Ezel / Tax Rulings / TX
TX 9805512L Franchise Tax (PRIOR TO 01/01/2008) 1998-05-13

Could a licensed CPA sign a Texas franchise-tax extension as an authorized agent after receiving verbal authorization from a corporate officer?

Short answer: Potentially, but CPA status and verbal authorization did not make the answer automatic. The letter said an authorized agent was a person legally empowered to act for the corporation, and a CPA was not prohibited from serving in that role. Whether the CPA was actually authorized depended on the extent of authority the client granted. At that time, the Comptroller did not require written authorization to accompany a return or extension request filed by an accountant.

Apply this to your situation

This page answers the general question as of 1998. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1998
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. The letter says actual authorized-agent status depends on the authority the corporation granted; it does not say every verbal authorization is sufficient. Its statement that written authorization was not required describes Comptroller practice as of May 1998. Confirm current signature and authorization requirements. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

A CPA could act as an authorized agent, but actual authority depended on what the corporate client empowered the CPA to do.

The letter said neither the Tax Code nor Comptroller rules formally defined “authorized agent.” It described the term as an individual legally empowered to act for a corporation.

There was no prohibition against a CPA acting as an authorized agent for most franchise-tax purposes. But CPA licensure alone did not decide the issue: the answer depended on the extent of authority granted by the client.

As of the letter date, the Comptroller did not require a return or extension request submitted by an accountant to include the corporation's written authorization.

What this means for you

Corporations and CPAs

The key issue was the scope of authority the corporation actually granted, not simply the accountant's professional license.

Tax professionals

The absence of a requirement to attach written authorization did not remove the need for the accountant to be legally empowered to act for the corporation.

Common questions

Q: Did the Tax Code define “authorized agent”?
A: No formal definition appeared in the Tax Code or Comptroller rules, according to the letter.

Q: Was a CPA prohibited from signing as an authorized agent?
A: No, not for most franchise-tax purposes.

Q: Did written authorization have to accompany the form?
A: The Comptroller did not require it at the time of this 1998 letter.

Citations and references

  • The ruling identifies no specific Tax Code section or administrative rule

Source

Original ruling text

May 13, 1998

Subject: Re: Signature Requirement on Texas Franchise Tax Extensions

Dear **:

Mr. Sharp passed along your message and asked that I contact you about your
question. You asked if a licensed CPA is an "authorized agent" for purposes of
signing the Texas Franchise Tax Extension if verbal authorization has been
given by a corporate officer.

There is no formal definition of the term "authorized agent" in the Tax Code or
in the Comptroller's administrative rules. An "authorized agent" basically
means an individual who is legally empowered to act on behalf of a corporation.

There is no prohibition against a certified public accountant acting as an
"authorized agent" for a corporation for most purposes under the franchise tax
law. Whether one is actually such an "authorized agent" depends on the extent
of the authority granted to the certified public accountant by his or her
client.

The comptroller does not currently require that a franchise tax return or
extension request form submitted by an accountant on behalf of a corporation be
accompanied by the written authorization of that corporation.

If you have questions about this or any other franchise tax matters, my
internet address is [email protected], or you may call toll-free at
1-800-531-5441, extension 3-3958.

Sincerely,

Teresa Comer
Tax Policy Division

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