2006 New York Code - Additions To Tax And Civil Penalties.

 
    §  11-676  Additions  to  tax and civil penalties. 1. * (a) Failure to
  file return. (A) In case of failure to file a  return  under  the  named
  subchapters  on or before the prescribed date (determined with regard to
  any extension of time for filing), unless it is shown that such  failure
  is  due  to reasonable cause and not due to willful neglect, there shall
  be added to the amount required to be shown as tax on such  return  five
  percent  of  the  amount of such tax if the failure is for not more than
  one month, with an additional five percent for each additional month  or
  fraction  thereof  during  which  such  failure continues, not exceeding
  twenty-five percent in the aggregate.
    (B) In the case of a failure to file a return of tax within sixty days
  of the date prescribed for filing of such return (determined with regard
  to any extension of time for filing),  unless  it  is  shown  that  such
  failure  is  due to reasonable cause and not due to willful neglect, the
  addition to tax under subparagraph (A) of this paragraph  shall  not  be
  less  than  the  lesser of one hundred dollars or one hundred percent of
  the amount required to be shown as tax on such return.
    (C) For purposes of this paragraph, the amount of tax required  to  be
  shown  on  the  return shall be reduced by the amount of any part of the
  tax which is paid on or before the date prescribed for  payment  of  the
  tax and by the amount of any credit against the tax which may be claimed
  upon the return.
    * NB Amended Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14
    (b)  Failure to pay tax shown on return. In case of failure to pay the
  amounts shown as tax on any return required to be filed under the  named
  subchapters  on or before the prescribed date (determined with regard to
  any extension of time for payment), unless it is shown that such failure
  is due to reasonable cause and not due to willful neglect,  there  shall
  be  added  to  the  amount  shown  as tax on such return one-half of one
  percent of the amount of such tax if the failure is not  for  more  than
  one  month,  with  an  additional  one-half  of  one  percent  for  each
  additional  month  or  fraction  thereof  during  which   such   failure
  continues,  not  exceeding twenty-five percent in the aggregate. For the
  purpose of computing the addition for any month the amount of tax  shown
  on  the  return  shall  be  reduced by the amount of any part of the tax
  which is paid on or before the beginning of such month and by the amount
  of any credit against the tax which may be claimed upon the  return.  If
  the  amount  of  tax  required  to be shown on a return is less than the
  amount shown as tax on such return, this paragraph shall be  applied  by
  substituting such lower amount.
    (c)  Failure  to  pay  tax  required to be shown on return. In case of
  failure to pay any amount in respect of any tax required to be shown  on
  a  return  required to be filed under the named subchapters which is not
  so shown (including an assessment made pursuant to  subdivision  one  of
  section  11-673  of  this  subchapter)  within ten days of the date of a
  notice and demand therefor, unless it is shown that such failure is  due
  to reasonable cause and not due to willful neglect, there shall be added
  to  the  amount  of tax stated in such notice and demand one-half of one
  percent of such tax if the failure is not for more than one month,  with
  an  additional  one-half  of  one  percent  for each additional month or
  fraction thereof during which  such  failure  continues,  not  exceeding
  twenty-five  percent  in the aggregate. For the purpose of computing the
  addition for any month, the amount of  tax  stated  in  the  notice  and
  demand  shall  be  reduced by the amount of any part of the tax which is
  paid before the beginning of such month.
    * (d) Limitations on additions. (A) With respect to  any  return,  the
  amount  of the addition under paragraph (a) of this subdivision shall be
  reduced by the amount of  the  addition  under  paragraph  (b)  of  this


  subdivision  for  any  month  to  which  an  addition applies under both
  paragraphs (a) and (b). In any case described  in  subparagraph  (B)  of
  paragraph (a) of this subdivision, the amount of the addition under such
  paragraph  (a)  shall  not  be reduced below the amount provided in such
  subparagraph.
    (B) With respect to any return, the maximum  amount  of  the  addition
  permitted  under  paragraph  (c) of this subdivision shall be reduced by
  the amount of the addition  under  paragraph  (a)  of  this  subdivision
  (determined  without  regard  to subparagraph (B) of such paragraph (a))
  which is attributable to the tax for which the notice and demand is made
  and which is not paid within ten days of such notice and demand.
    * NB Amended Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14
    * 2. Deficiency due to negligence. (a) If any part of a deficiency  is
  due  to negligence or intentional disregard of this subchapter or any of
  the named subchapters or rules or regulations  thereunder  (but  without
  intent  to  defraud), there shall be added to the tax an amount equal to
  five percent of the deficiency.
