PHOENIX — Lawyers for the state are asking a federal appellate court to give them a chance to try to recover more than $20 million they say was taken illegally from about 750,000 Arizona taxpayers.
In legal briefs, members of the Attorney General’s Office contend U.S. District Court Judge Murray Snow erred when he upheld a decision by the Internal Revenue Service that $260 million given out in one-time rebates in 2023 is subject to federal taxes.
Murray did not dispute the IRS reached a contrary decision when it came to one-time payments to residents in 21 other states. But he said what Arizona did was factually different — including the fact the “rebates” in some cases actually exceeded the amount of state taxes that some residents paid…