Title 42 — Taxation
14 chapters · 841 sections in this title.
A.R.S. § 42-2001 Definitions
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In this article, unless the context otherwise requires: 1. "Confidential information": (a) Includes the following information whether it concerns individual taxpayers or is aggregate information for specifically identified taxpayers: (i) Returns and reports filed with the departm…
A.R.S. § 42-2002 Disclosure of confidential information prohibited
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A. A person, including a former employee or agent of the department or the office of administrative hearings or a person previously having an administrative duty for the department or the office of administrative hearings, who has received confidential information while an employ…
A.R.S. § 42-2003 Authorized disclosure of confidential information
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A. Confidential information relating to: 1. A taxpayer may be disclosed to the taxpayer, its successor in interest or a designee of the taxpayer who is authorized in writing by the taxpayer. A principal corporate officer of a parent corporation may execute a written authorization…
A.R.S. § 42-2004 Violation; classification
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A disclosure of confidential information in violation of this article is a class 1 misdemeanor. A knowing disclosure of confidential information in violation of this article is a class 6 felony.
A.R.S. § 42-2051 Arizona taxpayer assistance office; taxpayer problem resolution officer; duties
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A. The Arizona taxpayer assistance office is established as an office in the department. The employees of the office shall be selected by the director. The manager of the taxpayer assistance office is the taxpayer problem resolution officer. The office reports directly to the dir…
A.R.S. § 42-2052 Erroneous advice or misleading statements by the department; abatement of penalties and interest; definitions
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A. Notwithstanding sections 42-1123 and 42-1125, no interest or penalty may be assessed on an amount assessed as a deficiency if either: 1. The deficiency assessed is directly attributable to erroneous written advice furnished to the taxpayer by an employee of the department acti…
A.R.S. § 42-2053 Procedures involving taxpayer interviews
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A. On the request of a taxpayer, and under circumstances prescribed by the department, an employee of the department, in connection with any interview with the taxpayer that relates to a deficiency in payment of any tax owed to the department, shall: 1. Conduct the interview in t…
A.R.S. § 42-2054 Disclosure of taxpayer information
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On the written request of a taxpayer, information relating to the taxpayer may be disclosed, if the disclosure does not violate article 1 of this chapter.
A.R.S. § 42-2055 Taxpayer assistance orders
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A. The problem resolution officer, with or without a formal written request from a taxpayer, may issue a taxpayer assistance order that suspends or stays an action or proposed action by the department if, in the problem resolution officer's determination, a taxpayer is suffering …
A.R.S. § 42-2056 Closing agreements in cases of extensive taxpayer misunderstanding or misapplication; attorney general approval; rules; definition
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A. If the department determines that noncompliance with tax obligations results from extensive misunderstanding or misapplication of provisions of this title or title 43 it may enter into closing agreements with those taxpayers under the following terms and conditions: 1. Extensi…
A.R.S. § 42-2057 Agreement for installment payments of tax
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A. The department may enter into an agreement with a taxpayer to allow the taxpayer to satisfy a liability for any tax by means of installment payments. The department may require a taxpayer who requests an installment payment agreement to complete a financial report in such form…
A.R.S. § 42-2058 Basis for evaluating employee performance
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A. The department shall establish procedures to monitor the performance of department employees that include, if applicable, using evaluations obtained from taxpayers. B. Fair and equitable treatment of taxpayers is a criterion for evaluating employee performance, including being…
A.R.S. § 42-2059 Additional audits or proposed assessments prohibited; exceptions
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A. When the department completes an audit or the findings of a managed audit are accepted by the director or approved on appeal and a deficiency has been completely determined under section 42-1108 or chapter 1, article 6 of this title, the taxpayer's liability for the particular…
A.R.S. § 42-2060 Refund if items of income transfer from one year to another
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A. Notwithstanding any statute of limitations provided in this title or title 43: 1. Any overpayment of taxes that is paid pursuant to title 43, that is due a taxpayer for any year and that results from a transfer of items of income or deductions, or both, to or from another year…
A.R.S. § 42-2061 Expedited review of jeopardy assessments
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A. Within thirty days after the day on which the department furnishes the written notice described in section 42-1111, subsection A, the taxpayer may request the department to review the action taken as provided in section 42-1251. Within fifteen days after the request for review…
A.R.S. § 42-2062 Abatement of penalties and fees; definition
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A. If a taxpayer has been assessed a penalty or fee pursuant to section 42-1107, 42-1125, 42-1126, 43-581 or 43-582, the department, on written application by the taxpayer, shall abate the penalty or fee if it determines that the conduct, or lack of conduct, that caused the asses…
A.R.S. § 42-2063 Department responsibilities; decision deadlines; definition
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A. The department shall attempt to issue a decision from the hearing officer within ninety days after the date of a formal hearing or after the last post-hearing brief is due, whichever is later. If the department expects the decision to be delayed, the department shall notify th…
