Texas Tax Amnesty

In an effort to encourage delinquent taxpayers to “wipe the state clean,” Texas has initiated a 2012 amnesty program aptly named Project Fresh Start.    

The program is in effect from June 12, 2012 through August 17, 2012.  During this time, the Texas Comptroller of Public Accounts will waive penalties and interest for taxpayers that pay all taxes due.  Eligible businesses are those that have failed to file returns, those that must file amended returns to correct underreporting and those that do not have a permit to report and remit Texas taxes.  Taxpayers that have no Texas permit (but do business in the state) will be required to complete and submit the applicable tax application or questionnaire before being eligible to participate. 

This limited amnesty applies to returns originally due before April 1, 2012.  It covers all state and local taxes and fees administered by the Comptroller’s office with the exception of Public Utility Commission gross receipts assessments, property tax assessments and the unclaimed property program.    

Amnesty does not apply to filing periods under audit or identified for an audit nor does it apply to a taxpayer that has signed a voluntary disclosure agreement (“VDA”) before the beginning of the amnesty period.   

Project Fresh Start is similar to the Texas VDA program, which is already in effect and will remain so during the amnesty period.  Both programs waive interest and penalties, with one caveat.  The VDA program does not waive interest in the case of taxes that were collected and not remitted.  Both programs take similar positions on future audits, leaving the filing periods open to the possibility of them.   

Though not many, there are key differences.  The VDA program allows for a limited look-back period of only four years, while amnesty requires that returns be filed for all applicable tax periods.  Also, amnesty does not afford the protection of a written agreement and mandates that payment be made in full, with no provision for an installment plan.  The VDA program will consider any potential problems regarding full payment of the disclosed taxes, as long as this information and a proposed payment agreement is included in the initial contact letter.   

Amnesty is likely preferable for taxpayers with less than four years of underreported or unreported tax liability.  To apply for amnesty, no pre-approval is necessary.  For taxpayers with obligations reaching beyond four years, the written agreement and limited look back that voluntary disclosure provides is more beneficial, even considering the need for VDA pre-approval.   

For more information and instructions on how to apply for amnesty, please visit 

With 20 years of experience, Gary Bingel's expertise focuses on state and local income taxation, and also includes sales and use tax consulting. Gary is Partner-in-Charge of EisnerAmper's State & Local Tax Group.

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