Arizona State Tax Debt

Debts owe to the State of Arizona are handled by the Arizona Department of Revenue. Settlements and are handled very much the same way as they are with the IRS. There are some important differences. I advise clients to first file and settle with the IRS and then file and settle with the Arizona Dept. of Revenue (AZDOR) in most cases. If you are filing old returns from prior years, Arizona will often wait until the IRS accepts the federal return before accepting a return filed with them for the same year. Also, the State of Arizona is much more aggressive on collecting taxes on smaller amounts owed than the IRS is on larger amounts owed.

It is best to make your decisions on settlement once you know what you will owe to both the IRS and AZDOR and your ability to make payments on your combined tax debt. There are some situations when settling up with the State before settling with the IRS makes more sense. A consultation with a professional representative will help avoid painting yourself in a corner on one tax debt and leave you vulnerable to serious financial troubles in dealing with the other.

Scott Allen E. A.

Tax Debt Advisors, Inc