Guidelines on When TaxCloud May Cover Penalties and Interest (P&I) for Sales Tax Fiilings

At TaxCloud, we take pride in providing reliable and accurate sales tax compliance services. However, we understand that issues can occasionally arise that result in penalties and interest (P&I) assessed by a state agency.

We want to be fully transparent about how TaxCloud handles these situations:

When Will TaxCloud Cover the Penalty and Interest

In certain situations, TaxCloud may cover penalties and interest, but this is not automatic. Each case is reviewed individually and evaluated based on its specific circumstances.

Below are general guidelines that describe the types of situations where TaxCloud might assume financial responsibility:

• A return was filed incorrectly due to a confirmed TaxCloud system error.
• A return was submitted late due to a delay on TaxCloud’s side.
• An amendment was required because of a TaxCloud-related mistake.

If it's determined that TaxCloud was the direct cause of the issue, and after a review of the situation, we may agree to cover the associated P&I. In such cases, we will also work with you to correct the filings and ensure accurate reporting going forward.

When TaxCloud Cannot Cover Penalty and Interest

TaxCloud cannot cover P&I in cases where the issue did not stem from our systems or services. Common examples include:

• Incorrect, incomplete, or delayed data provided to TaxCloud.
• Merchant-side issues such as registration delays, funding failures, or bank rejections.
• State-side delays or processing problems unrelated to our filings.
• Filing decisions or obligations that fall outside the scope of TaxCloud’s services.

In these cases, responsibility for any penalties and interest remains with the merchant. However, we are committed to supporting you by helping you understand the issue and what steps can be taken to resolve it.

Assistance with Penalty Waivers

Our team can assist by providing confirmation numbers of filings and supporting documentation. TaxCloud may require additional documents, such as a power of attorney and proof of payment information, when working with a state.

Please note:

Penalty waivers are not guaranteed by the state, but many states are willing to waive penalties for first-time occurrences or administrative errors.