tax adminstration; federal
conformity
Makes changes to various Department of Revenue (DOR) administrative practices.
History:
Current law may be construed to imply that Arizona statutes of limitation waivers can be applied as a blanket waiver on the taxpayer’s entire tax return, even though that same taxpayer has received a federal waiver for only specific items on the tax return. This bill eliminates that implied option by specifically stating that state waivers apply to only those income items included on the federal waiver.
Currently by statute, DOR may only release confidential tax information to the principal of a corporation or partnership. However, some entities conducting business in the state of Arizona are multinational corporations, whose principals do not reside in Arizona or even the United States. In such cases, locating the principal officer may be difficult.
Current law may be construed to imply that DOR has the authority to choose whether a taxpayer should file a copy of the federal audit or an actual amended tax return with DOR after a federal audit. This bill allows the taxpayer to choose the reporting method.
· Clarifies that the Arizona statute of limitation waiver applies only to those income and expense items waived on the taxpayer’s federal waiver.
· Allows a principal corporate officer to execute written authorization for the receipt of confidential information for a controlled subsidiary.
· Expands who may receive confidential tax information between DOR and corporations. In addition to the corporate principal officer, any authorized person may receive the information; if they are designated by the principal officer on the Corporate Board of Directors (or similar body).
· Clarifies that taxpayers have the choice to file a copy of the final determination of their federal audit or an amended tax return with DOR.
· If the taxpayer disagrees with the final determination they can request DOR to recalculate the state tax liability and the recalculations will not be considered a state audit.
· Makes technical corrections.