News and Insights

Texas Comptroller Releases Draft Revisions to Rules of Practice and Procedure

Tax Development Dec 08, 2016

The Texas Comptroller of Public Accounts (“Comptroller”) has issued draft versions of proposed revised rules of practice and procedure for contested cases. Generally speaking, the proposed revisions reflect recent changes in the law or codify the Comptroller’s current internal procedures. This is a summary of the proposed changes. These draft rules may be revised further before formal proposed rules are filed with the Texas Secretary of State.

34 Tex. Admin. Code § 1.4 (Concerning Representation and Participation)

  • Provides that a taxpayer must provide written authorization (such as a power of attorney) for a non-employee representative to appear on the taxpayer’s behalf in a contested case.
  • Provides that a party must identify a single “designated representative for notice” to whom pleadings, orders, notices, and other filings will be sent (if no one is designated, they will be sent to the individual who signed the Statement of Grounds).

34 Tex. Admin. Code § 1.8 (Concerning Resolution Agreements)

  • Renames the rule formerly entitled “resolution prior to issuance of a position letter” because it applies to resolution of contested cases at any time in the process.
  • Requires a “resolution agreement” to document agreed resolution of a contested case.
  • Prescribes the form and contents of a resolution agreement, including the following:
    • It must be in writing and signed by all parties;
    • It must specify the agreed adjustments or amount of refund due;
    • It must specify any waiver of penalty or interest; and
    • It must include the taxpayer’s withdrawal of the hearing request, acknowledgment that the case is resolved, and that no Comptroller’s Decision will be issued.
  • Prescribes procedures for resolution, including the following:
    • Comptroller staff will draft resolution agreements based on agency-approved forms;
    • Resolution agreements are effective and binding as of the date signed by all parties;
    • Resolution agreements will provide a due date to remit any tax due or provide that remittance is due 30 days after the Comptroller issues a revised statement of account reflecting the agreements; and
    • Resolution agreements may be amended to correct errors.
  • Provides that the Comptroller may designate a Tax Dispute Officer to consider settlement proposals and provides that contested case deadlines are suspended in cases under review by the Tax Dispute Officer.

34 Tex. Admin. Code § 1.18 (Concerning Filing Documents)

  • Adds new filing procedures with the Office of Special Counsel for Tax Hearings, which apply after the exceptions period has ended following issuance of a Proposal for Decision and transfer of jurisdiction from the State Office of Administrative Hearings (SOAH) to the Comptroller.
  • Provides the Office of Special Counsel’s mailing address, fax number, email address, and hand-delivery address.
  • Provides that the date of filing a document with the Office of Special Counsel is the date on which the document is “received” and states that:
    • Mail is received when it is stamped “received” by the agency’s mail room (not when it is postmarked);
    • Electronic documents emailed to the Office of Special Counsel before midnight Central Standard Time are considered received on that day; and
    • Documents faxed to the Office of Special Counsel before midnight are considered received on that day.
  • The Office of Special Counsel may allow a party to correct non-conforming documents, and corrected documents submitted by the deadline prescribed by the Office of Special Counsel will date back to the original filing date of the non-conforming documents.
  • Settlement documents should not be sent to the Office of Special Counsel.

34 Tex. Admin. Code § 1.28 (Concerning Comptroller’s Decision)

  • Adds new provisions regarding cases dismissed based on agreement, providing:
    • Rule 1.8 (resolution agreement) applies if the case has not yet been transferred to SOAH;
    • If the case is docketed at SOAH, the parties should file a motion to dismiss based on agreement:
      • Before the issuance of the Proposal for Decision or expiration of the exceptions period, with the Administrative Law Judge; or
      • If the Proposal for Decision has been issued and the exceptions period has expired, with the Office of Special Counsel; and
    • Then the parties should follow the guidelines in Rule 1.8.
  • Specifies when a Comptroller’s Decision in a contested case becomes final, providing:
    • The Comptroller’s Decision becomes final at the end of the 25-day period to file a motion for rehearing, if no motion is filed; or
    • If the order in question was not subject to a motion for rehearing, it becomes final on the date it is signed.

