| date of payment at the applicable statutory rate).
(B) A petition for redetermination must be filed within
60 days after the date the notice of determination is issued, or the
redetermination is barred.
(C) A decision on a petition for redetermination becomes
final at the time a decision in a contested case is final under Government
Code, Chapter 2001. The amount of a determination is due and payable
20 days after the decision is final. If the amount of the determination
is not paid within 20 days after the day the decision becomes final,
a penalty under Tax Code, §111.0081, of 10% of the tax assessed
will be added. Using the previous example, on the 21st day after the
decision is final, $1,200 plus interest would be due (i.e., $1,000
tax, $100 initial penalty, $100 additional penalty and the applicable
accrued interest).
(4) A jeopardy determination is final 20 days after
the date on which the service of the notice is completed unless a
petition for redetermination is filed before the determination becomes
final. Service by mail is complete when the notice is deposited with
the United States Postal Service. The amount of the determination
is due and payable immediately. If the amount determined is not paid
within 20 days from the date of service, a penalty, under Tax Code, §111.022
(Jeopardy Determination), of 10% of the amount of tax and interest
assessed will be added.
(5) If the comptroller determines that a taxable entity
exercised reasonable diligence to comply with the statutory filing
or payment requirements, the comptroller may waive penalties or interest
for the late filing of a report or for a late payment. The taxable
entity requesting waiver must furnish a detailed description of the
circumstances that caused the late filing or late payment and the
diligence exercised by the taxable entity in attempting to comply
with the statutory requirements. See §3.5 of this title (relating
to Waiver of Penalty or Interest) for additional information.
(6) If a taxable entity fails to comply with Tax Code, §171.212
(Report of Changes to Federal Income Tax Return), the taxable entity
is liable for a penalty of 10% of the tax that should have been reported
and had not previously been reported to the comptroller under Tax
Code, §171.212. This penalty is in addition to any other penalty
provided by law.
(f) Amended reports. In filing an amended report, the
taxable entity must type or print on the top of the report the phrase
"Amended Report." The report should be forwarded with a cover letter
of explanation, with enclosures necessary to support the amendment.
Applicable penalties and interest must be reported and paid along
with any additional amount of tax shown to be due on the amended report.
(1) A taxable entity may file an amended report for
the purpose of correcting a mathematical or other error in a report,
for the purpose of supporting a claim for refund, or to change its
method of computing margin or, if qualified, to use the E-Z Computation.
(2) A taxable entity that has been audited by the Internal
Revenue Service must file an amended franchise tax report within 120
days after the Revenue Agent's Report (RAR) is final, if the RAR results
in changes to taxable margin reported for franchise tax purposes.
An RAR is final when all administrative appeals with the Internal
Revenue Service have been exhausted or waived. An administrative appeal
with the Internal Revenue Service does not include an action or proceeding
in the United States Tax Court or any other federal court.
(3) A taxable entity whose taxable margin is changed
as a result of an audit or other adjustment by a competent authority
other than the Internal Revenue Service must file an amended franchise
tax report within 120 days after the adjustment is final. An adjustment
is final when all administrative or other appeals have been exhausted
or waived. For the purposes of this section, a competent authority
includes, but is not limited to, the United States Tax Court, United
States District Courts, United States Courts of Appeals, and United
States Supreme Court.
(4) A taxable entity must file an amended franchise
tax report within 120 days after the taxable entity files an amended
federal income tax return that changes the taxable entity's taxable
margin. A taxable entity is considered to have filed an amended federal
income tax return if the taxable entity is a member of an affiliated
group during a period in which an amended consolidated federal income
tax return is filed.
(5) A final determination resulting from an Internal
Revenue Service administrative proceeding (including an audit), or
a judicial proceeding arising from an administrative proceeding, that
affects the amount of franchise tax liability must be reported to
the comptroller before the expiration of 120 days after the day on
which the determination becomes final. See Tax Code, §111.206
(Exception to Limitation: Determination Resulting from Administrative
Proceeding).
(6) Because the 10% penalty provided for in Tax Code, §171.212
only applies to deficiencies, failure to file an amended return in
which a refund would result will not cause a 10% penalty to be imposed.
(g) Comptroller audit. During the course of an audit
or other examination of a taxable entity's franchise tax account,
the comptroller may examine financial statements, working papers,
registers, memoranda, contracts, corporate minutes, and any other
business papers used in connection with its accounting system. In
connection with the examination, the comptroller may also examine
any of the taxable entity's officers or employees under oath.
(h) Payment of determination. The payment of a determination
issued to a taxable entity for an estimated tax liability shall not
satisfy the reporting requirements set forth in Tax Code, Chapter
171, Subchapter E, concerning reports and records.
(i) Information report. Each taxable entity on which
the franchise tax is imposed must file an information report.
(1) Public information report. For a taxable entity
legally formed as a corporation, limited liability company, limited
partnership, professional association, or financial institution, a
public information report as described in Tax Code, §171.203
(Public Information Report), is due at the same time each initial
and annual, including the first annual, report is due. An authorized
person must sign the public information report on behalf of the taxable
entity under a certification that:
(A) all information contained in the report is true
and correct to the best of the authorized person's knowledge; and
(B) a copy of the report has been mailed to each person
named in the report who is an officer, director, or manager and who
is not employed by the taxable entity or a related (at least 10% ownership)
taxable entity on the date the report is filed.
(C) A report that is filed electronically complies
with the signature and certification requirements of this provision.
(2) Ownership information report. Taxable entities
not required to file a public information report must file an ownership
information report as described in Tax Code, §171.201 (Initial
Report) and §171.202 (Annual Report) is due at the same time
each initial and annual, including the first annual, report is due.
(3) Failure to file or sign a public information report
or ownership information report shall result in the forfeiture of
corporate or business privileges as provided by Tax Code, §171.251
(Forfeiture of Corporate Privileges) and §171.2515 (Forfeiture
of Right of Taxable Entity to Transact Business in this State). If
the corporate or business privileges are forfeited, each officer or
director of the taxable entity may be liable for each debt of the
taxable entity that is created or incurred in Texas after the date
on which the report is due and before the corporate or business privileges
are revived, as provided by Tax Code, §171.255 (Liability of
Directors and Officers).
(4) The provisions of paragraph (3) of this subsection,
concerning forfeiture of corporate privileges do not apply to a banking
taxable entity or a savings and loan association, as defined in Tax
Code, §171.0001 (General Definitions).
(5) For purposes of this subsection:
(A) authorized person means, in the case of a corporation,
an officer, director or other authorized person of the corporation;
(B) authorized person means, in the case of a limited
liability company, a member, manager or other authorized person of
the limited liability company;
(C) authorized person means, in the case of a limited
partnership, a partner or other authorized person of the partnership;
(D) director includes a manager of a limited liability
company, a general partner in a limited partnership and a general
partner in a partnership registered as a limited liability partnership;
(E) authorized person also includes a paid preparer
authorized to sign the report.
(6) Taxable entities that are members of a combined
group and do not have nexus in Texas are not required to file an ownership
information report or a public information report.
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