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(a) Notwithstanding section 19-540(a), 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 city acting in an official capacity in response to a specific request from the taxpayer and not from the taxpayer's failure to provide adequate or accurate information.
(2) All of the following are true:
a. A tax return form prepared by the tax collector contains a statement that, if followed by a taxpayer, would cause the taxpayer to misapply this chapter.
b. The taxpayer reasonably relies on the statement.
c. The taxpayer's underpayment directly results from this reliance.
(b) Each employee of the tax collector, at the time any oral advice is given to any person, shall inform the person that the tax collector is not bound by such oral advice.
(c) For purposes of this section, "tax return form" includes the instructions that the tax collector prepares for use with the tax return form.
(Ord. No. 8784, § 14, 12-2-96)
(a) Unless expressly authorized by law, the tax collector shall not apply any newly enacted legislation retroactively or in a manner that will penalize a taxpayer for complying with prior law.
(b) If the tax collector adopts a new interpretation or application of any provision of this chapter or determines that any provision applies to a new or additional category or type of business and the change in interpretation or application is not due to a change in the law:
(1) The change in interpretation or application applies prospectively only unless it is favorable to taxpayers.
(2) The tax collector shall not assess any tax, penalty or interest retroactively based on the change in interpretation or application.
(c) For purposes of subsection (b), "new interpretation or application" includes policies and procedures which differ from established interpretations of this chapter.
(d) [Reserved.]
(Ord. No. 9652, § 9, 1-14-02; Ord. No. 10287, § 2, 6-13-06)
(a) Determination of Additional Taxes. If the taxpayer has failed to file a return, or if the tax collector is not satisfied with the return and payment of the amount of tax required, and additional taxes are determined by the tax collector to be due, the tax collector shall deliver written notice of his determination of a deficiency to the taxpayer; and deficiency, plus penalties and interest, shall be due and payable forty-five (45) days after receipt of the notice and demand. Such additional taxes shall bear any applicable civil penalties and interest as provided in section 19-540, and every such notice of a determination of an additional amount due shall be assessed within the limitation period provided in section 19-550.
(1) When a return is filed. If the tax collector is not satisfied with a return and payment of the amount of tax required by this article to be paid to the city, he may examine the return or examine the records of the taxpayer, and redetermine the amount of tax, penalties and interest required to be paid, for any periods available to the tax collector under section 19-550, based upon the information contained in the return or records or based upon any information within his possession or which comes into his possession.
(2) When no return is filed. If any person fails to make a return, the tax collector may make an estimate of the amount of tax due under this article and compute any applicable penalties and interest due, based upon any information within his possession or which comes into his possession.
(b) Estimates by the Tax Collector. Any estimate made by the tax collector is to be made on a reasonable basis. The existence of another reasonable basis of estimation does not, in any way, invalidate the tax collector's estimate. It is the responsibility of the taxpayer to prove that the tax collector's estimate is not reasonable and correct, by providing sufficient documentation of the type and form required by this article or satisfactory to the tax collector.
(Ord. No. 6674, § 3, 3-23-87)
(a) If the tax collector determines that noncompliance with tax obligations results from extensive misunderstanding or misapplication of provisions of this chapter it may enter into closing agreements with those taxpayers under the following terms and conditions:
(1) Extensive misunderstanding or misapplication of the tax laws occurs if the tax collector determines that more than sixty (60) percent of the persons in the affected class have failed to properly account for their taxes owing to the same misunderstanding or misapplication of the tax laws.
(2) The tax collector shall publicly declare the nature of the possible misapplication and the proposed definition of the class of affected taxpayers and shall conduct a public hearing to hear testimony regarding the extent of the misapplication and the definition of the affected class.
(3) If, after the public hearing, the tax collector determines that a class of affected taxpayers has failed to comply with their tax obligations because of extensive misunderstanding or misapplication of the tax laws it shall issue a tax ruling announcing that finding and publish the ruling in a newspaper of general circulation in the city and through the next two (2) model city tax code updates.
(4) A closing agreement under this section may abate some or all of the penalties, interest and tax that taxpayers have failed to remit, or the agreement may provide for the prospective treatment of the matter as to the class of affected taxpayers. All taxpayers in the class shall be offered the opportunity to enter into a similar agreement for the same tax periods.
(5) Taxpayers in the affected class who have properly accounted for their tax obligations for these tax periods shall be offered the opportunity to enter into an equivalent closing agreement providing for a pro rata credit or refund of their taxes previously paid.
(6) The closing agreement shall require the taxpayers to properly account for an pay such taxes in the future. If the taxpayer fails to adhere to such a requirement, the closing agreement is voidable by the tax collector and he may assess the taxpayer for the delinquent taxes. The tax collector may issue such a proposed assessment within six (6) months after the date that he declares that closing agreement void or within the period prescribed by section 19-550 of this chapter.
(b) Before entering into closing agreements pursuant to this section, the tax collector shall secure such approval as required by charter, ordinance or administrative regulation.
