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PENALTY ABATEMENT
This publication is for general information only. It is parent, child, brother, sister, in-law, grandparent
designed to assist taxpayers in understanding the or grandchild.
process of requesting abatement of penalties. For b. Delay caused by unavoidable absence of the
complete details, refer to the Arizona Revised Statutes taxpayer. “Unavoidable absence” is defined as
and the Arizona Administrative Code. In case of an absence which is incapable of being
inconsistency or omission in this publication, the prevented. Vacation time is not acceptable as
language of the Arizona Revised Statutes and the an unavoidable absence.
Arizona Administrative Code will govern. Additional
Entity returns
information can be found in the Department of
In the case of corporate, estate, trust, or other
Revenue’s General Tax Ruling, GTR 04-2.
business returns, delay caused by unexpected
Arizona administers a penalty system designed to ensure serious illness of the individual with sole
a fair and consistent program of tax compliance. It is the authority to execute the return, or member of
Department of Revenue's goal, through consistent such individual’s immediate family.
handling of abatement requests, to ensure fair and equal
Delay caused by unavoidable absence of the
treatment for all taxpayers. The following will assist a
individual with sole authority to execute return.
taxpayer when considering a request for penalty
abatement. Keep in mind, a decision by the department If unexpected illness is the basis of the request for
is based on information and evidence provided by you, penalty abatement, the department shall require proof
the taxpayer. A prompt and consistent reply can only be of the date of illness. This proof includes, but is not
achieved if the department receives documented and limited to, doctor statements.
specific information with your request. 3. Death
NOTE: Links to Arizona Statute and the Arizona a. In the case of individual returns, delay caused
Administrative Code can be found at www.azleg.gov. by the death of a taxpayer or member of
Decisions, rulings, and procedures can be found under taxpayer’s immediate family. “Immediate
the Legal Research tab at www.azdor.gov family” has the same meaning as defined in
number 2 above.
On What Basis Can Penalties be Abated? b. In the case of corporate, estate, trust, or other
Statutes provide that the department may abate penalties business returns, the delay must have been
for reasonable cause. A taxpayer may establish caused by the death of an individual with sole
reasonable cause by providing facts and circumstances authority to execute the return, or a member of
that show the taxpayer exercised ordinary business care such individual’s immediate family.
and prudence in the handling of filing and payment of
their taxes, the condition which created the assessment c. For both individual and business returns, a
is not a recurring problem with that taxpayer, and there reasonable time frame should apply for filing
are specific reasons why the return was not filed and the return and payment of tax. A copy of a
paid timely. There is no statutory provision for death certificate must be provided.
abatement of interest based on reasonable cause. 4. Absence of records
The taxpayer is unable to obtain records necessary
Situations Where Reasonable Cause May Exist: to determine the amount of tax due for reasons
Following are some situations where reasonable cause beyond the taxpayer's control. An example would
may exist. There may be other situations where be a fire which destroys the taxpayer’s records.
reasonable cause may exist, which is why it’s important
for you to provide specific details or reasons that are Situations Where Reasonable Cause May NOT
directly attributable to the failure to file or pay timely Exist:
for the periods you are requesting penalty abatement. 1. Ignorance of the law
Circumstances beyond the control of the Taxpayer while This does not meet the standard of reasonable cause
using reasonable and prudent business practices: for any tax type. The taxpayer has the responsibility
to be knowledgeable of the laws under which they
1. Mathematical errors
operate.
A mathematical error on a timely filed tax return.
2. Delegation of duties
2. Unexpected illness or unavoidable absence
Businesses should exercise caution when delegating
Individual returns
responsibilities to insure job assignments are carried
a. Delay caused by serious illness of the taxpayer,
through and controls are in place to assure the
or member of the taxpayer’s immediate family.
timely filing and payment of taxes. It is not
“Immediate Family” is defined as a spouse,
Arizona Department of Revenue Pub 700 Revised June 2015
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