Texas Letter Ruling 9209L1239D03: Tax Refund Check/Warrant — Is A Decision Of The Comptroller And Is Not Equivalent To 'Notice Of Determination'

Subject

Tax Refund Check/Warrant — Is A Decision Of The Comptroller And Is Not Equivalent To "Notice Of Determination"

Plain-English summary

A taxpayer had paid an estimated liability to take part in a tax amnesty program, and that payment created a credit — so the Comptroller never issued a deficiency determination on it. The taxpayer's representative asked the Comptroller two questions about what that meant for the timing of a refund request.

First, does the refund check itself count as a "notice of determination" for purposes of Tax Code Section 111.009(b) and Section 111.104(c)(3)? The Comptroller answered no — a refund check or warrant is a decision of the Comptroller, but it is not the same thing as a notice of determination.

Second, if the refund check isn't a notice of determination, what does count as one when the Comptroller never issues a Texas Notice of Tax Due in an audit? The Comptroller's answer: if no notice of determination is issued, then none is issued — there's nothing to substitute for it. The six-month provision in Tax Code Section 111.104(c)(3) only applies where a jeopardy or deficiency determination was actually issued and paid. If a particular transaction was never part of an audit (so no deficiency determination was ever issued on it), the taxpayer can still ask for a refund on that transaction, as long as the four-year statute of limitations hasn't run out.

The Comptroller noted this answer was based on the specific facts presented and that other, similar facts could lead to a different result.

What this means for you

Businesses that paid under the amnesty program

If you made a payment under an amnesty program that generated a credit rather than triggering a deficiency determination, don't treat the refund check or warrant you eventually receive as a "notice of determination." It's a different kind of document, and it does not start whatever clock a notice of determination would start.

Taxpayers seeking a refund on transactions never audited

If a transaction was never picked up in an audit — so the Comptroller never issued a notice of determination on it — you are not shut out of a refund. You can still request one on that transaction, but you need to act within the four-year statute of limitations.

Accountants and tax professionals

This letter draws a distinction between the six-month deadline tied to a notice of determination under Tax Code Section 111.104(c)(3) (which only kicks in when a jeopardy or deficiency determination was issued and paid) and the general four-year statute of limitations that otherwise governs refund requests. When advising on refund timing, confirm first whether a notice of determination was actually issued for the transaction in question — the answer changes which deadline applies.

Common questions

Q: Does a refund check or warrant count as a "notice of determination"?
A: No. The Comptroller was explicit: a refund check constitutes a decision of the Comptroller, but it is not equivalent to a notice of determination.

Q: What counts as "notice of determination" if the Comptroller never issues a Texas Notice of Tax Due for a transaction?
A: Nothing does — if a notice of determination is not issued, it is simply not issued. There's no substitute document that stands in for it.

Q: Can I still get a refund on a transaction that was never audited?
A: Yes. If a specific transaction wasn't included in an audit (so no deficiency determination was issued on it), you're still entitled to request a refund on that transaction, provided the four-year statute of limitations hasn't expired.

Q: When does the six-month refund-request window under Section 111.104(c)(3) apply?
A: Only in situations where a jeopardy or deficiency determination was issued and paid. It does not apply just because a refund check was issued.

Citations and references

Statutes and rules:

• Tax Code § 111.009(b)
• Tax Code § 111.104(c)(3)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9209L1239D03

Original ruling text

September 29, 1992

Dear *****:

Thank you for your recent letter regarding the timing of a request for
refund hearing. You stated that the taxpayer paid an estimated liability
to avail itself of the amnesty program and that the payment resulted in a
credit so that no deficiency determination was issued.

You ask:

Does the refund check constitute "notice of determination" for purposes
111.009(b) and Section 111.104(c)(3)?

Response: No, the refund check constitutes a decision of the Comptroller.
It is not equivalent to a notice of determination.

If not, what does the Comptroller consider to be "notice of determination"
in instances where the Comptroller does not issue a Texas notice of Tax Due
in an audit situation?

Response: If a notice of determination is not issued, it is simply not
issued. The six month provision found in Tax Code Section 111.104(c)(3)
applies in situations where a jeopardy or deficiency determination is
issued and paid. If a specific transaction was not included in an audit
so that no deficiency determination was issued, a taxpayer is still
entitled to request a refund on that transaction, provided that the four
year statute of limitations has not expired.

This opinion is based on the facts you presented. Other facts, though
similar, may yield different results.

If you have questions or need more information, please call or write.
You may reach me by calling toll free, (800) 531-5441. My direct line
number is (512) 463-4680. The number for FAX transmissions is (512)
475-0900. You may write to me in care of Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

NOTE: Previous Accession Number 93070024.4 and/or 9307024L