Last year’s Arizona tax amnesty program brought in $55 million more than expected, so the Legislature decided to try the program again for 2016. From September 1, 2016 to October 31, 2016, the State of Arizona will again be offering a tax amnesty program, which will allow the Department of Revenue (ADOR) to waive all civil penalties and interest for tax liabilities that have been or could be assessed for taxpayers that comply with the program requirements. The tax liabilities that are covered include all taxes and surcharges assessed by ADOR (including income, payroll, and state TPT taxes) except luxury and withholding taxes for the tax periods covered. The tax period for annual returns (like income tax returns) is for all taxable periods ending before January 1, 2014. For all other taxpayers, the program applies to any taxable period ending before February 1, 2015 (the same periods covered under last year’s amnesty program).
To participate in the program, taxpayers must apply within the two-month window and must either include payment of the tax that is due or start making payments on an annual installment agreement through October 31, 2018. Certain taxpayers cannot participate (like those that are subject to an audit, have already entered into a closing agreement with ADOR for the tax period, or were party to a criminal investigation). Although you may save significant interest and penalties by participating in the program, keep in mind that you forfeit all administrative and judicial appeal rights related to the tax liabilities included in the application.
If you would like additional information about this short-term opportunity to prevent future assessments of interest and penalties, please give us a call so we can discuss your options.
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