2006 New York Code - Interest And Penalties.

 
    §  11-715  Interest  and  penalties.  * (a)  Interest on underpayment;
  quarterly return. If any amount of tax required to be paid together with
  a return, other than the final return for a tax year, is not paid on  or
  before  the  last  date  prescribed  for  payment (without regard to any
  extension of time granted for payment), interest on such amount  at  the
  rate  set  by the commissioner of finance pursuant to subdivision (h) of
  this section, or, if no rate is set, at the  rate  of  six  percent  per
  annum,  shall  be  paid  for the period from such last date until twenty
  days after the end of the tax year during which such payments  were  due
  or  until  such  prior  time  as  the  tax  paid for the tax year equals
  seventy-five percent of the full tax required to be  paid  for  the  tax
  year. Such interest shall be paid with the final return for the tax year
  to  which  it  relates.  In computing the amount of interest to be paid,
  such interest shall be compounded daily. Interest under this subdivision
  shall not be paid if the amount thereof is less than one dollar.
    * NB Amended Ch. 765/85 § 54, language juxtaposed per Ch. 907/85 § 14
    * (b) Interest on underpayment; final return. If  any  amount  of  tax
  required to be paid together with the final return for a tax year is not
  paid  on  or before the last date prescribed for payment (without regard
  to any extension of time granted for payment), interest on  such  amount
  at  the  rate set by the commissioner of finance pursuant to subdivision
  (h) of this section, or, if no rate is set, at the rate of  six  percent
  per  annum, shall be paid for the period from such last date to the date
  of payment. In computing  the  amount  of  interest  to  be  paid,  such
  interest  shall  be  compounded  daily.  Interest under this subdivision
  shall not be paid if the amount thereof is less than one dollar.
    * NB Amended Ch. 765/85 § 54, language juxtaposed per Ch. 907/85 § 14
    (c) * (1) Failure to file final return. (A) In case of failure to file
  a final return under this chapter  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,  and,  in
  addition  thereto, where a tenant, with respect to any taxable premises,
  is exempt from tax by reason  of  paragraph  two  of  subdivision  b  of
  section  11-704 of this chapter, there shall be imposed a penalty of one
  hundred dollars.
    (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 § 54, language juxtaposed per Ch. 907/85 § 14
    (2)  Failure  to  pay tax shown on final return. In case of failure to
  pay the amount shown as tax on a final return required to be filed under
  this chapter 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.
    (3) Failure to pay tax required to be shown on final return.  In  case
  of  failure to pay any amount in respect of any tax required to be shown
  on a final return required to be filed under this chapter which  is  not
  so  shown  (including a determination made pursuant to section 11-708 of
  this chapter) 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.
    * (4) Limitations on additions.
    (A) With respect to any final return, the amount of the addition under
  paragraph  one of this subdivision shall be reduced by the amount of the
  addition under paragraph two of this subdivision for any month to  which
  an  addition  applies  under  both  paragraphs  one and two. In any case
  described in subparagraph (B) of paragraph one of this subdivision,  the
  amount  of  the  addition  under such paragraph one shall not be reduced
  below the amount provided in such subparagraph.
    (B) With respect to any  final  return,  the  maximum  amount  of  the
  addition  permitted  under  paragraph three of this subdivision shall be
  reduced by the amount of  the  addition  under  paragraph  one  of  this
  subdivision  (determined  without  regard  to  subparagraph  (B) of such
  paragraph one) 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 § 54, language juxtaposed per Ch. 907/85 § 14
    * (d)   Underpayment  due  to  negligence.  (1)  If  any  part  of  an
  underpayment of tax is due to negligence  or  intentional  disregard  of
  this  chapter  or any rules or regulations hereunder (but without intent
  to defraud), there shall be added to the tax a  penalty  equal  to  five
  percent of the underpayment.
    (2)  There  shall  be  added  to  the  tax  (in addition to the amount
  determined under paragraph one of this subdivision) an amount  equal  to
  fifty  percent  of  the  interest  payable under subdivision (b) of this
  section with respect to the portion of  the  underpayment  described  in
  such   paragraph   one  which  is  attributable  to  the  negligence  or
  intentional disregard referred to in such paragraph one, for the  period
  beginning  on  the  last  date  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).


