Arizona Laws 42-1103.02. Understatement of taxpayer’s liability by return preparer; civil penalty; definition
A. The department may impose a civil penalty of two hundred fifty dollars against a return preparer who knew or reasonably should have known that an understatement of liability was on a return or claim for refund. The penalty under this subsection may be imposed only if there was not a realistic possibility that the position would be sustained on its merits and the position was not disclosed to the department in the return or in a statement attached to the return.
Terms Used In Arizona Laws 42-1103.02
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Department: means the department of revenue. See Arizona Laws 42-1001
- Wilfully: means , with respect to conduct or to a circumstance described by a statute defining an offense, that a person is aware or believes that the person's conduct is of that nature or that the circumstance exists. See Arizona Laws 1-215
B. The department may impose a civil penalty of one thousand dollars against a return preparer who wilfully made an understatement of liability on a return or claim for refund.
C. A return preparer is required to only pay eighty-five per cent of the imposed penalty if the payment is made within thirty days from the date of the receipt of notification that the penalty was imposed. A return preparer may not appeal to the department pursuant to section 42-1251 if the return preparer fails to file the appeal within thirty days from the date of the receipt of notification that the penalty was imposed. If there is a final order or decision stating that the return preparer did not make an understatement of liability in a return or claim for refund, the department shall refund any penalty amount paid and interest to the return preparer.
D. For the purposes of this section, "understatement of liability" means any understatement of the net amount payable with respect to any imposed tax or any overstatement of the net amount creditable or refundable with respect to any tax.