taxes

Penalty Waivers

Waiver Requests for Late Reports and Payments

The Comptroller's Taxpayer Bill of Rights includes the right to request a waiver of penalties. You can use our online form to request a waiver of penalties and/or interest that was assessed because you filed or paid a tax report late.

In accordance with Rule 3.5, we consider the following factors when reviewing a waiver request.

Is the business current in filing and paying all state taxes?

We will not grant a waiver unless all reports have been filed and all tax due has been paid. You do not have to pay the penalty amount for which you are requesting a waiver, but if the waiver is denied, collection actions will continue. However, if you choose to pay the penalty and the waiver is granted, you will be issued a refund for the penalty you paid.

Has the business received a waiver in the past two years?

If so, your business is not eligible to be considered for a waiver at this time unless there are extenuating circumstances.

How does the number of report periods affect the request for waiver of penalty?

If the business qualifies for a waiver, the maximum number of report periods eligible for a waiver of penalty would be:

  • One annual report period,
  • Two quarterly reports or
  • Six monthly report periods.

If you failed to file multiple reports or found an error in your records and wish to voluntarily file or amend multiple past due reports that exceed the maximum allowed within the above guidelines, you may qualify for waiver of penalties based on a "Voluntary Disclosure Agreement". This type of request should be submitted directly to the Business Activity Research Team (BART) in Audit Headquarters. Additional details on this process are available in publication 96-576, Voluntary Disclosure Agreements.

Is the request for a filing period that is within legal timelines (statute of limitations)?

The statute of limitations is generally within four years from the date the tax became due and payable. We cannot grant a waiver period outside the statute of limitations.

Have you taken steps to help ensure you will file and pay on time in the future?

If you have, tell us about these steps in your waiver request.

If the business is registered with the Secretary of State, is the registration active?

We cannot grant a waiver to a Texas business with an inactive registration.

If you believe you are eligible to request a waiver, or if you have extenuating circumstances, complete Form 89-224, Request for Waiver of Penalty for Late Report and/or Payment (PDF), or Form 89-225, Request for Waiver of Penalty for Failure to File and/or Pay Electronically (PDF). Google Chrome users: follow the Adobe plug-in instructions to ensure the information entered on your waiver request form displays and calculates correctly.

Waiver Requests for Audit-Related Liabilities

When we conduct an audit examination, we presume you have requested waiver of penalty and interest, so you do not need to request a waiver. The letter we send with the audit package will include our decision on the waiver. Penalty waivers are usually limited to periods originally filed in a timely manner. If you disagree with our decision, you can request a redetermination hearing.

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