Individual Income Tax

While a taxpayer using the standard meal allowance (per diem) method does not have to keep records of actual costs, the taxpayer must still establish the time, place and business purpose of the travel. Only one-half of the per diem allowed for meals and incidental expenses may be deducted.

Taxpayer is not entitled to deduct as alimony payments representing a division of the retirement accounts of Taxpayer and his ex-spouse. The payments constituted property settlement.

Taxpayer, an Arizona resident, cannot claim a credit for income taxes paid to California because California allows a credit for residents of Arizona for income taxes paid to Arizona. Taxpayer might still be able to claim a credit in California under Cal. Rev. & Tax. Code § 19311.5 after the Arizona income tax has been paid.

Taxpayer is not entitled to a refund of taxes withheld by his employer because Taxpayer did not file a return within four years after the due date of the original return.

Taxpayer is entitled to interest abatement for 45 month period during which the protest was not worked because an auditor was not assigned to the matter. There are no grounds to abate remaining interest or tax.

Taxpayer cannot claim a deduction for a federal credit for mortgage interest if they claimed a mortgage interest deduction rather than a credit on their federal tax return.

Arizona income tax law did not conform to the federal provision that excluded up to $2,400 of unemployment compensation from federal gross income for tax year 2009. The definition of Arizona gross income for tax year 2009 did not allow the federal exclusion for unemployment compensation. The fact Taxpayers were not aware of the non-conformance is not a basis to abate an otherwise proper assessment.

Taxpayers could not deduct as Schedule C business expenses amounts they paid for their adult children’s racing activity

The definition of Arizona gross income for tax year 2009 did not allow the federal exclusion for $2,400 in unemployment compensation because the definition of Internal Revenue Code in the Arizona statutes never included that portion of the federal American Recovery and Reinvestment Act of 2009.

Arizona subtraction for compensation received for active service as a member of the armed forces of the United States did not apply to compensation from the United States Public Health Service because the Health Service does not fall within the definition of the armed forces.