When you’ve fallen behind on Texas tax filings for multiple periods, getting back into compliance requires a systematic approach. The task can feel overwhelming, but breaking it into manageable steps makes it achievable.
Start by identifying all missing filings. Determine exactly which returns are outstanding, for which periods, and for which tax types. Sales tax, franchise tax, and other obligations each have their own filing requirements and deadlines. Creating a comprehensive list ensures nothing is overlooked.
Gather records for each period. Reconstructing past periods often requires digging through bank statements, invoices, accounting software, and other sources. The more complete your records, the more accurate your returns will be. Missing records can be reconstructed using bank deposits, third-party information, and reasonable estimates where necessary.
Determine whether voluntary disclosure applies. If you’ve never filed Texas returns and haven’t been contacted by the Comptroller, voluntary disclosure may limit your lookback period and eliminate penalties. This decision should be made before you start filing, because once you begin submitting returns, voluntary disclosure becomes unavailable.
Prepare returns for all missing periods. Each return should be as accurate as possible based on available records. If you need to estimate certain amounts, document your methodology. Returns that are clearly reasonable and well-documented receive less scrutiny than those that appear thrown together.
Consider the payment implications before filing. Filing returns without the ability to pay triggers immediate liability. If you’re going to need a payment plan, negotiate that arrangement in conjunction with filing rather than filing first and asking for payment terms later.
File strategically. In some cases, filing all returns simultaneously makes sense. In others, a phased approach may be better. The right strategy depends on your specific situation, the amounts involved, and your ability to pay.
Establish systems to stay current going forward. Catching up is wasted effort if you fall behind again. Implement processes to ensure timely filing and payment for all future periods.
Catching up on multiple periods is complex, but waiting only makes it worse. Contact us to develop a plan for getting back into compliance.