    * NB Amended Ch. 765/85 § 54, language juxtaposed per Ch. 907/85 § 14
    * (e) Underpayment due to fraud. (1) If any part of an underpayment of
  tax  is due to fraud, there shall be added to the tax a penalty equal to
  fifty percent of the underpayment.
    (2) There shall be added to  the  tax  (in  addition  to  the  penalty
  determined  under  paragraph one of this subdivision) an amount equal to
  fifty percent of the interest payable  under  subdivision  (b)  of  this
  section  with  respect  to  the portion of the underpayment described in
  such paragraph one which  is  attributable  to  fraud,  for  the  period
  beginning  on  the  last  date  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).
    (3) The penalty under this subdivision shall be in lieu of  any  other
  addition to tax imposed by subdivision (c) or (d) of this section.
    * NB Amended Ch. 765/85 § 54, language juxtaposed per Ch. 907/85 § 14
    (f)  Additional penalty. Any person who, with fraudulent intent, shall
  fail to pay any tax imposed by this chapter, or to make, render, sign or
  certify any return,  or  to  supply  any  information  within  the  time
  required  by or under this chapter, shall be liable for a penalty of not
  more than one  thousand  dollars,  in  addition  to  any  other  amounts
  required under this chapter 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.
    (g)  The  interest and penalties imposed by this section shall be paid
  and disposed of in the same manner as other revenues from this  chapter.
  Unpaid  interest and penalties may be enforced in the same manner as the
  tax imposed by this chapter.
    (h) (1) Authority to set interest rates. The commissioner  of  finance
  shall  set  the rate of interest to be paid pursuant to subdivisions (a)
  and (b) of this section, but if no such rate of interest  is  set,  such
  rate shall be deemed to be set at six percent per annum. Such rate shall
  be  the  same  for  each subdivision and shall be the rate prescribed in
  paragraph two of this subdivision but shall not be less than six percent
  per annum. Any such rate set by the commissioner of finance shall  apply
  to taxes, or any portion thereof, which remain or become due on or after
  the  date on which such rate becomes effective and shall apply only with
  respect to interest computed or computable for periods  or  portions  of
  periods occurring in the period in which such rate is in effect.
    (2)  General  rule.  The  rate  of interest set under this subdivision
  shall be the sum of (i) the federal short-term rate  as  provided  under
  paragraph three of this subdivision, plus (ii) five percentage points.
    (3) Federal short-term rate. For purposes of this subdivision:
    (A)  The  federal  short-term  rate for any month shall be the federal
  short-term rate  determined  by  the  United  States  secretary  of  the
  treasury  during such month in accordance with subsection (d) of section
  twelve hundred seventy-four of the internal  revenue  code  for  use  in
  connection  with  section  six  thousand  six  hundred twenty-one of the
  internal revenue code. Any such rate shall be  rounded  to  the  nearest
  full  percent  (or,  if a multiple of one-half of one percent, such rate
  shall be increased to the next highest full percent).
    (B) Period during which rate applies.
    (i)  In  general.  Except  as  provided  in  clause   (ii)   of   this
  subparagraph,  the  federal  short-term rate for the first month in each
  calendar quarter shall apply during the first calendar quarter beginning
  after such month. (ii) Special rule for the month of September, nineteen
  hundred eighty-nine. The federal short-term rate for the month of April,


  nineteen hundred eighty-nine shall apply with  respect  to  setting  the
  rate   of   interest  for  the  month  of  September,  nineteen  hundred
  eighty-nine.
    (4)  Publication  of  interest rate. The commissioner of finance shall
  cause to be published in the city record,  and  give  other  appropriate
  general notice of, the interest rate to be set under this subdivision no
  later  than  twenty days preceding the first day of the calendar quarter
  during which such interest rate applies. The setting and publication  of
  such  interest  rate  shall  not  be  included  within  paragraph (a) of
  subdivision five of section one thousand forty-one of the  city  charter
  relating to the definition of a rule.
    * (i)  Miscellaneous.  (1)  The  certificate  of  the  commissioner of
  finance to the effect that a tax has not been paid, that  a  return  has
  not  been  filed,  or that information has not been supplied pursuant to
  the provisions of this chapter shall be prima facie evidence thereof.
    (2) Cross-reference: For criminal penalties, see chapter forty of this
  title.
    * NB Amended Ch. 765/85 § 54, language juxtaposed per Ch. 907/85 § 14
    * (j)  Substantial  understatement  of  liability.  If  there   is   a
  substantial understatement of tax for any tax 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 tax
  year if the amount of the understatement for the tax  year  exceeds  the
  greater  of  ten  percent  of  the tax required to be shown on the final
  return for the tax 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 final return for  the  tax
  year,  over  the amount of the tax imposed which is shown on the return,
  reduced by any rebate.  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 Added Ch. 765/85 § 54, language juxtaposed per Ch. 907/85 § 14
    * (k) Aiding  or  assisting  in  the  giving  of  fraudulent  returns,
  reports,  statements  or  other  documents. (1) 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,  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,  statement  or  other  document
  shall pay a penalty not exceeding ten thousand dollars.
    (2)  For  purposes  of  paragraph  one  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.
    (3)  For  purposes  of  paragraph  one  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.
    (4) The penalty imposed by this subdivision shall be  in  addition  to
  any other penalty provided by law.
    * NB Added Ch. 765/85 § 54, language juxtaposed per Ch. 907/85 § 14