Section 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  seven
  and  one-half  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 two times the
  deficiency.
    (c) The addition to tax under this subdivision shall be in lieu of any
  other addition to tax imposed by subdivision one or two.
    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.
    15. False or fraudulent document penalty. Any taxpayer that submits  a
  false  or  fraudulent  document  to the department shall be subject to a
  penalty of one hundred dollars per document submitted, or  five  hundred
  dollars  per  tax return submitted. Such penalty shall be in addition to
  any other penalty or addition provided by law.