HB1937 - Relating to certain tax and fee collection procedures and taxpayer suits.

  89R2947 BEF-F     By: Craddick H.B. No. 1937       A BILL TO BE ENTITLED   AN ACT   relating to certain tax and fee collection procedures and taxpayer   suits.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 111.0041(c), Tax Code, is amended to   read as follows:          (c)  A taxpayer shall produce sufficient [ contemporaneous ]   records and supporting documentation appropriate to the tax or fee   for the transactions in question to substantiate and enable   verification of the taxpayer's claim related to the amount of tax,   penalty, or interest to be assessed, collected, or refunded in an   administrative or judicial proceeding.   Sufficient   [ Contemporaneous ] records and supporting documentation appropriate   to the tax or fee may include[ , for example, ] invoices, vouchers,   checks, shipping records, contracts, or other equivalent records,   such as electronically stored images of such documents, reflecting   legal relationships and taxes collected or paid.          SECTION 2.  Section 111.0081, Tax Code, is amended by   amending Subsection (c) and adding Subsection (d) to read as   follows:          (c)  The amount of a determination made under this code is   due and payable 20 days after a comptroller's decision in a   redetermination hearing becomes final.   Except as provided by   Subsection (d), if  [ If ] the amount of the determination is not paid   within 20 days after the day the decision became final, a penalty of   10 percent of the amount of the determination, exclusive of   penalties and interest, shall be added.           (d)     The penalty provided by Subsection (c) is abated with   respect to the disputed amount that is the subject of a timely filed   suit under Subchapter E, Chapter 112. If the amount determined to   be due in a final judgment in the suit is not paid within 20 days   after the day the judgment became final, a penalty of 10 percent of   the amount due, exclusive of penalties and interest, shall be   added.          SECTION 3.  Subchapter A, Chapter 111, Tax Code, is amended   by adding Section 111.0091 to read as follows:           Sec.   111.0091.     DISPUTING RESULTS OF MANAGED AUDITS: NOTICE   OF INTENT TO BYPASS REDETERMINATION PROCESS. (a) A person who   conducts a managed audit authorized by Section 151.0231 or 201.3021   may file with the comptroller a notice of intent to bypass the   redetermination process under Section 111.009. The notice of   intent must:                 (1)     be filed on or before the 60th day after the date   the comptroller issues a letter notifying the person of the results   of the managed audit;                 (2)  be in writing;                 (3)     assert the material facts and each specific legal   basis for disputing the results of the managed audit; and                 (4)     specify the amounts of the disputed underpayments   or overpayments contained in the report of the managed audit   results.           (b)     A person who files a notice of intent under Subsection   (a) may bypass the redetermination process under Section 111.009   and bring a suit under Subchapter D, Chapter 112, if:                 (1)     the person participated in a conference under   Subsection (c), in which case the suit must be filed on or before   the 60th day after the date the conference concludes or a later date   agreed to by the comptroller; or                 (2)     the comptroller does not provide notice in the   time required by Subsection (d) that a conference is required, in   which case the suit must be filed on or before the 90th day after the   date the notice of intent was filed.           (c)     The comptroller may require a conference between a   person who files a notice of intent under Subsection (a) and a   designated officer or employee of the comptroller to clarify any   fact or legal issue in dispute regarding the results of the managed   audit and to discuss the availability of additional documentation   that may assist in resolving outstanding issues regarding the   managed audit. The person who filed the notice of intent may amend   a material fact or legal basis described by Subsection (a)(3)   following the conference if the comptroller agrees in writing to   the amendment.           (d)     If the comptroller requires a conference under   Subsection (c), the comptroller shall notify the person of the   conference requirement not later than the 30th day after the date   the notice of intent under Subsection (a) was filed. The notice of   the conference requirement must be in writing and include a date and   time for the conference. The conference date provided in the notice   must be not later than the 90th day after the date the notice of   intent was filed.           (e)     The person who filed the notice of intent under   Subsection (a) may request to reschedule the conference date   provided in the notice under Subsection (d). The comptroller shall   make a good faith effort to accommodate the request. If the   comptroller and the person who filed the notice of intent do not   agree on or before the 90th day after the date the notice of intent   was filed to a rescheduled date for the conference, the person may   on or before the 120th day after the date the notice of intent was   filed rescind the notice of intent and petition the comptroller for   a redetermination under Section 111.009.           (f)     Except as provided by Subsection (e), a person who files   a notice of intent under Subsection (a) waives the person's right to   a redetermination under Section 111.009.          SECTION 4.  Section 112.052(d), Tax Code, is amended to read   as follows:          (d)  A taxpayer shall produce sufficient [ contemporaneous ]   records and supporting documentation appropriate to the tax for the   transactions in question to substantiate and enable verification of   a taxpayer's claim relating to the amount of the tax, penalty, or   interest that has been assessed or collected or will be refunded, as   required by Section 111.0041.          SECTION 5.  The heading to Subchapter D, Chapter 112, Tax   Code, is amended to read as follows:   SUBCHAPTER D. SUIT FOR TAX REFUND OR TO DISPUTE RESULTS OF MANAGED   AUDIT          SECTION 6.  Section 112.151(f), Tax Code, is amended to read   as follows:          (f)  A taxpayer shall produce sufficient [ contemporaneous ]   records and supporting documentation appropriate to the tax or fee   for the transactions in question to substantiate and enable   verification of a taxpayer's claim relating to the amount of the   tax, penalty, or interest that has been assessed or collected or   will be refunded, as required by Section 111.0041.          SECTION 7.  Subchapter D, Chapter 112, Tax Code, is amended   by adding Section 112.1511 to read as follows:           Sec.   112.1511.     SUIT TO DISPUTE RESULTS OF MANAGED AUDIT.     (a)   A person may sue the comptroller to dispute the results of a   managed audit conducted under Section 151.0231 or 201.3021 if the   person:                 (1)     has been issued a letter by the comptroller   notifying the person of the results of the managed audit; and                 (2)     is authorized to bring the suit under Section   111.0091(b).           (b)     The suit must be brought against both the comptroller   and the attorney general and must be filed in a district court.           (c)     The suit must be filed during the time provided by   Section 111.0091(b) or it is barred.           (d)     The amounts of the disputed underpayments or   overpayments contained in the report of the managed audit results   must be set out in the original petition.   A copy of the notice of   intent filed under Section 111.0091(a) must be attached to the   original petition filed with the court and to the copies of the   original petition served on the comptroller and the attorney   general.           (e)  A person may not intervene in the suit.           (f)     A taxpayer shall produce sufficient records and   supporting documentation appropriate to the tax or fee for the   transactions in question to substantiate and enable verification of   a taxpayer's claim relating to the amount of the tax, penalty, or   interest to be assessed, collected, or refunded, as required by   Section 111.0041, including the amounts of the disputed   underpayments or overpayments contained in the report of the   managed audit results.           (g)     After the comptroller has been timely served in a suit   that complies with this section, the comptroller and the attorney   general:                 (1)     are enjoined from collecting disputed   underpayments identified in Section 111.0091(a)(4) from the person   bringing the suit during the pendency of the suit; and                 (2)  are not enjoined from:                       (A)  asserting tax liens; or                       (B)     as an alternative to asserting tax liens,   requiring the person to provide security:                             (i)     in an amount sufficient to secure   payment of the entire disputed amount, including penalties and   accrued interest, that is the subject of the suit; and                             (ii)     in the form of a cash deposit filed   with the comptroller or paid into the registry of the court, a   surety bond, a letter of credit, or another form of guarantee.           (h)     Damages may be awarded under Chapter 65, Civil Practice   and Remedies Code, if the court determines that all or part of the   enjoined collection amounts under Subsection (g) were disputed   solely for delay.          SECTION 8.  Section 112.152, Tax Code, is amended to read as   follows:          Sec. 112.152.  ISSUES IN SUIT.  (a)  The only issues that may   be raised in a suit under this subchapter are, as applicable, the:                (1)  grounds of error contained in the motion for   rehearing; or                (2)  material facts and legal bases contained in the   notice of intent filed under Section 111.0091(a) or 111.106(a).          (b)  The suit applies only to a tax liability period   considered in the comptroller's decision or covered by the notice   of intent filed under Section 111.0091 or 111.106, as applicable.          SECTION 9.  Section 112.201, Tax Code, is amended by   amending Subsection (c) and adding Subsections (c-1) and (c-2) to   read as follows:          (c)  A person bringing a suit under this subchapter may pay   the disputed amounts as provided by Chapter 111. A disputed amount   that is not paid as provided by Chapter 111 and that is determined   to be due in a final judgment accrues penalties and interest as   provided by Chapter 111.           (c-1)   After the comptroller has been timely served in a suit   that complies with this subchapter, the comptroller and the   attorney general :                 (1)   are enjoined from collecting disputed amounts from   the [Text truncated for display. Full text available on Congress.gov.]