Arizona Composite Returns

[dnapientek]

We filed an amended composite return for a client and they associated the payment made to the Partnership return.  We have filed individual tax returns for several partners to receive the refund since the composite taxes are taxed at a higher rater.  The partners have been receiving notices for taxes owed to AZ because the composite taxes paid have not been allocated to the partners based off ownership percentages.

After months of phone calls, the only answers we have received are to provide a copy of the W-2 showing AZ withholding.  There is no W-2, it is only a K-1.  That has been submitted and rejected by AZ Department of Revenue.  Does anybody have experience with Composite Returns in AZ and what needs to be done?

[sjrcpa]

I thought composite returns are filed in lieu of individual nonresident returns.