Arizona Revised Statutes Title 42. Taxation § 42-2201. Election for relief from joint and several liability; definition

A. Notwithstanding § 43-301, subsection C and § 43-562, after filing a joint income tax return pursuant to § 43-309, a taxpayer may seek relief from joint and several liability under the following circumstances:

B. If a taxpayer qualifies for relief under subsection A of this section, the relief extends to the amount of liability for tax, interest and penalties that is attributable to the understatement.

C. If a taxpayer would qualify for relief under subsection A of this section except that under subsection A, paragraph 2 the taxpayer establishes that in signing the return the taxpayer did not know, and had no reason to know, the extent of the understatement, the relief extends only to the extent the liability for tax, interest and penalties is attributable to the portion of the understatement of which the taxpayer did not know and had no reason to know.

D. The department shall make any determination under this section without regard to community property laws.

E. An election made by an individual under this section after the department has collected tax attributable to the erroneous items is considered to be a claim for refund pursuant to § 42-1118. The individual making an election after making the payment shall make the election within six months after making the payment or within the time limits prescribed by § 42-1106, whichever period expires later.

F. A taxpayer may appeal a determination under this section pursuant to § 42-1251 or 42-1253.

G. Except in the case of a jeopardy assessment under § 42-1111, the department shall not levy or proceed in court to collect any tax for taxable years from which the taxpayer is claiming relief under this section until all determinations are final. The period of limitations under § 42-1104 is suspended for the same period for which collection activities are suspended.

H. The department shall notify and allow the other joint filer to participate in any administrative proceeding under this section.

I. For the purposes of this section, “understatement” has the same meaning prescribed by section 6662(d)(2)(A) of the internal revenue code.  1