SECTION 3.10. Taxpayer Bill of Rights

(a) Purposes.

(1) Various state and federal laws that govern the comptroller's and taxpayers' responsibilities concerning the collection and payment of taxes and fees are addressed in other sections of this title. The Taxpayer Bill of Rights seeks to strike a balance and find ways to protect taxpayers' rights without interfering with the comptroller's responsibility to collect taxes and assess the accuracy of returns.

(2) The comptroller is legally required to establish a "Compact with Texans," which provides taxpayers with information about how customer service will be performed and monitored. This section explains the comptroller's customer service responsibilities and commitments to ensure that taxpayers receive the treatment and service to which they are entitled.

(b) Taxpayers are entitled to useful resources and prompt and accurate information that is provided in a professional manner.

(1) The comptroller's website, Window on State Government, will contain information that is well-organized and useful to help taxpayers locate answers to their questions. Taxpayers can also elect to receive email updates relating to agency policies and practices through Window on State Government.

(2) Comptroller staff will respond promptly to requests for information whether in person, by phone, or in writing.

(3) The comptroller will seek feedback from taxpayers to ensure that they are receiving prompt and accurate responses to requests for information and that agency staff performs in a courteous and professional manner.

(4) The comptroller will write rules, publications, forms, and information on the agency's website in plain English and will promptly update information to reflect changes in laws and agency policy. Upon request, the comptroller will make agency publications available in different formats to meet taxpayers' needs.

(5) The comptroller will maintain the State Tax Automated Research (STAR) system on the comptroller's website to provide taxpayers with an additional source of information. All private letter rulings, including information about rulings that have been revoked or modified, issued in accordance with §3.1 of this title (relating to Private Letter Rulings and General Information Letters) will be maintained on STAR.

(c) Detrimental reliance policy. The comptroller will give relief to a taxpayer who follows erroneous advice given to the taxpayer by an agency employee. The taxpayer, however, must have provided complete and accurate information to the agency employee. The comptroller will give relief only if that taxpayer, and not a third party, was harmed by following the erroneous advice. See also §3.1 of this title.

(1) Unless otherwise provided by this section, a taxpayer must affirmatively prove and provide records as requested by the comptroller to show that it meets all four parts of the following test:

(A) the substance of the information or advice and its direct communication to the taxpayer must be in writing in accordance with §3.1 of this title;

(B) the taxpayer followed the information or advice;

(C) the taxpayer gave sufficient information to have resulted in correct advice and did not misrepresent information or withhold or conceal information that would affect the advice; and

(D) the taxpayer has suffered, or will suffer, harm based on the erroneous advice unless the comptroller provides relief to the taxpayer.

(2) Sales and use taxes under Tax Code, Chapter 151. Both sellers and purchasers of taxable items can receive relief based on detrimental reliance. Sellers of taxable items may receive waivers of tax, penalty, and/or interest. The following additional guidelines will be used when a taxpayer has proven detrimental reliance related to the purchase of taxable items, provided the taxpayer meets the first three parts of the test stated in paragraph (1)(A) - (C) of this subsection and provided records as requested by the comptroller:

(A) all penalties and interest will be waived;

(B) tax will be waived on materials directly utilized and consumed in the performance of a service for, or sale of a product to, an unrelated third party;

(C) tax can only be waived for indirect materials or services when the taxpayer can prove that these items were used in computing prices or bids;

(D) tax on assets or tools directly used in the performance of services or sales may be partially exempted based upon their purchase dates and remaining life of the assets. This presumes that prices can be increased on future sales. A taxpayer with a long term contract or fixed bid can substantiate a larger waiver. For the purposes of computing the remaining life and value of an asset, the comptroller will use a 48 month useful life and straight line depreciation. The taxpayer cannot use other methods of valuation; and

(E) special consideration for waiver will be made if a taxpayer can prove that the advice was used in a decision to locate facilities in Texas.

