TN Department of Revenue Updated F&E Tax Filing Procedure
With feedback from tax practitioners in mind, the Tennessee Department of Revenue has updated its procedures for managing the Tennessee franchise and excise tax (F&E) accounts of taxpayers who fail to select the “final” box on their last return. When the “final” box is not checked, the department proceeds as though the taxpayer is still operational. This can result in estimated assessments and the inability to obtain a tax clearance.
Which process the department follows depends on the taxpayer’s situation:
o If the F&E account doesn’t have final or proposed assessments for later periods: The taxpayer should file an amended F&E return with the “final” box marked. The department will process the amended return and provide the taxpayer with a tax clearance.
o If the F&E account has one or more final or proposed assessments for later period(s), but the taxpayer has no other tax filings with activity for later periods: The taxpayer should file an amended F&E return with the “final” box marked. Taxpayers may email the return to the department at email@example.com so that staff may key it. The department will reverse all estimated assessments for later periods, close the account and mark it as inactive as of the last day of the amended final period. The department will provide the taxpayer with a closure letter, but no tax clearance.
The department no longer requires taxpayers who are administratively dissolved with the Secretary of State’s office to file minimum returns for any missing periods and to mark the current period’s return as “final.” However, if the taxpayer finds itself in a situation where the entity needs to be reinstated with the Secretary of State, it will have to file returns for the prior periods through the current period for this to happen.
o If the taxpayer has no other filings with activity for later periods, but it is no longer operating and has no way of filing an amended F&E return: The taxpayer or its authorized representative should send the department a letter stating that the last F&E return filed should have been marked as final. After receiving the letter, the department will reverse all estimated assessments for later periods, close the account and mark it as inactive as of the last day of the amended final period.
The Department of Revenue is always happy to answer any questions you may have. Please reach out to them at 615-253-0700 during business hours Monday through Friday or email firstname.lastname@example.org.