2023 Texas Statutes › Tax Code › Title 2 - State Taxation › Subtitle B - Enforcement and Collection › Chapter 111 - Collection Procedures › Subchapter A. Collection Duties and Powers › Section 111.0043. General Audit and Prehearing Powers

Sec. 111.0043.  GENERAL AUDIT AND PREHEARING POWERS.  (a)  In this section:
(1)  "Person" includes an individual, corporation, partner, partnership, officer, or director of a corporation, joint venture, trust, trustee, agent, or association.
(2)  "Taxpayer" means the person whose tax obligation the comptroller is seeking to determine.
(b)(1) Before a determination of or a hearing on a taxpayer's tax obligation, if any, the comptroller may issue a subpoena addressed to the sheriff or constable of any county in this state to require any person who the comptroller determines may provide assistance in the examination of a taxpayer's tax obligation to appear at the place and time stated in the subpoena for the taking of his oral deposition before an official authorized to take depositions.  The subpoena may require the person to produce at the time of the deposition books, documents, records, papers, accounts, and other objects as may be specified by the comptroller.  The subpoena must include a statement setting out the reason why the requested material is needed.
(2)  The deposition shall be taken in the county of the person's residence or in the county where the person is employed or regularly transacts business.  The subpoena shall specify that the person shall remain in attendance from day to day until the deposition is begun and completed.
(3)  The officer taking the oral deposition may not sustain objections to any of the testimony taken or exclude any of it.
(4)  When the testimony is fully transcribed, the deposition shall be submitted to the person for examination and read to or by the person, unless the examination and reading are waived in writing by the person and by the comptroller.  However, if the person is represented by an attorney of record, the deposition officer shall notify the attorney of record in writing by registered mail or certified mail that the deposition is ready for examination and reading at the office of the deposition officer.  If the person does not appear and examine, read, and sign the deposition within 10 days after the mailing of the notice, the deposition shall be returned and may be used as fully as though signed.  The officer shall enter on the deposition any changes in form or substance that the person desires to make and a statement of the reasons given by the person for making them.  The deposition shall then be signed by the person, unless the person and the comptroller by stipulation waive the signing or the person is ill, cannot be found, or refuses to sign.  If the deposition is not signed by the person, the officer shall sign it and state on the record the fact of the waiver, illness, or absence of the person or the fact of the refusal to sign, together with the reason, if any, given for failure to sign.  The deposition may then be used as fully as though signed.
(5)  The deposition shall be returned to the comptroller by the official taking the deposition either by mail or by delivering it in person.
(c)  Before a determination of or a hearing on a taxpayer's tax obligation, if any, the comptroller may:
(1)  issue a subpoena addressed to the sheriff or constable of any county in this state to require any person to produce at the place and time stated in the subpoena books, documents, records, papers, accounts, and other objects that the comptroller determines may assist in an examination of a person's tax obligation;
(2)  issue an order to a person to permit entry upon designated land or other property in his possession or control for the purpose of inspecting, measuring, surveying, or photographing the property or any designated object or operation on the property that may be material to any matter involved in the examination;  the order must specify the time, place, and manner of making the inspection, measurement, or survey and taking the copies and photographs and may prescribe any terms and conditions that are just;
(3)  copy or conduct a complete examination of books, documents, records, papers, accounts, and other objects that are produced as a result of the subpoenas or orders specified in this section;  and
(4)  serve or have served by his designated agent any subpoena or order issued under this section by delivering a copy of the subpoena to the person.
(d)  A person, other than the taxpayer, who is subpoenaed to give a deposition or to produce books, records, papers, or other objects under the authority of this section is entitled to receive after presentation of a voucher sworn by the person and approved by the comptroller:
(1)  mileage of 20 cents a mile, or a greater amount as prescribed by agency rule, for going to and returning from the place of the hearing or the place where the deposition is taken, if the place is more than 25 miles from the person's place of residence;  and
(2)  a fee of $20 a day, or a greater amount as prescribed by agency rule, for each day or part of a day the person is necessarily present as a deponent.
(e)  If a person fails to comply with a subpoena or order issued under this section, the comptroller may:
(1)  acting through the attorney general, bring suit to enforce the subpoena or order in a district court of Travis County;  the court, if it determines that good cause exists for the issuance of a subpoena or order, shall order the compliance with the requirements of the subpoena or order;  failure to obey the order of the court may be punishable by the court as contempt;
(2)  use records, books, papers, and other documents obtained or depositions taken under this section only in an administrative hearing of the comptroller or a judicial proceeding brought by or against the comptroller;  the information may be made available to the federal government or to another state under an exchange agreement;  and
(3)  delegate his authority to issue subpoenas or orders and to participate in the taking of depositions as specified in this section to any attorney employed by him.
(f)  If a foreign corporation doing business in this state has such contact with this state that it becomes subject to the taxes administered and collected by the comptroller and fails to appoint or maintain a registered agent in this state, or if the registered agent cannot with reasonable diligence be found at the registered office, then the secretary of state shall be an agent of the corporation and may be served with any subpoena or other order issued under this section in the manner provided for service of process in Article 8.10, Texas Business Corporation Act, as amended.
(g)  Any person, including the taxpayer, shall be entitled to obtain upon request a copy of any statement he has previously made concerning the examination or its subject matter and which is in the possession, custody, or control of the comptroller.  Copies of statements made to the comptroller by any person which are used as a basis for an assessment against a taxpayer may be obtained by the taxpayer upon request.  If the request is refused, the person may move for an agency order under this subsection.  For the purpose of this section, a statement previously made is:
(1)  a written statement signed or otherwise adopted or approved by the person making it;  or
(2)  a stenographic, mechanical, electrical, or other recording, or a transcription thereof, which is a substantially verbatim recital of an oral statement by the person making it and contemporaneously recorded.
Acts 1981, 67th Leg., p. 1497, ch. 389, Sec. 1, eff. Jan. 1, 1982.