Late filing penalties abated where Taxpayers electronically filed income their income tax return through their accountant who confirmed to Taxpayers that the return was filed, but the electronic filing by the accountant was rejected by the IRS and the accountant did not then inform Taxpayers of the rejection.

Taxpayers were not entitled to an alternative fuel credit in later years for the purchase of a neighborhood electric vehicle purchased in Arizona in a year. Taxpayers were not Arizona residents and Taxpayers did not file an Arizona income tax return or claimed the credit in the year of purchase.

Penalties not abatement even though Taxpayers experienced unfortunate events where Taxpayers had developed a pattern of not filing and paying many years before they experienced the unfortunate events. Taxpayers did not show the unfortunate events caused their failure to file and pay.

Married taxpayer receiving community property income are jointly and severally liable for the income tax on the income.

Arizona domicile is not abandoned by a Taxpayer taking a job on a cruise ship with no evidence of an intention to abandon Arizona domicile or residence.

To take an alimony deduction for payments, the obligation to make payments must necessarily stop on death of the other ex-spouse. Allowance a deduction in prior tax year does not prevent the Department from assessing tax on payments made in a later tax year.

Taxpayers could not maintain a claim for refund for tax years closed by a closing agreement. The closing agreement took the form of two letters, an offer by the Department and the acceptance of the offer by the taxpayers.

Taxpayer’s payments were made pursuant to a written instrument incident to a divorce decree and were deductible.

Taxpayer showed that his business activities were undertaken with an intent to make a profit so his business loss was deductible.

Expenses incurred in the process of purchasing property are capital expenses that may not be deducted as either business expenses or as expenses incurred for the production or collection of income. Such expenses must be capitalized.