A.R.S. § 42-2064 Reimbursement of fees and other costs; definitions
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A. A taxpayer who is a prevailing party may be reimbursed for reasonable fees and other costs related to an administrative proceeding that is brought by or against the department in connection with an assessment, determination, collection or refund of any tax listed in section 42…
A.R.S. § 42-2065 Abatement of interest for errors or delays caused by the department
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A. The director, in the director's discretion, may abate all or part of any assessment if additional interest has accrued on: 1. A deficiency due to any unreasonable error or delay by an officer or employee of the department acting in the employee's official capacity. 2. Any paym…
A.R.S. § 42-2066 Statute of limitations on tax debts
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A taxpayer's obligations for any tax, interest or penalty required to be collected by the department for any tax period are extinguished, if not previously satisfied, ten years after the amount of tax determined to be due becomes final unless one of the following circumstances ap…
A.R.S. § 42-2067 Limitation on the use of pseudonyms by department employees
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A. Employees of the department shall not use pseudonyms when interacting with the public unless the director or the director's designee first determines on written request that the use of the pseudonym is appropriate. The employee's request must include adequate justification for…
A.R.S. § 42-2068 Suspension of running of period of limitations during taxpayer disability
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A. Notwithstanding section 42-1106, the running of the statute of limitations for refunds is suspended if an individual, as defined in section 43-104, is financially disabled and eligible for equitable tolling of the statute of limitations for refunds under section 6511(h) of the…
A.R.S. § 42-2069 Taxpayer communications with practitioners; confidentiality; definitions
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A. With respect to tax advice, the same common law protections of confidentiality that apply to a communication between a taxpayer and an attorney also apply to a communication between a taxpayer and a federally authorized tax practitioner to the extent that the communication wou…
A.R.S. § 42-2070 Prohibited audit techniques
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The department shall not use financial status or economic reality examination techniques to determine the existence of unreported income of any taxpayer, except in the following circumstances: 1. The director may authorize the use of financial status or economic reality examinati…
A.R.S. § 42-2071 Reimbursement of bank costs caused by erroneous tax levies
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B. A taxpayer who claims reimbursement under this section shall file a claim with the department of revenue. The department of revenue shall transmit the claim to the department of administration where it shall be evaluated and paid, if verified, pursuant to title 41, chapter 3.1…
A.R.S. § 42-2072 Stay of enforcement actions pending offer in compromise
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A. A taxpayer who is unable to pay all of a liability may make an offer in compromise for abatement of part of the liability on the grounds that the remainder is uncollectible pursuant to section 42-1004, subsection B, paragraph 1. B. While the offer is under consideration by the…
A.R.S. § 42-2073 Report of employee misconduct; definition
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A. On or before March 1 of each year, beginning in 2001, the director shall submit a detailed report of employee misconduct verified as valid to the governor, the speaker of the house of representatives and the president of the senate. The report shall include: 1. All categories …
A.R.S. § 42-2074 Equitable relief from joint and several liability
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A. The director may relieve an individual from joint and several liability under the following circumstances: 1. Taking into account all of the facts and circumstances, it is inequitable to hold the individual liable for all or part of any unpaid tax or any deficiency. 2. Relief …
A.R.S. § 42-2075 Audit duration; applicability; initial audit contact
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A. An audit of a taxpayer's return or claim for refund shall not exceed two years after the date of initial audit contact to the issuance of a notice of proposed deficiency assessment or proposed overpayment, except: 1. An audit of a fraudulent tax return. 2. An audit delayed as …
A.R.S. § 42-2076 Audit results; documentation
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At the time when the department issues a deficiency assessment or denies all or part of a claim for refund, the department shall also provide the taxpayer and, if applicable, the taxpayer's authorized representative with a written explanation of all adjustments made, including th…
A.R.S. § 42-2077 Distribution of tax decisions; definitions
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A. Beginning October 1, 2006, the agencies listed in this section shall provide tax decisions to the law libraries of Maricopa county, the Arizona state university college of law, the university of Arizona college of law, the state law library and the Arizona state library, archi…
A.R.S. § 42-2078 New interpretation or application of law; affirmative defense; definition
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A. Unless expressly authorized by law, the department shall not apply any newly enacted law retroactively or in a manner that will penalize a taxpayer for complying with prior law. B. If the department adopts a new interpretation or application of any provision of this title or t…
A.R.S. § 42-2079 Suspension of liabilities by reason of disasters, terroristic or military actions or states of emergency; definitions
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A. Notwithstanding sections 42-1107 and 42-1123, the director shall specify a period of up to one year to extend any due date and suspend any penalty or interest that would ordinarily accrue during that time for any affected taxpayer in any of the following circumstances: 1. Sect…
A.R.S. § 42-2080 Rulings, procedures, notices and other administrative announcements; notice; public comment; records; confidentiality; exceptions
