| (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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| Source Note: The provisions of this §3.584 adopted to be effective January 1, 2008, 32 TexReg 10022; amended to be effective January 1, 2009, 33 TexReg 10502; amended to be effective December 31, 2009, 34 TexReg 9469; amended to be effective December 8, 2016, 41 TexReg 9625; amended to be effective September 4, 2019, 44 TexReg 4741 |