(c) After a closing agreement has been signed pursuant to this section, it is final and conclusive except on a showing of fraud, malfeasance or misrepresentation of a material fact. The case shall not be reopened as to the matters agreed upon or the agreement shall not be modified by any officer, employee or agent of the city. The agreement or any determination, assessment, collection, payment abatement, refund or credit made pursuant to the agreement shall not be annulled, modified, set aside or disregarded in any suit, action or proceeding.
(d) The tax collector shall report in writing its activities under this section to the mayor and city council on or before February 1 of each year.
(Ord. No. 8784, § 15, 12-2-96)
(a) Limitation When a Return Has Been Filed.
(1) Except as provided elsewhere in this section, the tax collector may assess additional tax due at any time within four (4) years after the date on which the return is required to be filed, or within four (4) years after the date on which the return is filed, whichever period expires later.
(2) However, if a taxpayer does not report an amount properly reportable which is in excess of twenty-five (25) percent of the taxable amount stated on the return, the tax collector, may assess additional tax due at any time within six (6) years after the date on which the return was filed.
(3) Any delay in commencement or completion of any examination by the tax collector, which is requested or agreed to in writing by the taxpayer, shall be excluded from the computation of any limitation period prescribed by this section, and the tax collector shall be entitled to make a determination for taxes due without exclusion of any such time period, and any limitation period shall be extended for a length of time equivalent to the period of the agreed upon delay.
(4) Any assessment of additional tax due by the tax collector shall be deemed to have been made by mailing a copy of a notice of audit assessment by certified mail to the taxpayer's address of record with the tax collector or by personal delivery of a copy of a notice of audit assessment to the taxpayer or his authorized agent.
(b) Suspension of Limitation Period. The limitation period on assessment shall be suspended for any period:
(1) The assets of the taxpayer are in the control or custody of the court in any proceeding before any court of jurisdiction within the United States of America, and for one hundred eighty (180) calendar days thereafter; or
(2) Which the taxpayer and the tax collector agree upon in writing.
(c) When No Return Filed; Fraudulent Return. In the case of a fraudulent return with the intent to evade tax, or the failure or refusal to file a return for any month, the tax collector may assess the amount of taxes payable for that month at any time, without any reliance by the taxpayer upon any time limitation provided elsewhere in this article.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 7446, § 2.13, 7-2-90; Ord. No. 8784, § 16, 12-2-96)
(a) Waiver of joint audit. A taxpayer that does not authorize a joint audit to be conducted for a tax jurisdiction is subject to audit by that tax jurisdiction at any time subject to the limitation provisions provided in section 19-550.
(b) Tax jurisdiction acceptance of joint audit. If the Arizona Department of Revenue intends to conduct an audit of a taxpayer, the cities or towns for whom a joint audit is being conducted may accept the audit by the Arizona Department of Revenue or may elect to have a representative participate, provided that no more than two city or town representatives in total may participate.
(1) If a city or town does not accept the audit as a joint audit, the city or town may not conduct an audit of the taxpayer for forty-two months from the close of the last tax period covered by the audit unless an exception applies to that taxpayer pursuant to A.R.S. Section 42-2059.
(2) If a joint audit is performed by a city or town, the Arizona Department of Revenue is not prohibited from conducting an audit that does not violate the provisions of A.R.S. Section 42-2059.
(Ord. No. 9569, § 2, 6-18-01)
(a) The tax collector may require the taxpayer to provide and may examine any books, records or other documents of any person who, in the opinion of the tax collector, might be liable for any tax under this article, for any periods available to him under section 19-550.
(b) In order to perform any examination authorized by this article, the tax collector may issue an administrative request for the attendance of witnesses or for the production of documents, as provided by regulation.
(c) If within sixty (60) days of receiving a written request for information in the possession of the taxpayer, the taxpayer fails or refuses to furnish the requested information, the tax collector may, in addition to penalties prescribed under section 19-540, impose an additional penalty of twenty-five (25) percent of the amount of any tax deficiency which is attributable to the information which the taxpayer failed to provide, unless the taxpayer shows that the failure was due to reasonable cause and not due to willful neglect.
(d) The tax collector may use any generally accepted auditing procedures, including sampling techniques, to determine the correct tax liability of any taxpayer. The tax collector shall ensure that the procedures used are in accordance with generally accepted auditing standards.
(e) The fact that the taxpayer has not maintained or provided such books and records which the tax collector considers necessary to determine the tax liability of any person does not preclude the tax collector from making any assessment. In such cases, the tax collector is authorized to use estimates, projections, or samplings, to determine the correct tax. The provisions of section 19-545(b), concerning estimates, shall apply.
(f) The tax collector shall give the taxpayer written notice of his determination of a deficiency by certified mail, to the taxpayer's address of record with the tax collector, and the tax deficiency, plus interest and penalties, is final forty-five (45) days from the date of receipt of the notice by the taxpayer, unless an appeal is taken pursuant to the provisions of sections 19-570 through 19-575.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8440, § 19, 1-23-95; Ord. No. 8784, § 17, 12-2-96)
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