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B. The department shall establish and maintain on its website a publicly accessible record of all draft and final rulings, procedures, notices and administrative announcements and shall prominently announce additions, modifications and other changes to this record on the departme…
A.R.S. § 42-2101 Private taxpayer rulings; request; revocation or modification; taxpayer information ruling; definitions
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A. The department may issue private taxpayer rulings to taxpayers and potential taxpayers on request. Each request shall be in writing and shall: 1. State the name, address and, if applicable, taxpayer identifying number of the taxpayer or potential taxpayer who requests the ruli…
A.R.S. § 42-2151 Providing business and employer identifiers, licenses, numbers and other forms
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A. The department of revenue and the department of economic security shall cooperatively prepare and provide a single form by which any person desiring to engage in business may obtain: 1. Employer identification numbers for income tax withholding and unemployment insurance purpo…
A.R.S. § 42-2152 List of agencies having authority over starting and conducting business
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The department of revenue shall: 1. Obtain and keep on file a list of the agencies, boards, commissions and departments, their addresses and telephone numbers and the subjects over which they have authority. 2. Provide a copy of this list to any person requesting a form under sec…
A.R.S. § 42-2153 Questionnaire of proposed business
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The department of revenue shall: 1. Develop a questionnaire that a person desiring to engage in business may fill out and return to the department. The questionnaire shall elicit information about the nature, size, form and operations of the proposed business. 2. Forward copies o…
A.R.S. § 42-2154 Limitation on requirements of article
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This article does not: 1. Require any person to utilize the forms or procedures provided for in this article. 2. Eliminate other registration and licensing efforts by the department of revenue and the department of economic security.
A.R.S. § 42-2201 Election for relief from joint and several liability; definition
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A. Notwithstanding section 43-301, subsection C and section 43-562, after filing a joint income tax return pursuant to section 43-309, a taxpayer may seek relief from joint and several liability under the following circumstances: 1. There is an understatement of tax attributable …
A.R.S. § 42-2202 Separate liability election; definition
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A. Notwithstanding section 43-301, subsection C and section 43-562, a taxpayer who filed a joint income tax return under section 43-309 for a taxable year and who meets the following requirements may elect to limit the taxpayer's liability pursuant to this section with respect to…
A.R.S. § 42-2203 Protection from application of joint overpayment against spouse's delinquencies or debts; recovery of protected monies; appeal
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A. Notwithstanding section 42-1122, at the time of filing a joint income tax return pursuant to section 43-309, a taxpayer may apply to the department for protection of the taxpayer's share of any overpayment or refund from setoff for the past due state taxes, child support, spou…
A.R.S. § 42-2251 Definitions
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In this article, unless the context otherwise requires: 1. "Computer software executable code" includes: (a) Any object code, machine code or other code that is readable by a computer when loaded into its memory and used directly by the computer to execute instructions. (b) Any r…
A.R.S. § 42-2252 Protection from order to produce computer software source code; exceptions
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A. Except as provided in section 42-2253, the department shall not issue any subpoena duces tecum under section 42-1006 or 42-1112 or commence any proceeding or action to enforce any subpoena duces tecum to produce any computer software source code. B. Subsection A of this sectio…
A.R.S. § 42-2253 Authorized subpoenas
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A. Notwithstanding section 42-2252, the department may issue a subpoena duces tecum for computer software if: 1. The department is unable to otherwise reasonably ascertain the correctness of any item on a return from either: (a) The taxpayer's books, papers, records or other data…
A.R.S. § 42-2254 Safeguards and protections
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A. Any software or related materials that are provided to the department under this article are subject to the safeguards provided in this section. B. In any court proceeding to enforce a subpoena duces tecum for any portion of software, the court may receive evidence and issue a…
A.R.S. § 42-2301 Definitions
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In this article, unless the context otherwise requires: 1. "Limited managed audit agreement" means a managed audit agreement that is limited in scope to certain periods, activities, lines of business, geographic areas or transactions, including tax on the receipts of certain sale…
A.R.S. § 42-2302 Managed audit agreements
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A. On application by a taxpayer, the director, in the director's sole discretion, may agree to a managed audit with the taxpayer. The managed audit agreement shall: 1. Be signed by the taxpayer and the director. 2. Contain a declaration by the taxpayer that all statements of fact…
A.R.S. § 42-2303 Managed audit operations; appeal
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A. The taxpayer or the taxpayer's representative shall furnish written findings of the managed audit to the director. B. The director shall review the written findings and may examine records and perform other reviews that the director deems necessary to verify that the managed a…
A.R.S. § 42-2304 Interest and penalties; refunds
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A. Notwithstanding section 42-1125, the director shall not assess any penalties unless the managed audit discloses that the taxpayer committed fraud or wilful tax evasion or that the taxpayer collected monies that were represented as tax but were not remitted to the state. B. Not…