(3) The following persons shall receive waivers of a tax, charge or fee that was not collected, plus penalty, and/or interest, if all elements of detrimental reliance are proven as indicated by paragraph (1) of this subsection and documents are made available to the comptroller to verify such a claim:

(A) persons who must collect and remit the fee on the sale of batteries under Health and Safety Code,§361.138;

(B) persons who must collect and remit the emergency service fee under Health and Safety Code, §771.071;

(C) persons who must collect and remit the emergency service fee for wireless telecommunications under Health and Safety Code, §771.0711;

(D) retail sellers of prepaid 9-1-1 emergency service fee under Health and Safety Code, §771.0712;

(E) persons who must collect and remit the equalization surcharge under Health and Safety Code, §771.072;

(F) surplus lines licensees who must collect premium taxes from policyholders to remit to the state under Insurance Code, Chapter 225;

(G) persons who must collect and remit the Texas emissions reduction plan surcharge under Tax Code, §151.0515 or §152.0215;

(H) persons who sell or rent motor vehicles and who must collect and remit taxes under Tax Code, Chapter 152;

(I) persons who must collect and remit hotel occupancy taxes under Tax Code, Chapter 156;

(J) persons who sell boats and boat motors who must collect and remit taxes under Tax Code, Chapter 160;

(K) persons who must collect and remit the fireworks tax under Tax Code, Chapter 161; and

(L) persons who must collect and remit the fee on delivery of certain petroleum products under Water Code, §26.3574.

(4) Taxes, fees, and charges other than those identified in paragraphs (2) and (3) of this subsection. If a taxpayer proves detrimental reliance in relation to the taxes, fees, and charges administered by the comptroller other than those identified in paragraphs (2) and (3) of this subsection, the comptroller will only consider granting a waiver of penalty and/or interest for the period(s) covered by the report, audit, or assessment.

(d) The customer service liaison.

(1) The comptroller employs a customer service liaison to handle taxpayer complaints. The customer service liaison has the authority to determine if the complaint is valid and to work with staff to reach a resolution that is satisfactory to both the taxpayer and the agency. Certain matters are not within the authority of the customer service liaison to address, including disputes about the meaning of agency rules, disputes about taxability issues that are pending in the administrative hearings process or complaints about the law itself.

(2) Contact information for the customer service liaison will be prominently displayed on comptroller materials, including on the agency's website and webpage devoted to the Compact with Texans, and in telephone directories statewide.

(3) If taxpayers approach the Governor's Citizens Assistance Office with disagreements with or about employees, operations, or services at the comptroller's office, the customer service liaison will be notified and will take appropriate action.

(4) The customer service liaison is required by law to submit a biennial report to the legislature to track systemic problems and identify areas that can be improved.

(5) Complaints and concerns submitted to the customer service liaison will receive a response within 10 working days.

(e) The comptroller helps taxpayers comply with the law and protect their rights.

(1) Taxpayers who are not currently under audit or investigation and who come forward voluntarily to disclose their liability and pay taxes due may be eligible to have penalties and interest waived by entering into a Voluntary Disclosure Agreement. General information about these agreements is available on the comptroller's website.

(2) Information provided by taxpayers will be kept confidential to the extent allowed by law.

(3) Taxpayers may bring an attorney, accountant, or other representative to an audit conference and may also record the proceedings.

(4) Taxpayers may request a review of audit results by an independent audit reviewer and proceedings related to the review may occur at locations in Texas close to a taxpayer's primary place of business.

(5) Taxpayers have the right to request that staff from the Tax Policy Division be included in disputes and discussions about taxability issues when taxpayers are involved in an audit examination of any kind, or negotiating a voluntary disclosure agreement.

(6) The comptroller will not audit a person based on information provided in a request for a private letter ruling or general information letter under §3.1 of this title. However, if a person is otherwise selected for audit, the comptroller may review any letter or ruling received by that person to ensure compliance. Also, issuance of a letter or ruling does not prohibit the comptroller from auditing a person.

(f) The comptroller welcomes input from taxpayers and the business community in order to promote voluntary compliance.

(1) The comptroller welcomes suggestions from taxpayers on ways to improve the information and customer service the agency provides. Such suggestions can be submitted to the customer service liaison. See subsection (d) of this section.

(2) The comptroller will invite representatives and interested parties to participate in roundtable discussions on specific issues, or to learn about the needs and problems of a particular industry. The comptroller will review recommendations from these meetings internally, and will incorporate them into rules and procedures as appropriate. The comptroller will also consider comments and questions received from businesses, industry representatives, and others when developing rules and procedures. The comptroller circulates proposed amendments to existing rules and proposed new rules to a comptroller-appointed taxpayer advisory group to obtain their comments prior to filing with the Texas Register.

Source Note: The provisions of this §3.10 adopted to be effective September 5, 1999, 24 TexReg 6805; amended to be effective January 28, 2013, 38 TexReg 386