Shed Skeletons in the Closet with the 2015 Arizona Amnesty Program
Arizona legislators enacted S.B. 1471 earlier this year which provides for tax amnesty between September 1, 2015 and October 31, 2015. The 2015 Arizona amnesty program provides relief from civil penalties and interest for tax liabilities that have been or could have been assessed for any applicable tax period without the need to show reasonable cause or the absence of willful neglect. The applicable tax period is any period ending before January 1, 2014 if the taxpayer is filing annually, or tax periods ending before February 1, 2015 for other taxpayers.
Qualifying for Arizona amnesty relief requires that you file an application during the amnesty period. All returns and reports, including amended returns and reports, for the tax periods must be included. The application must also include a payment for the tax due.
The statute provides that any taxpayer meeting the qualifying criteria will not be subject to an administrative, civil or criminal action for failure to comply with the tax requirements. Submitting the application does constitute a waiver of all available administrative and judicial rights of appeal that have not expired as of the date of the application. Those rights are retained, however, for any additional tax subsequently assessed as the result of an audit by the department.
Not all taxpayers will qualify for amnesty. The following taxpayers may not participate in the program:
- A taxpayer that is party to any criminal investigation or litigation pending on January 31, 2015, in any US or Arizona court for fraud or failure to file or pay tax.
- A taxpayer who has previously been subject to a tax-related criminal investigation, indictment or prosecution that resulted in a conviction, guilty plea or plea of no contest.
- A taxpayer that has been convicted of a crime related to any period or assessment of a tax that is the basis for the penalty or interest.
- A taxpayer with a closing agreement with the Arizona Department of Revenue for the tax periods included in the recovery application.
- A taxpayer that does not include the payment for the tax due with the application.
The last Arizona amnesty program was made available in May 2009, so it may be some time before this opportunity is made available again. If you have unresolved Arizona tax liabilities, now is a great time to put them to rest.
Benjamin Podraza, CPA/PFS, MTAX, CGMA
August 10, 2015