Often penalties are assessed by a taxing agency and the taxpayer has grounds for asking the government to forgive the penalties based on “reasonable cause”. Some typical reasonable cause requests for penalty reduction or “abatement” are serious illness or death of the taxpayer, fire, casualty or natural disaster, and errors by the taxing authority.
The Arizona Department of Revenue (ADOR) has released a new form, Arizona Form 290 Request for Penalty Abatement for taxpayers to use to request an abatement of non-audit related penalties. Per the instructions, Form 290 should not to be used if the penalty at issue is the result of an audit.
Form 290 can be found on the ADOR Website here and can be used for individual income tax, transaction privilege and use tax, corporate income tax, withholding tax, and other taxes, such as waste tire. Taxpayers have to provide identifying information as well as the specific tax period(s) they want considered for abatement and the dollar amount for which they are requesting abatement.
Taxpayers also need to explain in detail their reason(s) for requesting the abatement, including an explanation as to why there is reasonable cause for the tax returns and/or payments being late, and provide documentation that supports the basis for their request.
You can mail or fax Form 290 to the ADOR. The mailing address is Penalty Review Unit, Division 9, Arizona Department of Revenue, 1600 W Monroe St, Phoenix, AZ 85007-2612. The fax number is (602) 716-9912.
Melinda Nelson, CPA