The following sections discuss the general procedures of the Rule 13 hearing
To request a Rule 13 tax hearing, an Authorized Representative should send
a written request to the local TWC tax office. A Responsible Party signature
is sufficient provided FTC is documented that the Authorized Representative
is aware of the action. The local tax office will forward the request to
the State Office.
- When an employer requests a Rule 13 coverage hearing, the Accounts Examiner
and Hearing Coordinator(HC) must do everything in his/her power to resolve
the dispute informally but tactfully.
- Disputed amounts are taxes and interest due on amounts paid to
persons deemed to be in employment by the Commission but not previously
reported by the appellant.
- If the dispute cannot be resolved, obtain a letter from the employer
requesting a Rule 13 coverage hearing.
- The proper reports and/or adjustments must be on file, prior to acceptance
of a request for a hearing.
- Conduct a thorough investigation and gather all information available
by telephone, letter or personal visit.
- Complete and file all quarterly and/or correction reports and status
- Complete the appropriate Independent Contractor Questionnaire.
- Make a printout showing all delinquency and status records.
- Review similar cases on the computer.
- Meet with your Rule 13 Coverage Hearing Coordinator (HC) for further
- Place a "stop" on the account, and enter appropriate
documentation on the account.
- Review the case with the Accounts Examiner and determine if the facts
warrant a hearing.
- Identify all Interested Parties.
Black's Law Dictionary defines interested parties for purposes of an administrative
hearing, as those who have a legally recognized private interest, and
not simply a possible pecuniary (monetary) benefit.
- If the worker was involved with a third party employer, both companies
must be "Interested Parties" and identified as brought into
the hearing process. For example: Company "A" hires worker "X"
and assigns worker "X" to company "B" office location.
Company "B" should be identified as an "Interested Party."
- If the workers are found not to be in employment, the Hearing Coordinator
will notify the employer, examine the file to see if more status information
or adjustment reports are needed, and issue the appropriate assignment.
- If the workers are in employment, the HC will attempt to resolve the
case with the employer without a hearing. If unsuccessful, the HC will
write a letter to the employer; acknowledge the request for a hearing;
and cite the issues involved.
- If the hearing is due to a liability question, or any question relating to contributions or
reimbursements, the Hearing Coordinator will discuss the issues and try to resolve those issues
with the interested parties. Example: Company A (Styled as a staff leasing company) has been
established as the employer. The claimant indicated no wages are listed under Company A. After
an investigation it is determined that Company A is not a licensed staff leasing company. Company
B is the actual employer. In this situation if a hearing is requested, insure that the claimant,
and both Company A and Company B are listed as the employers. The HC will contact all parties
and try to sort out and resolve all of the issues. If the parties are not satisfied, the HC will
complete the Rule 13 Coverage Hearing Worksheet, listing the issues and all interested parties,
using additional sheets as needed.
- The HC will advise the interested parties that the request for hearing
is being sent to State Office Status Section.
- The Rule 13 Hearings Issue Worksheet, must be completed and
attached to the state office transmittal. Insure that all interested parties
are named. Include the office FAX number and if witnesses are required,
include the names, addresses and reasons for the testimony in the Issues
- The HC should assess whether a translator is needed at this point. If
so, highlight this information on the Rule 13 Hearings Issue Worksheet.
- Establish a "tickler" file to insure that the request for
a hearing is not lost in the mail.
- When the hearing date is set by the Special Hearings Department and
the HC receives a copy, an assignment will be made
for the Accounts Examiner and the HC.
- If the hearing is postponed or canceled, the assignment will be cleared
from the assignment inventory.
- The HC will review the case with the Accounts Examiner and plan their
presentation. If any additional witnesses are needed, the Special Hearings
Attorney should be notified immediately.
- Hearing coordinators are expected to evaluate the facts of each appeal and determine if
any Commission witnesses are essential to the Rule 13 presentation and whether they will
be needed throughout the hearing. If a Commission witness is needed to provide essential
testimony, the Hearing Coordinator can verbally submit a request and supporting arguments
to the Hearing Officer during the opening phase of the Rule 13 proceedings.
For example, the complex issue of tax rate computation may require that a Tax Department
representative hear and evaluate all of the facts of the case in order to make a proper and
accurate response. Therefore, the Tax Department representative is "a party.... essential
to the presentation of the (Tax Department's) .... cause." The Hearing Coordinator should,
when offered the opportunity at the opening, give a statement like "The Tax Department
requests that (representative named) be allowed to be present and hear the employer testimony
because full understanding of all the issues is essential to the presentation of the Commission's
Occasionally an attorney maybe necessary to assist Tax in a Rule 13 Hearing, if so, the Tax Department will request assistance from the Legal Department.
