Home / Comptroller Liens, Freezes & Levies
Texas Comptroller · Collection
The Comptroller does not need a court order to freeze your account.
State tax collection in Texas moves faster than most owners expect. A final assessment lets the Comptroller lien your property, lock your operating account, and pull your sales tax permit, all by administrative notice.
Under Texas Tax Code section 111.021, when a taxpayer is delinquent the Comptroller can send a notice to a bank or anyone else holding the taxpayer's assets. The holder must freeze those assets for 60 days, and the Comptroller can levy on them at any time in that period by sending a notice of levy. A state tax lien also attaches to the taxpayer's property and is recorded with county clerks. Release usually comes from paying, entering a payment agreement, fixing the filings that produced an estimated bill, or successfully contesting the assessment.
The freeze and levy
The notice of freeze goes to the bank, not to you. The bank must hold what is in the account, up to the amount owed, for 60 days unless the Comptroller consents to release it sooner. At any time during those 60 days the Comptroller can deliver a notice of levy, and the bank must then turn the funds over. A holder that ignores the notice becomes liable itself and faces a penalty of 50 percent of the amount sought, so banks comply immediately.
The same procedure reaches anyone who owes the business money. Customers with open invoices and merchant card processors can receive the notice too.
The state tax lien
A state tax lien arises when the tax becomes due and attaches to all of the taxpayer's property in Texas. The Comptroller records notices of lien with county clerks, where they cloud title to real estate and appear in credit and due-diligence searches. For a business in Bedford, Fort Worth, or elsewhere in Tarrant County, that is the Tarrant County Clerk. For Dallas and Irving, it is the Dallas County Clerk. A lien is released when the debt is paid or otherwise resolved.
Other tools the Comptroller uses
- Permit suspension. The Comptroller can suspend a sales tax permit after notice and a hearing. Selling without a permit is unlawful, so suspension effectively closes a retail business.
- Security. A delinquent or high-risk business can be required to post a bond or other security to keep its permit.
- Seizure and sale of business property.
- Jeopardy determination. If collection appears to be at risk, the tax is due immediately and the determination becomes final in 20 days.
- Referral to the Attorney General for a collection suit and judgment.
- Personal liability assessments against the individuals who controlled the money.
How a freeze gets released
- Fix the filings. Many balances are estimates issued because returns were not filed. Filing accurate returns can reduce the liability sharply and sometimes eliminate it.
- Pay, or agree to pay. The Comptroller's enforcement offices can approve payment agreements. Terms are generally shorter and stricter than IRS installment agreements, and a down payment is normally expected.
- Contest the assessment if the deadline has not passed. A timely request for redetermination keeps the assessment from becoming final.
- Show the money is not the taxpayer's. Funds held for others, or accounts belonging to a different person, should not be levied for this taxpayer's debt.
What happens if you wait
The levy can arrive on any day of the 60. Once funds are paid over, getting them back means a refund claim. A business that cannot make payroll or pay suppliers during a freeze often does not survive it, and every week of delay weakens the offer you can make.
When a lawyer matters
Immediately, because the first call to the enforcement office sets the tone and the terms. Someone has to find out exactly which periods and what kind of assessment produced the freeze, whether any contest rights remain, and what the office will accept, and then put a workable proposal in front of the right person before the levy issues. If the owner's personal exposure is in play, those conversations should run through counsel.
Official sources
The rules described on this page come from these primary sources. Check them, or the notice you received, for current figures and dates.
When to call
Call today if:
- Your bank told you the Texas Comptroller froze the business account.
- A customer or card processor received a Comptroller notice about money owed to you.
- You received a notice of state tax lien, or one appeared in a title or credit search.
- The Comptroller scheduled a hearing to suspend your sales tax permit.
- You were told to post a bond or security to keep your permit.
- The balance is an estimate because returns were never filed.
Common questions
Direct answers.
Can the Texas Comptroller freeze my bank account without going to court?
Yes. Under Texas Tax Code section 111.021, the Comptroller can send a notice to a bank or any other person holding a delinquent taxpayer's assets. No court order is required.
How long does a Texas Comptroller bank freeze last?
The holder must freeze the assets for 60 days after receiving the notice unless the Comptroller consents to an earlier release. The Comptroller can levy on the frozen assets at any time during those 60 days.
How do I get a Comptroller freeze released?
By resolving the debt behind it: paying, entering a payment agreement with the Comptroller's enforcement office, filing missing returns that replace an estimated assessment, or timely contesting the assessment. Funds that belong to someone other than the taxpayer should also be released on proof.
Where are Texas state tax liens recorded?
With the county clerk. The state tax lien attaches to all of the taxpayer's property in Texas, and notices are recorded in county records, for example with the Tarrant County Clerk or the Dallas County Clerk.
Can the Comptroller take away my sales tax permit?
Yes. After notice and an opportunity for a hearing, the Comptroller can suspend the sales tax permit of a business that fails to comply with the tax laws. It is unlawful to make taxable sales without a permit.
Does a payment plan with the IRS protect me from the Texas Comptroller?
No. The IRS and the Texas Comptroller are separate agencies with separate laws and collection powers. An agreement with one has no effect on the other.
Related problems
State tax problems tend to travel together.
Texas Sales Tax Audit
The Comptroller audits four years at a time, tests a sample, and projects the error rate across everything. The sample and the records you produce decide the number.
Read more →Redetermination Hearings & SOAH
Sixty days to contest a Comptroller assessment in writing. The case goes to a Comptroller attorney first, then to an administrative law judge if it does not settle.
Read more →Texas Franchise Tax
A missed franchise tax report can forfeit your company's right to do business and make its officers personally liable for company debts. It is usually fixable.
Read more →Personal Liability for Business Taxes
Sales tax you collected belongs to the state. If the business does not pay it over, Texas can come after the person who controlled the money.
Read more →Next step
Sixty days is the maximum. The levy can come sooner.
Call with the date the bank received the notice, the amount, and what the business owes.