    (b) There shall be added  to  the  tax  (in  addition  to  the  amount
  determined  under  paragraph (a) of this subdivision) an amount equal to
  fifty percent of the interest payable under subdivision one  of  section
  11-675  with  respect to the portion of the deficiency described in such
  paragraph (a) which is attributable to  the  negligence  or  intentional
  disregard referred to in such paragraph (a), for the period beginning on
  the  last  date  prescribed  by  law  for  payment  of  such  deficiency
  (determined without regard to any extension) and ending on the  date  of
  the  assessment  of  the tax (or, if earlier, the date of the payment of
  the tax).
    (c) If any payment is shown on a return made by a payor  with  respect
  to  dividends,  patronage dividends and interest under subsection (a) of
  section six thousand forty-two, subsection (a) of section  six  thousand
  forty-four  or  subsection (a) of section six thousand forty-nine of the
  internal revenue code of nineteen hundred fifty-four, respectively,  and
  the  payee fails to include any portion of such payment in gross income,
  as that term is defined in paragraph (a) of subdivision four of  section
  11-674,  any  portion  of  an  underpayment attributable to such failure
  shall be treated, for purposes of this subdivision, as due to negligence
  in the absence of clear and convincing evidence to the contrary. If  any
  addition  to  tax  is  imposed  under  this subdivision by reason of the
  preceding sentence, the  amount  of  the  addition  to  tax  imposed  by
  paragraph  (a)  of this subdivision shall be five percent of the portion
  of the underpayment which is attributable to the  failure  described  in
  the preceding sentence.
    * NB Amended Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14
    3.  Failure  to  file declaration or underpayment of estimated tax. If
  any taxpayer  fails  to  file  a  declaration  of  estimated  tax  under
  subchapter two or three of this chapter, or fails to pay all or any part
  of  an  amount which is applied as an installment against such estimated
  tax, it shall be deemed to have made an underpayment of  estimated  tax.
  There  shall  be  added to the tax for the taxable year an amount at the
  underpayment rate set by the commissioner of finance pursuant to section
  11-687 of this subchapter, or, if no rate is set, at  the  rate  of  six
  percent  per annum upon the amount of the underpayment for the period of
  the underpayment but not beyond the fifteenth day  of  the  third  month
  following  the close of the taxable year. The amount of the underpayment
  shall be, with respect to any installment of estimated tax  computed  on
  the basis of the preceding year's tax, the excess of the amount required
  to  be  paid  over  the  amount,  if any, paid on or before the last day
  prescribed for such payment or, with respect to any other installment of


  estimated tax, the excess of the amount of the installment  which  would
  be required to be paid if the estimated tax were equal to ninety percent
  of the tax shown on the return for the taxable year (or if no return was
  filed, ninety percent of the tax for such year) over the amount, if any,
  of  the  installment  paid on or before the last day prescribed for such
  payment. In any case in which there would be no underpayment if  "eighty
  percent"  were substituted for "ninety percent" each place it appears in
  this subdivision, the addition to the tax shall be equal to seventy-five
  percent of the amount otherwise determined.  No  underpayment  shall  be
  deemed  to  exist with respect to a declaration or installment otherwise
  due on or after the termination of existence of the taxpayer.
    4. Exception to  addition  for  underpayment  of  estimated  tax.  The
  addition to tax under subdivision three with respect to any underpayment
  of  any  amount which is applied as an installment against estimated tax
  under subchapter two or three of this chapter shall not  be  imposed  if
  the  total amount of all payments of estimated tax made on or before the
  last date prescribed for the  payment  of  any  such  amount  equals  or
  exceeds  the  amount  which  would  have  been required to be paid on or
  before such date if the estimated tax were whichever of the following is
  the least:
    (a) The tax shown on the return of  the  taxpayer  for  the  preceding
  taxable  year,  if a return showing a liability for tax was filed by the
  taxpayer for the preceding taxable year and such preceding  year  was  a
  taxable year of twelve months, or
    (b) An amount equal to the tax computed at the rates applicable to the
  taxable  year,  but  otherwise  on  the  basis of the facts shown on the
  return of the taxpayer for, and the law  applicable  to,  the  preceding
  taxable year, or
    (c)  (i)  An  amount  equal  to  ninety  per centum of the tax for the
  taxable year computed by placing on  an  annualized  basis  the  taxable
  income:
    (1) for the first three months or the first five months of the taxable
  year,  in  the  case of the installment required to be paid in the sixth
  month,
    (2) for the first six months or the first eight months of the  taxable
  year,  in  the  case of the installment required to be paid in the ninth
  month, and
    (3) for the first nine months  or  the  first  eleven  months  of  the
  taxable  year, in the case of the installment required to be paid in the
  twelfth month.