- The Tax Department and the employer are equal parties. The Special Hearings
Attorney although a TWC employee must remain impartial during the hearing
and will extract as much information as can be obtained from both parties.
- The Accounts Examiner who made the investigation should be the one present
even though he or she may no longer work the area.
- The Accounts Examiner should be ready to testify as to:
- How the investigation was conducted, (e.g., telephone conversation, personal observation of the work performed, audit of the records, dates and times of contacts, and completed Forms.
- The result of the investigation, (e.g., Mr. "X" became
liable under Section 201.021 of the Texas Unemployment Compensation
Act effective March 31, 20YY because he/she paid wages of $1,500 during
the first quarter of 20YY.
- If a dispute related to independent contractors as opposed to employment
is also in question, the Accounts Examiner should be able to cite the
20 common law factors that apply to the case and be able to support
the findings with evidence.
The hearing coordinator (HC) will represent the tax department in the hearing
by protecting the interest of the accounts examiner. The hearing coordinator
- Make an opening statement
- The opening statement is mandatory.
- The opening statement should be clear, concise, and state the Tax
- The opening statement should not be lengthy.
- Cross-examine the employer and employer witnesses. The purpose of the
cross-examination is to impeach the employer's testimony and develop additional
- Ask questions the special hearings attorney (SHA) didn't ask.
- Bring out omitted facts.
- Bring out half truths.
- Clarify whether or not situations actually exist.
- Enhance testimony that supports our position.
- Directly examine the accounts examiner and Tax Department witnesses.
- Ask questions which were not brought up during the SHA's questioning.
- Allow the accounts examiner to expand on questions not fully answered
- Present additional evidence and documentation.
- Bring out 1st hand conflicting testimony.
- Make a closing statement.
- Closing statement is mandatory.
- Closing statement should be brief.
- State the final position of the Tax Department.
- Restate the main factors to support our position.
- Remind the SHA of impeached testimony.
- Bring up serious contradictions.
- The Hearing Coordinator will place a stop
on the account.
- The Hearing Coordinator will call the interested parties to advise
the employer of the Rule 13 hearing process.
- The Accounts Examiner will be issued a status assignment to investigate
the issues and, if appropriate, complete the necessary questionnaire or
- The Accounts Examiner will complete the assignment (i.e. complete all
the investigation obtain all the reports needed in thirty days).
- The Hearing Coordinator will complete the Rule 13 Hearing Issues Worksheet. Insure
that all interested parties are named. Include the office FAX number and if witnesses are required,
include the names, addresses and reasons for the testimony in the Issues Worksheet.
- The Accounts Examiner and Hearing Coordinator will attend the hearing
in an advisory capacity and be ready to answer questions from the Special
Hearings Attorney and be cross-examined by the interested parties.
- An assignment will be issued to the appropriate Accounts Examiner,
when the hearing is scheduled.
If the interested parties and the Tax Department agree to a settlement
and the interested parties wish to withdraw the hearing request, the interested
parties or the Tax Department must mail or fax the written withdrawal request
to the Special Hearings Department.
Note: The Commission's written decision may affirm, reverse or modify the
Tax Department's decision. The Commission's written decision is mailed promptly
to the interested parties and the Tax Department. Once the Commission reaches
a decision, the Tax Department is asked to adjust the interested parties
tax account(s), if necessary, in accordance with that decision.
- Special Hearings Department staff attorneys conduct informal fact-finding
hearings on tax liability questions under the authority of Texas Workforce
Commission Rule 13 (40 TAC 815.13). The Special Hearings Attorney will
explain the law and the hearing procedures before the hearing begins,
and will then give each side a chance to ask questions. Following this hearing, the Commission will review the testimony and documents presented at the hearing. A written decision based on the
weight of the evidence will be issued pursuant to the Texas Unemployment
- Telephone Hearing: This hearing will be conducted by telephone. Select
a quiet location to call from.
- Telephone Call-In Instructions:The date and time for the hearing is
shown on the Notice of Hearing. On the scheduled day and time, place a
call to the Special Hearings Department at the telephone number given
on the Notice of Hearing. Please call promptly at the time scheduled.
Give your telephone number. When you call, tell the clerk the telephone
number that you are calling from. The Special Hearings Attorney will call
you back at that telephone number to establish a telephone conference
call. The Special Hearings Attorney will then ask for the telephone numbers
where your witnesses and representative, if any, can be reached.
Set Aside Enough Time For The Hearing.
- Representative: The Special Hearings Attorney will help parties develop
the facts in the case so a representative is not required. However, you
may have an attorney or another person represent you, at your own expense.
