The Problems We See Most in Texas
Falling behind in Texas usually involves the Comptroller as much as the IRS. An LLC that never filed its information report loses its right to transact business. A contractor treated remodeling jobs as nontaxable when the property was commercial. An online seller passed the $500,000 threshold without registering. A small employer stopped filing quarterly reports with the Texas Workforce Commission. And sometimes the federal returns have not been filed for years. BOMCAS reconstructs the records, prepares the missing returns and puts a plan in place to stay current.
What We Do, and What We Do Not Do
We prepare returns, reports, amended filings and the supporting calculations, and we help you understand notices and organise the documents an agency asks for. We do not represent clients before the IRS or appear on their behalf. If you need representation, we can work alongside the attorney or other representative you choose.
Forfeited Entities and Reinstatement
When a franchise tax report or information report is not filed, the Comptroller sends a notice of intent to forfeit, and if the problem is not fixed the entity's right to transact business is forfeited. The Secretary of State can later forfeit the charter or registration. A forfeited entity cannot sue in Texas courts, and its officers and directors can become personally liable for debts incurred during forfeiture. Reinstatement means filing every missing report, paying tax, penalties and interest, and then obtaining reinstatement from the Comptroller and, if the charter was forfeited, the Secretary of State. We prepare the reports and track each step.
Penalties
A late franchise tax or sales tax report carries a $50 penalty. Tax paid 1 to 30 days late adds a 5 percent penalty, and more than 30 days late, 10 percent. Interest begins 61 days after the due date. Businesses that miss a sales tax return also lose the timely filing discount.
Sales Tax Catch-Up
Unfiled or under-reported sales tax is the most expensive Texas problem because the tax was often collected from customers. We rebuild sales by period and location from bank deposits and sales reports, separate taxable from exempt sales, gather resale and exemption certificates, and calculate use tax on purchases where no tax was paid. The Comptroller can generally assess four years back, but there is no time limit when returns were never filed or tax was collected and not remitted.
Audits and Payment Plans
When the Comptroller has already opened an audit, voluntary disclosure is no longer available, but organised records still make the difference. We prepare sales and purchase schedules, gather exemption and resale certificates and reconcile the sample periods to the ledger. When tax is owed and cannot be paid at once, the Comptroller may agree to an installment arrangement for some balances, and we prepare the figures for that request.
Voluntary Disclosure
A business that has not been contacted by the Comptroller for audit can apply for a voluntary disclosure agreement for sales, franchise and certain other taxes. The look-back is generally limited to four years, and penalties, and often interest, are waived. Tax that was collected from customers but not remitted must be paid in full for all periods with interest, though penalties can still be waived. A voluntary disclosure can be started anonymously through a representative, with the business name given only once the agreement is offered.
Texas Workforce Commission Reports
Missing quarterly wage reports lead to penalties, estimated assessments and loss of the employer's experience rate. We file the missing reports, reconcile wages to federal payroll returns and calculate the amount due.
Unfiled Federal Returns
For federal returns, we request IRS transcripts to see what has been reported, rebuild income and expenses from records, and prepare the missing returns in an order that limits penalties. Refunds can generally be claimed only within three years of the original due date, so households owed money should not wait.
Sales Tax Permit Holders Who Closed
Businesses that stopped operating but never closed their sales tax permit keep receiving filing requirements, and missed zero returns generate the same $50 penalties. We file the outstanding returns and close the permit and the franchise tax account properly, including the final reports needed before an entity can end its existence with the Secretary of State.
Staying Current
Once caught up, a filing calendar covering the May 15 franchise report, sales tax due dates, TWC quarters and federal deadlines, together with monthly bookkeeping, keeps the problem from coming back.
Texas Back Taxes and Late Filing Questions
My LLC was forfeited by the Comptroller. Can it be reinstated?
Yes. All missing reports must be filed and tax, penalties and interest paid, after which the entity can be reinstated with the Comptroller and, if needed, the Secretary of State.
How far back can Texas assess sales tax?
Generally four years, but there is no limit if returns were never filed or tax was collected and not remitted.
What does a Texas voluntary disclosure agreement cover?
Generally a four-year look-back with penalties waived, and often interest. Tax collected and not remitted must be paid for all periods.
Do you represent clients before the IRS?
No. We prepare the returns and calculations and can work with your representative.
Talk to BOMCAS About Back Taxes and Late Filing in Texas
Once you are current, ongoing bookkeeping, payroll and sales tax filing keep you there, and future business returns and personal returns follow a normal calendar. A tax plan sets money aside for estimates and the May franchise report, and Canadians with missed U.S. filings are covered under cross-border tax. For a summary of how Texas taxes businesses and residents, see the Texas accounting and tax overview or our United States services.
Tell us what you need help with and we will reply with next steps. Contact BOMCAS, use the contact form below, call 780-667-5250 or email info@bomcas.ca. You can also go back to the Texas overview. This page is general information, not advice for a particular situation.