    (ii) For purposes of subparagraph (i)  the  taxable  income  shall  be
  placed on an annualized basis by:
    (1)  multiplying  it  by  twelve (or, in the case of a taxable year of
  less than twelve months, the number of months in the taxable year) and
    (2) dividing the resulting amount by  the  number  of  months  in  the
  taxable  year  (three, five, six, eight, nine or eleven, as the case may
  be) referred to in subparagraph (i), or
    (d) (i) If the base period percentage for any six  consecutive  months
  of  the  taxable year equals or exceeds seventy percent, an amount equal
  to ninety percent of the tax determined in the following manner:
    (A) take the taxable income for all months  during  the  taxable  year
  preceding the filing month,
    (B)  divide  such  amount by the base period percentage for all months
  during the taxable year preceding the filing month,
    (C) determine the tax on the amount determined under clause (B), and
    (D) multiply the tax determined under clause (C) by  the  base  period
  percentage  for  the filing month and all months during the taxable year
  preceding the filing month.


    (ii) For purposes of subparagraph (i):
    (A)  the  base period percentage for any period of months shall be the
  average percent which the taxable income for the corresponding months in
  each of the three preceding taxable years bears to  the  taxable  income
  for  the  three preceding taxable years. The commissioner of finance may
  by  regulations  provide  for  the  determination  of  the  base  period
  percentage  in  the case of reorganizations, new corporations, and other
  similar circumstances, and
    (B) the term "filing month" means the month in which  the  installment
  is required to be paid.
    5.  (a) Except as provided in paragraph (b) hereof, paragraphs (a) and
  (b) of subdivision four of this section shall not apply in the  case  of
  any  corporation  (or  any predecessor corporation) which had entire net
  income, or the portion thereof allocated within the city, of one million
  dollars or more for any taxable year  during  the  three  taxable  years
  immediately preceding the taxable year involved.
    (b)  The  amount treated as the estimated tax under paragraphs (a) and
  (b) of subdivision four of this section shall in no event be  less  than
  seventy-five percent of the tax shown on the return for the taxable year
  beginning  in  nineteen hundred eighty-three or, if no return was filed,
  seventy-five percent of the tax for such year.
    * 6. Deficiency due to fraud. (a) If any part of a deficiency  is  due
  to  fraud,  there  shall  be  added  to the tax an amount equal to fifty
  percent of the deficiency.
    (b) There shall be added  to  the  tax  (in  addition  to  the  amount
  determined  under  paragraph (a) of this subdivision) an amount equal to
  fifty percent of the interest payable under subdivision one  of  section
  11-675 with respect to the portion of the underpayment described in such
  paragraph  (a)  which is attributable to fraud, for the period beginning
  on the last day prescribed by  law  for  payment  of  such  underpayment
  (determined  without  regard to any extension) and ending on the date of
  the assessment of the tax (or, if earlier, the date of  the  payment  of
  the tax).
    (c) The addition to tax under this subdivision shall be in lieu of any
  other addition to tax imposed by subdivision one or two.
    * NB Amended Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14
    7.  Additional  penalty.  Any  person who with fraudulent intent shall
  fail to pay under the named subchapters any tax,  or  to  make,  render,
  sign or certify any return or declaration of estimated tax, or to supply
  any  information  within  the time required by or under any of the named
  subchapters, shall be liable to penalty of not more  than  one  thousand
  dollars, in addition to any other amounts required under this subchapter
  to  be  imposed,  assessed and collected by the commissioner of finance.
  The commissioner of  finance  shall  have  the  power,  in  his  or  her
  discretion,  to  waive,  reduce  or  compromise  any  penalty under this
  subdivision.
    * 8. Additions treated as tax. The  additions  to  tax  and  penalties
  provided  by this section shall be paid upon notice and demand and shall
  be assessed, collected and paid in the same manner  as  taxes,  and  any
  reference  in  this  subchapter  to  tax  imposed  by  any  of the named
  subchapters shall be deemed also to refer to the additions  to  tax  and
  penalties  provided  by  this section. For purposes of section 11-672 of
  this subchapter, this subdivision shall not apply to:
    (a) any addition to tax  under  subdivision  one  except  as  to  that
  portion attributable to a deficiency;
    (b) any addition to tax under subdivision three or fourteen; and
    (c) any additional penalties under subdivisions seven and twelve.
    * NB Amended Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14


    9.  Determination  of deficiency. For purposes of subdivisions two and
  six the amount shown as the tax by the taxpayer upon its return shall be
  taken into account in determining the amount of the deficiency  only  if
  such  return  was  filed  on  or  before the last day prescribed for the
  filing  of  such return, determined with regard to any extension of time
  for such filing.