- Witnesses: At the hearing, you may present witnesses to provide relevant
information to support your position. Choose witnesses with direct, firsthand
information about the issue or issues in the case. When appropriate, the
Special Hearings Attorney may limit unnecessary testimony or may exclude
witnesses whose testimony is needlessly repetitive. Arrange to have your
witnesses available throughout the hearing.
- Documents: Your choice of documents to present depends, in part, on
the issues in your case. Plan to present a copy of every document supporting
Send copies to the Special Hearings Attorney: You must promptly mail or
fax a copy of every document you want to present in the hearing to the
Special Hearings Attorney in plenty of time to allow the attorney the
opportunity to review the documents before the hearing. Send the documents
by mail or fax as explained below.
Mail or Fax Instructions:
Letters or documents may be faxed to the Special Hearings Department.
Important: Letters or documents, whether sent by mail or faxed, must include the employer's
TWC tax account number.
Send a copy to all the interested parties: Promptly mail or deliver the
same documents you send to the Special Hearings Attorney to all the interested
parties at that party's address as shown on the notice of hearing.
Keep one copy of each document for yourself, and have it with you during
- Affidavits: One document sometimes presented is an "affidavit,"
a sworn, notarized statement by a person unavailable to give testimony
in person at the hearing. While an affidavit may be useful in some situations,
it is a poor substitute for live testimony as it is not as persuasive
as live testimony.
- Subpoenas: After identifying the witnesses you need, request their voluntary
participation in the hearing. Witnesses who refuse to participate voluntarily
may be compelled by subpoena. A subpoena may also be useful to compel
the production of essential documents. The Special Hearings Attorney decides
whether to issue a subpoena. Subpoenas must seek specific documents or witnesses. Excessively
broad subpoena requests will be denied.
- Postponement Requests: Notify the Special Hearings Department in writing
immediately if there is a scheduling conflict with the hearing. Postponement
requests must be in writing (sent by mail or fax) and must set forth the
reason(s) for the request.
The Special Hearings Department will postpone or reschedule the hearing
only for compelling and unavoidable circumstances. After reviewing the
request, the Special Hearings Department will inform the employer, the
Tax Department, and the witnesses, if any, of its postponement decision.
- Non-Appearance by the employer: Failure to appear without notice and
explanation on the scheduled date and time will be treated by the Special
Hearings Department as a default. The final Tax Department determination
stands and becomes the Commission's decision in this case.
- Withdrawal of Hearing Request: To request a withdrawal, the employer
must mail or fax the written withdrawal request to the Special Hearings
- Settlement: Settlement of a case is always a possibility. At any time
before the scheduled hearing date an employer may attempt to settle the
case by meeting with Tax Department representatives to discuss the matter.
The Special Hearings Department will not be involved in any settlement
discussions. If an agreed settlement is reached, the Tax Department will
adjust the final determination according to that agreed settlement.
- Questions: If you have additional questions about the procedures used
in a tax liability hearing, please contact the Special Hearings Attorney.
Basic rules of fairness prevent the Special Hearings Attorney from discussing
the facts or merits of a specific case unless everyone involved can participate.
Because the Special Hearings Department and the Tax Department are not
connected in any way, it is unlikely the Special Hearings Attorney will
be able to answer specific tax questions. Employer's should hold questions
about tax matters until the actual hearing or direct them to the TWC Tax
Department or a local tax office.
- Be on time and wait in a public waiting area. The special hearings attorney
(SHA) will call parties from the waiting area and escort them to the hearing
- Once in the hearing room, the tape recorder will be turned on by the
SHA and the SHA will introduce him/herself.
- The SHA informs all parties that the hearing is being tape recorded, he/she has been selected to conduct the hearing and develop the record, and the Commission will issue the written decision.
- The SHA will identify all parties present by name and position, explain
the appellant's contentions and summarize the issues, and explain the
- The Tax Department and all interested parties provides opening statements.
- The SHA will question the interested parties about the issues.
- After questioning, the interested parties or their representatives are
allowed to add information and documents not yet covered.
- The interested parties or their representatives are allowed to ask questions
of the employer.
- The Hearing Coordinator is allowed to cross-examine the employer.
- The above procedures will be followed for each employer witness.
- The SHA will question the Accounts Examiner and allows the Accounts
Examiner to present factors supporting the Tax Department's position.
- The hearing coordinator (HC) will be allowed to ask questions of the
- The employer representative will cross-examine the Accounts Examiner.
- After all testimony has been offered, both sides will have the opportunity
to offer a rebuttal to any issues.
- All sides then give closing statements.
- The SHA gives a brief post-hearing explanation and concludes the hearing.
- The tape recorder is shut off.
March 05, 2012