General Revenue Provisions

The Department of Revenue’s general policy for these topics can be found by clicking each subject matter below.

Tax Due Dates on Holidays or Weekends
  • If a tax due date falls on a Saturday, Sunday or legal holiday, the due date is extended until the next business day.
Receipt of Mailed Tax Returns
  • The Department of Revenue considers mailed tax returns to be filed and received on the date shown by the post office cancellation mark on the envelope. If the post office cancellation mark is illegible, erroneous or omitted, then the Department uses the date the return was received as the date it considers the return to be filed.
Penalties
  • Penalty is imposed for tax returns and payments that are made late.
  • Penalty is computed at the rate of 5% per month, or any fractional part thereof, from the due date to the date the taxes are paid. The maximum penalty is 25% of the taxes due, and the minimum is $15.
  • If you would like to request a penalty waiver, please visit our penalty waivers page.
Interest
  • Interest is imposed on any taxes not paid by the statutory due date even if an extension of time has been granted.
  • The Department announces the interest rate July 1 each year. Visit the Tax Resources section of our website to view the current interest rate.
  • The current interest rate is computed from the due date to the date the taxes are paid.
  • Interest cannot be waived.
Refunds
  • Taxpayers may claim a refund for overpaid taxes if the taxpayer submits a claim supported by proper proof within three years from December 31 of the year in which the payment was made.
  • The Department considers franchise and excise overpayments listed on the tax return, which result from pre-payments, to be a valid claim for refund.
    • Taxpayers have the option to apply franchise and excise tax overpayments as a credit to next year's estimated tax liability. Taxpayers should allow four to six weeks processing for a refund check to be issued.
  • Interest will be paid on any refund that is not made within 45 days from the date the Department receives proper proof to verify that the refund is due.  Interest is paid at the same rate of assessments.
  • Tennessee’s Attorney General must approve refund claims of $100,000 or more.
Audits and Assessments
  • Generally, all tax returns filed with the Department of Revenue are subjected to some type of office audit or examination to ensure that the appropriate taxes have been paid. An office audit consists of a computer math audit and/or a manual examination of the return by a trained auditor or technician.
  • If additional information is needed to complete an audit, the taxpayer will be contacted by the Department. The taxpayer will be notified in writing of any adjustment(s) made to the return.
  • If a taxpayer is selected for a field audit, the Department will contact the taxpayer to set up a time for the audit. The taxpayer will be advised in advance of the records needed for the field audit.
  • A field audit usually involves tax returns filed for the previous three years. When the audit is completed, the auditor will leave a copy of the report with the taxpayer who will be given time to review it. The auditor will make any necessary changes to the report before issuing a proposed notice of assessment involving a tax deficiency.