2006 New York Code - Interest And Penalties.

 
    §  11-1114 Interest and penalties. * (a) Interest on underpayments. If
  any amount of tax 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 (g) 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 § 60, language juxtaposed per Ch. 907/85 § 14
    (b) * (1) Failure to file return. (A) In case of  failure  to  file  a
  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.
    (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 § 60, language juxtaposed per Ch. 907/85 § 14
    (2)  Failure to pay tax shown on return. In case of failure to pay the
  amount shown as tax on a 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  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 this chapter which is not  so  shown
  (including  a  determination  made  pursuant  to section 11-1106 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  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 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 § 60, language juxtaposed per Ch. 907/85 § 14
    * (c)   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 (a) 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).
    (3) 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
  or gross operating income, when required under this  chapter  to  be  so
  included,  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
  penalty  is  imposed  under  this subdivision by reason of the preceding
  sentence, the amount of the penalty imposed by  paragraph  one  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 § 60, language juxtaposed per Ch. 907/85 § 14
    * (d) 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  (a)  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  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).
    (3) The penalty under this subdivision shall be in lieu of  any  other
  addition to tax imposed by subdivision (b) or (c) of this section.
    * NB Amended Ch. 765/85 § 60, language juxtaposed per Ch. 907/85 § 14
    (e)  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.
    (f)  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.
    (g) (1) Authority to set interest rates. The commissioner  of  finance
  shall set the rate of interest to be paid pursuant to subdivision (a) 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 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.
    * (h)  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 § 60, language juxtaposed per Ch. 907/85 § 14
    * (i)  Substantial  understatement  of  liability.  If  there   is   a
  substantial understatement of tax for any taxable period, 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 period if the amount  of  the  understatement  for  the  taxable
  period  exceeds  the  greater  of  ten percent of the tax required to be
  shown on the return for the taxable period 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 period, 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 § 60, language juxtaposed per Ch. 907/85 § 14
    * (j)  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  title  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 § 60, language juxtaposed per Ch. 907/85 § 14
    (k)  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 title, 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.