Texas Tax Refunds And Traps

In December 2010, the Texas Comptroller proposed changes to the administrative rules governing refund claims. Proposed Comptroller Rules 3.325 and 3.339 reflect a number of changes in the refund procedures in Texas during the last several years and illustrate the number of traps of which to be mindful in considering refund claims in Texas.¹

Procedural Remedies

The filing of a refund claim typically initiates an informal review by the Comptroller.² If any portion of the taxpayer's claim is denied, the Comptroller issues a letter denying the claim (in whole or in part) and stating that the taxpayer has 30 days to file a request for a refund hearing. This triggers a statutory deadline for submitting such request within the 30-day period.³ Following an adverse decision in such hearing (and after filing a motion for rehearing that is denied), the taxpayer has 30 days to file a refund lawsuit in Travis County District Court.⁴