February 19, 2007
FOR IMMEDIATE RELEASE
Texas Comptroller Implements New Procedures in Tax Hearings.
Recently, the Texas Comptroller of Public Accounts (Comptroller) transferred the
administrative law judges (ALJs) from her office to a separate agency, the State
Office of Administrative Hearings (SOAH). As an immediate consequence, oral
hearings scheduled for January and February have been postponed pending the
development of new procedures and rules to govern the administrative hearings process.
We expect the delayed hearings to be rescheduled in the near future.
In order to implement the changes, the Comptroller proposed new rules of
practice and procedure. If adopted, the rules would segregate the hearings process
into three distinct phases: the prehearing phase, the hearing phase, and the posthearing
phase.
Prehearing
The prehearing phase remains solely within the Comptroller's jurisdiction. During this
phase, taxpayers may request redetermination or refund hearings, exchange discovery, and
negotiate with the Assistant General Counsel (AGC) assigned to the case. Following
discovery and negotiation, the AGC will issue a position letter. If the taxpayer
disagrees with the position letter, the taxpayer, within 45 days, must submit a reply
to the position letter, all supporting evidence, and a form selecting either an oral
hearing or a hearing on written submissions. This triggers the hearing phase of the
proceeding. After the reply is filed, the AGC will have 45 days to file a response. If the
response does not resolve the case to the taxpayer's satisfaction, the AGC will refer the
case to SOAH for docketing.
Hearing
The hearing phase falls within the jurisdiction of SOAH. Upon the AGC's request, SOAH
will set the case for hearing and assign an ALJ. During this phase, all pleadings and
arguments are made before the ALJ, and SOAH's rules of practice govern. After the oral
hearing, if any, has been held and the record has closed, the ALJ will issue a Proposal for
Decision (PFD) to the taxpayer and the Comptroller. The PFD contains the ALJ's proposed
findings of fact and conclusions of law, and marks the end of the hearing phase.
Posthearing
Following issuance of the PFD, the case is again within the Comptroller's jurisdiction.
The taxpayer and AGC may submit exceptions to the PFD to the Comptroller. The Comptroller
will review exceptions, change the findings of fact and conclusions of law at her discretion,
and issue a Comptroller's Decision. If the taxpayer or AGC wishes to request a rehearing, the
motion for rehearing will be filed with the Comptroller and either be granted, denied, or
overruled by operation of law. (Deadlines and procedures for filing suit in district court
have not changed.)
Although the transfer of the ALJs has caused some delays, the new procedures should not affect
our practice adversely. As before, we will continue to work diligently with the AGCs to narrow
the issues and, to the extent possible, resolve our clients' cases during the prehearing phase.
We are qualified and prepared to appear in hearings before the ALJs at SOAH and to prosecute our
cases through the conclusion of the administrative hearings process.
If you have any questions regarding the above information, please contact Mr. Mark Weiss, Director,
or Mr. John Christian, Senior Taxpayer Advocate, of the
Ryan & Company Austin office, at 512.476.0022. Mr. Weiss
and Mr. Christian can also be reached via e-mail.
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