42.3.106 HARDSHIP AS "REASONABLE CAUSE"
(1) Unless otherwise specified by statute or these rules, hardship means economic hardship as defined in ARM 42.2.304.
(2) Examples of economic hardship that may constitute reasonable cause for waiver of penalties and/or interest include:
(a) inability to pay the tax because of an act of God, natural disaster, or emergency as declared by the governor or president;
(b) inability to pay the tax because property and assets were seized by a foreign government;
(c) inability to pay because of seizure of property and assets by a court of law when the court action was not due to acts by the taxpayer;
(d) inability to pay because the taxpayer's assets are temporarily impounded or frozen because of a bank failure;
(e) catastrophic medical expenses.
(3) The examples given in (2) are illustrations only. Other circumstances may exist which constitute economic hardship sufficient to waive penalty and/or interest.
(4) Examples of economic hardship that do not constitute reasonable cause for waiver of penalty and/or interest include:
(a) inability to pay because of a divorce settlement or maintenance action;
(b) inability to pay because of fire or other loss which the taxpayer could have insured against; or
(c) lack of funds because of insufficient planning or foresight.
(5) The examples given in (4) are for illustration only. Other circumstances may exist that do not constitute economic hardship sufficient to waive penalty or interest.
(6) Economic hardship will be considered as reasonable cause for waiver of penalties and/or interest on the penalty only when the taxpayer has tendered full payment of the tax and interest on the tax.
(7) If the taxpayer pays the tax on a time-payment-plan, the decision on whether or not the penalty and/or interest on the penalty will be waived will not be made until after the taxpayer has completed full payment of the tax and accrued interest on the tax.
History: 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA; IMP, 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA; NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.