34 Tex. Admin. Code § 1.29 (Concerning Motion for Rehearing)

  • Defines a motion for rehearing as a request from a party for the Comptroller to reconsider all or portions of a decision or order.
  • Provides that the new deadlines prescribed in the rule apply only to hearings “set” at SOAH on and after September 1, 2015 (noting that the date a hearing is “set” is not the date on which the hearing is “conducted”).
  • Hearings set at SOAH before September 1, 2015 are subject to the deadlines provided by prior law.
  • Prescribes minimum required contents for a motion for rehearing, including:
    • Identifying with particularity the findings of fact or conclusions of law complained of;
    • Identifying with particularity any evidentiary or legal ruling claimed to be erroneous;
    • Providing the legal and factual basis of the claimed errors; and
    • In a tax refund case, stating the amount of refund sought.
  • Provides that a motion for rehearing must be filed no later than 25 days after the Comptroller’s Decision was signed (previously, the motion was due 20 days after “notification” of the Comptroller’s Decision, which was presumed to occur three days after mailing).
  • Provides that the Comptroller’s Decision will state a deadline for filing a motion for rehearing, and that a motion filed by the stated deadline will be considered timely.
  • Provides that a party may file a motion for an extension of time to file a motion for rehearing and that the Comptroller must act on the motion within ten days after the original deadline; if the Comptroller does not act by the deadline, the motion for extension is overruled by operation of law.
  • If a party did not receive notice of an agency decision or order, then the party may file a sworn motion to revise the period for filing a motion for rehearing; such motion is granted by operation of law if the Comptroller does not grant or deny the motion by the 10th day after the motion is received.
  • A reply to a motion for rehearing is not required, but any reply is due 40 days after the date on which the order or decision was signed (increased from 30 days under prior law).
  • A motion for rehearing is overruled by operation of law if the Comptroller does not act on the motion within 55 days after the Comptroller’s Decision was signed, absent an extension, or within 100 days after the Comptroller’s Decision was signed, if an extension was granted.
  • Specifies that an agency order is final on the date the motion for rehearing is overruled, whether by order or operation of law.

34 Tex. Admin. Code § 1.31 (Concerning Computation of Time) 

  • Provides that the Comptroller may grant extensions of deadlines prescribed by the rules of practice and procedure, and accept late filings, if permitted by law (formerly, the rule provided that the Comptroller may grant an extension for good cause shown if application was made before the expiration of the original period).

34 Tex. Admin. Code § 1.32 (Concerning Service of Documents on Parties) 

  • Provides that the Comptroller will not serve documents on parties by fax (taxpayers may serve documents on the Comptroller by fax).
  • Provides that service must be made on each party’s “designated representative for notice” as prescribed by Rule 1.4.
  • Documents must be served on the Tax Division by and through the assigned Assistant General Counsel in the Administrative Hearings Section.
  • Hand-delivered documents must be delivered to the specified address of the Administrative Hearings Section in the Stephen F. Austin State Office Building in Austin.
  • Faxed or emailed documents served before 12:00 midnight on a business day are presumed to have been served that day (formerly, documents had to be faxed by 5:00 p.m.).
  • Certificate of service is required, and a recommended form is provided; the certificate must substantially conform to the recommended form.
  • Service is completed when a document is “received” (formerly, service was completed when a mailed document was deposited in the mail as reflected by its postmark date).

34 Tex. Admin. Code § 1.41 (Concerning Ex Parte Communications)

  • Ex parte communication by a party with the person assigned to render a decision in a contested case is prohibited.
  • The prohibition applies for the duration of a contested case, which begins when a petition for redetermination or request for refund hearing is filed, and ends when the Comptroller’s Decision or order becomes final.
  • Prohibited ex parte communication applies to the Comptroller, the Deputy Comptroller, the staff of the Office of Special Counsel for Tax Hearings, and the Administrative Law Judge assigned to the case. 


John Christian