ARIZONA STATE SENATE
Phoenix, Arizona
tax administration; federal
conformity
Purpose
Makes changes to various
Department of Revenue (DOR) administrative practices.
Background
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 principals is
difficult. Broadening the pool of
allowable individuals to whom DOR may disclose confidential information eases
the ability of tax preparers to obtain authentic powers of attorney.
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 to DOR. The estimated additional cost or work burdens for DOR related to
this change has not yet been determined.
Provisions
1. Limits the Arizona statutes of limitation waiver to only those income items waived on the taxpayer’s federal waiver.
2. Broadens the pool of allowable individuals to whom DOR may release confidential corporate or partnership taxpayer information to include:
·
Corporate
or partnership employees who submit an authorization statement, signed under
penalty of perjury, to Department of Revenue (DOR); and
·
Persons
who are listed on the corporate or partnership tax return.
3. Grants taxpayers the choice to file a copy of the federal audit or an amended tax return with DOR. Current law may be construed to imply that DOR has the authority to choose which method.
4. Allows taxpayers to request DOR to recalculate the state tax liability as a result of a federal audit and specifies that such recalculations will not be considered a state audit by DOR.
5. Makes technical changes.
6. Provides for a general effective date.
Prepared by Senate Staff
January 18, 2001