Sec. 201.3021. MANAGED AUDITS. (a) In this section, "managed audit" means a review and analysis of invoices, checks, accounting records, or other documents or information conducted by a taxpayer to determine a taxpayer's liability for tax under this chapter.

(b) The comptroller may, in a written agreement, authorize a taxpayer to conduct a managed audit under this section. The agreement must:

(1) be signed by an authorized representative of the comptroller and the taxpayer; and

(2) specify the period to be audited and the procedure to be followed.

(c) The decision to authorize or not authorize a managed audit rests solely with the comptroller.

(d) In determining whether to authorize a managed audit under this section, the comptroller may consider:

(1) the taxpayer's history of tax compliance;

(2) whether the taxpayer has sufficient time and resources to conduct the audit;

(3) the sufficiency and availability of the taxpayer's tax records;

(4) the taxpayer's ability to pay any liability arising as a result of the audit; and

(5) any other factor the comptroller determines is relevant.

(e) A managed audit may be limited to one or more factors affecting a taxpayer's liability for tax under this chapter, including:

(1) gross value of gas produced;

(2) exempt interest;

(3) marketing costs of gas produced;

(4) gas used to power operations at a well or lease; or

(5) tax reimbursement paid by a purchaser to a producer.

(f) The comptroller may examine records and perform reviews that the comptroller determines are necessary before the audit is finalized to verify the results of the audit.

(g) Unless the audit or information reviewed by the comptroller under Subsection (f) discloses fraud or wilful evasion of the tax, the comptroller may not assess a penalty and may waive all or part of the interest that would otherwise accrue on any amount identified to be due in a managed audit. This subsection does not apply to any amount collected by the taxpayer that was a tax or represented to be a tax but that was not remitted to this state.

(h) Except as provided by Section 111.104(f), the taxpayer is entitled to a refund of any tax overpayment disclosed by a managed audit under this section.

(i) The comptroller may adopt rules and establish procedures to administer this section, including procedures that must be followed when conducting a managed audit under this section.

Added by Acts 2019, 86th Leg., R.S., Ch. 1113 (H.B. 2256), Sec. 2, eff. September 1, 2019.