Arizona Tax Recovery Program

Your Guide to State, Local, Federal, Estate + International Taxation

As mentioned in a previous blog posted in August, Arizona is currently promoting a tax recovery program from September 1 through October 31, 2016. The purpose of the program is to allow you to settle your tax bill at a reduced cost. Individuals and businesses owing back taxes may apply for the program; this includes Arizona non-residents and part-year residents.

The Arizona Department of Revenue has released two forms that you must fill out to apply for the program: a Tax Recovery Application Form and an Arizona Tax Recovery Individual Gross Income Tax Return. You will only need to complete one application even if you are applying for the recovery of more than one tax period or more than one type of tax. If and when tax recovery has been granted, the Arizona Department of Revenue will waive or abate civil penalties and interest that have been assessed or could have been assessed for the periods covered in the application. In addition, there will be no civil, administrative, or criminal actions brought against you for the periods covered in the application.

You may elect to pay the full tax liability on or before October 31, 2016 or you can elect to pay the tax liability in installments over a 24 month period. If you choose the single payment option, the full payment must be included with the application. If you choose to pay through installments, you must include at least 33% of the full tax liability with the application.

Some of the eligibility requirements in relation to the taxpayers applying are:

  • Not currently under an audit
  • Have an existing liability for tax due and have received a notice from the AZ Department of Revenue
  • Incorrectly claimed credits or deductions
  • Misrepresented or omitted any tax due
  • Non-residents or part-year residents who received income that may be taxable in Arizona
  • Not considered to be a party to a criminal proceeding with respect to a criminal investigation, involvement with an administration proceeding in relation to criminal activity or criminal litigation in and U.S. or Arizona court

For a full list of eligibility requirements, visit the Arizona Department of Revenue website.

By Kelsey Olsen