, Subchapter
(3) This subsection applies to refund claims filed
on or after September 1, 2019.