We Help Clients Dispute Texas Tax Assessments
You probably found this page as the State of Texas assessed a tax against you or your business, and you are trying to figure out how to dispute the tax assessment. This may include an assessment of Texas franchise tax, sales and use tax, property tax, mixed beverage or mixed beverage gross receipt taxes, international fuel tax, cigarette tax, hotel occupancy tax, or others.
The Texas Audit Process
The audit process in Texas differs from the way the IRS conducts audits. Here are a few of the more notable differences:
- The audit is usually conducted by the Texas Comptroller of Public Accounts.
- These state auditors are allowed by law to make estimates and, in many cases, presume everything is taxable unless you show otherwise.
- There are deadlines that have to be met during the audit process, rather than at the end of the audit.
The Independent Audit Review
You can request an independent audit review conference to dispute the proposed tax prior to the time the tax is assessed. This is available after the preliminary audit report and exit conference but before the issuance of the Texas Notification of Audit Results. This conference is handled by the auditor and their manager and if this is unsuccessful, a Reviewer who functions much like a mediator. The Reviewer will issue a report and if you are not successful, this will be issued just before the assessment is made.
The Administrative Redetermination
You can also request an administrative redetermination. This is available after the state issues the Notification of Audit Results (or Notice of Tax Due). This notice sets out the timeframe for requesting the redetermination–which is now usually 60 days. A timely response is required to keep this pre-payment option open. The state may issue a written opinion if it disagrees with your position. You then have to respond to this opinion with your own arguments, evidence, etc. The case may then be referred to the State Office of Administrative Hearings for an Administrative Law Judge to consider. After a hearing (if requested), the ALJ will issue a proposal for decision. The decision will include findings of fact and conclusions of law. It will also include the legal reasoning and other analyses considered by the ALJ. The Comptroller can accept or reject the decision. If approved, this is the end of the administrative process and the tax and interest, if any, are then due and payable. You may also file a motion for rehearing and, if successful, get a second hearing. The motion for rehearing is usually a prerequisite to filing suit against the state.
The Suit for Refund
You can also pay the tax and sue for a refund. This may be done after the administrative redetermination process described above or, if you opted to skip the process above, after you pay the tax under protest. A suit usually has to be filed within four years. These cases usually have to be filed in Travis County District Court.
Hire a Texas Tax Dispute Attorney
The process for disputing taxes in Texas is nuanced and distinct in many respects. Our firm frequently assists taxpayers with state and local tax disputes, including audits, appeals, and litigation.
Please call us at (713) 909-4906 or schedule an appointment to talk to a Texas state and local tax attorney.
State & Local Tax Articles
More state and local tax articles.