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State of Arizona
Department of Revenue
 

Arizona Tax Recovery Program

From September 1 through October 31, 2016, the State of Arizona is offering an opportunity for those who live, work, or do business in Arizona to pay any back taxes owed to the state without penalty, interest or criminal prosecution for those who qualify.

Individuals and businesses owing back taxes may apply for the Tax Recovery Program. This includes non-resident and part-year resident individuals, as well as out-of-state businesses.

The following taxes are included in the Tax Recovery Program: Individual Income, Corporate Income, Transaction Privilege (Sales) Tax.  (Note: TPT nonprogram city taxes are NOT included. Click here for a list of the nonprogram cities.)

The taxable periods that are eligible for tax recovery are for those taxes due on an annual basis for any tax year ending before January 1, 2014.  For example, an individual that owes back taxes for nonpayment or underpayment of individual income taxes may request tax recovery for tax years 2013 and prior.

Eligible taxable periods for monthly and quarterly filings are for those tax periods ending before February 1, 2015.

Taxpayers may elect to pay the tax liability in full on or before October 31, 2016 or elect to pay the full tax liability in installments over a 24 month period, ending no later than October 31, 2018.

Tax Recovery tax returns MUST be accompanied by the completed Tax Recovery application form, and MUST be received with at least 33% of the full tax liability.

Forms

Tax Recovery Application Form
Arizona Tax Recovery Individual Gross Income Tax Return

[Fillable Form]

For all other tax forms, please go to the Form page. 

Press Release

What is the Tax Recovery Program?

The Arizona Tax Recovery Program allows you to settle your tax bill at a reduced cost.

If tax recovery is granted, the Arizona Department of Revenue will waive or abate civil penalties and interest that were or could have been assessed for the periods covered by the application. No civil, administrative, or criminal actions will be brought against you for the periods covered by the application.

Taxpayers who cannot pay the full tax liability by October 31, 2016 and elect to pay in installments MUST pay 33% of the liability by October 31, 2016, 66% of the liability by October 31, 2017 and 100% of the liability by October 31, 2018.

The Arizona Legislature required the Department of Revenue to establish the Tax Recovery Program. Please see Laws 2016, Chapter 125, House Bill 2708, Section 17 of the 2nd Regular Session of the 2016 for the statute.

Who is Eligible?

Tax recovery is available to taxpayers who:

  • Have an existing liability for tax due and received a notice from the Department.
  • Failed to file a tax return that was due during the periods covered under the Tax Recovery Program.
  • Failed to report all income or all the tax, and associated interest and penalties that were due.
  • Incorrectly claimed credits or deductions.
  • Misrepresented or omitted any tax due.
  • Non-residents or part-year residents who received income that may be taxable in Arizona.
  • Are out-of-state and multi-state businesses.

Who Is Not Eligible?

Tax recovery is not available to taxpayers who:

  • Are under audit and that audit has not become final.
  • Are a party to any criminal proceeding with respect to any tax imposed by any law of Arizona and required to be collected by the Department that is pending on January 1, 2016 for:
    • Failure to file;
    • Failure to pay;
    • Fraud.
  • Are considered a party to a criminal proceeding with respect to these items if any of the following apply:
    • Are under criminal investigation.
    • Are involved in an administrative proceeding relating to criminal activity.
    • Are a party to criminal litigation in any United States or Arizona court.
  • Have been the subject of a past tax-related criminal investigation, indictment or prosecution that resulted in a conviction, a guilty plea or a plea of no contest.
  • Have been convicted of a crime relating to any period or assessment of a tax that is the basis of the penalty or interest with respect to which tax recovery is sought.
  • Are a party to a closing agreement with the Department for the tax periods included in the Tax Recovery Application.

For questions or assistance, please call 602-716-6706 in the Phoenix area or toll free from area codes 520 and 928, 1-844-660-2400.