Texas Comptroller Implements a "Tax Amnesty Program," But Is This the Best Option for All Taxpayers?

Starting today, May 1, 2018 through June 29, 2018, the State of Texas Comptroller’s Office will run its “Texas Tax Amnesty Program” which offers relief from tax-related penalties and interest for certain taxpayers. But before participating in that program, taxpayers may want to consider whether the Comptroller’s existing voluntary disclosure program provides a better option for them.

According to the Texas Comptroller’s website, the Texas Tax Amnesty Program will, under certain circumstances, provide delinquent taxpayers with relief from penalties and interest on tax due. If a taxpayer has been notified that a period or periods are scheduled for an audit review, or if they are already under audit review, then those periods are not eligible for the Amnesty Program. The Amnesty Program also does not apply to accounts which have been certified to the Office of the Attorney General, accounts which are presently in litigation or accounts which have been reduced to judgment. Additionally, the Amnesty Program doesn’t apply to local motor vehicle tax, IFTA taxes, PUC gross receipts assessments or unclaimed property payments.

Taxpayers eligible to participate in the Amnesty Program include those who: (i) did not file a required return or report originally due before January 1, 2018; or (ii) underreported taxes or fees due for any reason, such as erroneously claiming credits or deductions. The Texas Comptroller’s website describes the Amnesty Program as a “limited amnesty” available May 1 through June 29, 2018, for reports originally due before Jan. 1, 2018.

To qualify for waiver of penalties and interest under the Amnesty Program, the Comptroller requires that taxpayers file the appropriate return or report, along with a check or money order for the full amount of tax owed. Additionally, the word “Amnesty” must be written on the top of the taxpayer’s filing.

There are also two important restrictions on a taxpayer’s ability to file a return under the Amnesty Program. First, the Comptroller has stated that in order to be eligible for relief under the Amnesty Program, the full amount of taxes or fees owed must be paid with the filing. Second, all returns and payments must be made via paper mailed to the Comptroller. Specifically, the Comptroller has stated that electronic filings will not facilitate the waiver of penalties and interest under the Amnesty Program.

Additional information regarding the Texas Comptroller’s Amnesty Program is available on the Texas Comptroller’s website at https://comptroller.texas.gov/taxes/publications/96-576.php. Any taxpayer wanting to participate in the Amnesty Program should review information on the Comptroller’s website carefully.

In addition, before participating, a taxpayer may want to consider whether the Texas Comptroller’s voluntary disclosure program, rather than the Amnesty Program, may be more beneficial. The Texas Comptroller has a voluntary disclosure program that provides certain benefits to participating taxpayers who qualify. One of those benefits, at a very general level, provides relief from liability for tax, penalties and interest for periods that are more than four years old (other than with respect to tax collected not remitted) for qualifying taxpayers. The Amnesty Program does not appear to provide the same relief for periods that more than four years old. Additionally, taxpayers unable to pay the full amount as required under the Amnesty Program might qualify for a limited installment payment agreement under the voluntary disclosure program, depending on the facts. Information regarding the Texas Comptroller’s voluntary disclosure program is available in Comptroller Publication 96-576 (March 2007) available at https://comptroller.texas.gov/taxes/publications/96-576.php.

If you have questions related to this blog post or would like more information regarding the Texas Tax Amnesty Program or the Texas Comptroller’s voluntary disclosure program, please feel free to contact David Colmenero at (214) 749-2462 or dcolmenero@meadowscollier.com or Alex Pilawski at 214-749-2414 or apilawski@meadowscollier.com.