Howard Fischer
Capitol Media Services
The Internal Revenue Service has no right to force 750,000 Arizona families who got a state income tax rebate last year to now pay federal taxes on the funds, Attorney General Kris Mayes said Thursday.
And she said if the agency doesn’t back off — and soon — she may sue, saying Arizonans need answers before the April 15 deadline to file their federal returns.
There was no immediate response from the IRS.
In a four-page letter to Commissioner Daniel Werfel, Mayes said that it was treating Arizonans differently than residents of other states which had issued similar rebates. And she dismissed IRS arguments that what occurred here is legally distinguishable based on a belief those other programs were somehow connected to Covid relief programs.
“But the pandemic emergency declaration appears to have had no material bearing on the programs in California, Colorado, Idaho, and elsewhere,” Mayes told Werfel. “And while sound tax administration is always desirable, it is not a license to treat similarly situated states and taxpayers differently (or arbitrarily) based on unrelated national exigencies that happen to roughly coincide with a particular program.”
