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Pew Law Center Blog
August 5, 2011 Lawrence 'D' Pew

ATTENTION TAXPAYERS! Arizona Tax Amnesty Program Begins on September 1, 2011

The Arizona legislature passed the Arizona tax amnesty program bill in an effort to move toward balancing the state’s budget. Senate Bill 1616, which was approved on April 6, 2011, created a tax recovery program for the state. With the exception of estate tax and property tax, the Arizona tax amnesty program covers all local taxes and state taxes. The purpose of the program is to encourage $22 million into the state coffers through the collection of unpaid tax revenue. If the past success of amnesty programs is any indication, this program will bring money to the Department of Revenue. By comparison, a similar amnesty program a couple years ago for unpaid taxes covering the 2002 through 2007 tax window collected about $20 million for the state.

The 30-day amnesty period begins on September 1 and runs through October 1, 2011 – and then it is over. To take advantage of theArizona tax amnesty program, you do not need to establish reasonable cause for your tax delinquency or prove any absence of willful neglect.

Five-Year Tax Period.

Certainly, this Arizona tax amnesty program provides an incentive for anyone with back tax issues for the relevant period to come forward for a clean slate with the Department of Revenue. Some of the types of taxes included in theArizonatax amnesty program are personal income tax, gross receipts tax, withholding tax, and sales and use tax. But the program doesn’t provide help for every delinquent taxpayer — only a five-year period from 2004 through 2009 is included in theArizonatax amnesty program.

If you have unfiled tax returns for any year during the 2004 to 2009 period, then this is your opportunity to get your tax liability straightened out with the least amount of pain and suffering. Take advantage of theArizonatax amnesty program’s opportunity and have thePewLawCenterassist you, once and for all, in getting the Department of Revenue off your back.

You’ll avoid the typical penalties that the state would otherwise assess against your unpaid tax liability – amnesty abates the civil penalties. Without amnesty, for every year that you failed to pay income taxes, the state can assess a penalty of up to 25% (that’s 25% on each year the return remains unfiled and the tax unpaid). Under amnesty, interest is charged for each year the tax is unpaid, but at a significantly reduced rate of 3%.

Who Is Eligible for the Arizona Tax Amnesty Program?

If you owe back taxes for the 2004 – 2009 tax period, then you may be eligible for the Arizona amnesty program. For those businesses and individuals who already received a Department of Revenue tax notice or tax bill already, however, then amnesty is not an option.

Did you receive a notice from the Internal Revenue Service (IRS) telling you that you didn’t properly account for your income? If the IRS notified you of a federal income tax problem, then your state computations will be off as well, so contact the Pew Law Center today for help. Also, some items are taxable by the state, but not at the federal level, such as interest on municipal bonds issued by other states. Consequently, your federal income tax return can be correct, while your state income tax return is incorrect.

The tax liabilities that are included in the amnesty program for individual taxpayers and business taxpayers include un-reported and under-reported taxes, incorrect deductions, exemptions, credits, unfiled returns, and delinquent tax payments. If your business did not pay sales tax or did not forward withholdings from employee wages to the state as required, then amnesty may be available.

If you’ve already entered into a closing agreement with the state to pay back taxes, you cannot avail yourself of the amnesty program. If you’ve been audited and the audit determination is final, then there is no amnesty for that audited period. However, if you are currently being audited, but the audit is not final, then you may be eligible for the Arizona tax amnesty program. And for those who are at the center of a criminal case for tax fraud, criminal non-payment of taxes, criminal failure to file returns, or are under a pending criminal investigation as of January 1, 2011, then amnesty is unavailable to you.

What Should You Do Now? Call the Pew Law Center!

A detailed application must be completed and submitted to the Department of Revenue by October 1, 2011. Any back taxes that you owe and associated interest for the periods at issue must also be submitted to take advantage of the Arizona tax amnesty program. If you think you may be eligible, or if you are unsure and need a tax attorney to determine if you are eligible for amnesty, then call the Pew Law Center immediately. Tax attorney Lawrence ‘D’ Pew will review your case and determine precisely what options are available to you, including the possibility that you will qualify for the Arizona tax amnesty program.

Resources:

Yuma Sun: Arizona to Hold 30-Day Income Tax Amnesty

Senate Bill 1616

 

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