    * 10. Person defined. For purposes of subdivisions seven  and  twelve,
  the  term "person" includes an individual, corporation or partnership or
  an officer  or  employee  of  any  corporation  (including  a  dissolved
  corporation),  or  a  member or employee of any partnership, who as such
  officer, employee, or member is under a  duty  to  perform  the  act  in
  respect of which the violation occurs.
    * NB Amended Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14
    * 11.   Substantial   understatement  of  liability.  If  there  is  a
  substantial understatement of tax for any taxable year, there  shall  be
  added  to  the  tax  an amount equal to ten percent of the amount of any
  underpayment attributable to such understatement. For purposes  of  this
  subdivision,  there  is  a  substantial  understatement  of  tax for any
  taxable year if the amount of the understatement for  the  taxable  year
  exceeds  the  greater  of ten percent of the tax required to be shown on
  the return for the taxable year or five thousand dollars.  For  purposes
  of the preceding sentence, the term "understatement" means the excess of
  the amount of the tax required to be shown on the return for the taxable
  year,  over  the amount of the tax imposed which is shown on the return,
  reduced by any rebate  (within  the  meaning  of  subdivision  eight  of
  section  11-672).  The amount of such understatement shall be reduced by
  that portion of the understatement which  is  attributable  to  the  tax
  treatment  of  any  item  by the taxpayer if there is or was substantial
  authority for such treatment, or any item  with  respect  to  which  the
  relevant  facts  affecting  the  item's  tax  treatment  are  adequately
  disclosed in the return or in a statement attached to  the  return.  The
  commissioner of finance may waive all or any part of the addition to tax
  provided by this subdivision on a showing by the taxpayer that there was
  reasonable  cause  for the understatement (or part thereof) and that the
  taxpayer acted in good faith.
    * NB Amended Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14
    * 12. Aiding  or  assisting  in  the  giving  of  fraudulent  returns,
  reports,  statements  or  other  documents. (a) Any person who, with the
  intent that tax be evaded, shall, for a fee or other compensation or  as
  an  incident  to the performance of other services for which such person
  receives compensation, aid or assist in, or procure, counsel, or  advise
  the  preparation or presentation under, or in connection with any matter
  arising under this chapter of any return, report, declaration, statement
  or other document which is  fraudulent  or  false  as  to  any  material
  matter,  or  supply  any false or fraudulent information, whether or not
  such falsity or fraud is with the knowledge or  consent  of  the  person
  authorized  or  required  to  present  such return, report, declaration,
  statement or other document  shall  pay  a  penalty  not  exceeding  ten
  thousand dollars.
    (b)  For  purposes  of  paragraph  (a)  of  this subdivision, the term
  "procures" includes ordering (or otherwise causing) a subordinate to  do
  an  act, and knowing of, and not attempting to prevent, participation by
  a subordinate in an act. The term "subordinate" means any  other  person
  (whether  or not a director, officer, employee, or agent of the taxpayer
  involved) over whose activities the person has  direction,  supervision,
  or control.
    (c)  For  purposes  of  paragraph  (a)  of  this subdivision, a person
  furnishing typing, reproducing,  or  other  mechanical  assistance  with


  respect  to  a document shall not be treated as having aided or assisted
  in the preparation of such document by reason of such assistance.
    (d)  The  penalty  imposed by this subdivision shall be in addition to
  any other penalty provided by law.
    * NB Added Ch. 765/85 § 62, language juxtaposed per Ch. 907/85 § 14
    13. Failure to file report of information relating to certain interest
  payments. In case of failure to file the report of information  required
  under  subdivision two-a of section 11-605 of this chapter, unless it is
  shown that such failure is due  to  reasonable  cause  and  not  due  to
  willful  neglect,  there  shall  be  added  to the tax a penalty of five
  hundred dollars.
    14. Failure to include on  return  information  relating  to  issuer's
  allocation  percentage. Where a return is filed but does not contain (1)
  the information necessary to compute the taxpayer's issuer's  allocation
  percentage,   as  defined  in  subparagraph  one  of  paragraph  (b)  of
  subdivision three of section 11-604 of this chapter, where the  same  is
  called  for  on  the  return, or, (2) the taxpayer's issuer's allocation
  percentage, where the same is called for on the return but where all  of
  the  information necessary for the computation of such percentage is not
  called for on the return, then unless it is shown that such  failure  is
  due  to  reasonable  cause and not due to willful neglect there shall be
  added to the tax a penalty of five hundred dollars.