§ 28-21 Interest and Penalties.
RCNY § 28-21
(a)Interest on underpayments. (Administrative Code § 11-524).
(1)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 prescribed by the law and the regulations of the Commissioner of Finance shall be paid for the period from such last date to the date of payment. No interest shall be paid if the amount thereof is less than one dollar.
(2)Exception as to estimated tax. This subdivision (a) shall not apply to any failure to pay estimated tax under § 11-512 of the Administrative Code.
(3)Exception for mathematical error. No interest shall be imposed on any underpayment of tax due solely to mathematical error if the taxpayer files a return within the time prescribed in 19 RCNY § 28-18 (including any extension of time) and pays the amount of underpayment within three months after the due date of such return, as it may be extended.
(4)Suspension of interest on deficiencies. If a waiver of restrictions on assessment of a deficiency has been filed by the taxpayer, and if notice and demand by the Commissioner of Finance for payment of such deficiency is not made within 30 days after the filing of such waiver, interest shall not be imposed on such deficiency for the period beginning immediately after such 30th day and ending with the date of notice and demand.
(5)Tax reduced by carryback. If the amount of tax for any taxable year is reduced by reason of a carryback of a net operating loss, such reduction in tax shall not affect the computation of interest under this subdivision (a) for the period ending with the filing date for the taxable year in which the net operating loss arises, determined without regard to extensions of time to file. Example: Partnership ABC has an unincorporated business tax deficiency of $1,000 for its taxable year ended December 31, 1983, due April 15, 1984. It sustains a loss for the year ended December 31, 1984, which when carried back to tax year 1983 reduces the deficiency for that year to $600. Interest accrues at the statutory rate (compounded) on $1,000 to April 15, 1985 (the filing date for the year of loss) and then on $600 to the date of payment.
(6)Interest on penalties or additions to tax. Interest shall be imposed under paragraph (1) of this subdivision (a) in respect to any assessable penalty or addition to tax only if such assessable penalty or addition to tax is not paid within ten days from the date of the notice and demand therefor under subdivision (b) of § 11-532 of the Administrative Code, and in such case interest shall be imposed only for the period from the date of the notice and demand to the date of payment.
(7)Payment prior to notice of deficiency. If, prior to the mailing to the taxpayer of a notice of deficiency under subdivision (b) of § 11-521 of the Administrative Code, the Commissioner of Finance mails to the taxpayer a notice of proposed increase of tax and within 30 days after the date of the notice of proposed increase the taxpayer pays all amounts shown on the notice to be due to the Commissioner of Finance, no interest under this subdivision (a) on the amount so paid shall be imposed for the period after the date of such notice of proposed increase.
(8)Payment within ninety days after notice of deficiency. If a notice of deficiency under § 11-521 of the Administrative Code is mailed to the taxpayer, and the total amount specified in such notice is paid on or before the 90th day after the date of mailing, interest under this subdivision (a) shall not be imposed for the period after the date of the notice.
(9)Payment within ten days after notice and demand. If notice and demand is made for payment of any amount under subdivision (b) of § 11-532 of the Administrative Code, and if such amount is paid within ten days after the date of such notice and demand, interest paid under this subdivision (a) on the amount so paid shall not be imposed for the period after the date of such notice and demand.
(10)Interest on erroneous refund. Any portion of tax or other amount which has been erroneously refunded, and which is recoverable by the Commissioner of Finance, shall bear interest at the rate set by the Commissioner of Finance from the date of the payment of the refund, but only if it appears that any part of the refund was induced by fraud or a misrepresentation of a material fact.
(11)Satisfaction by credits. If any portion of a tax is satisfied by credit of an overpayment, no interest shall be imposed under this subdivision (a) on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to such overpayment.
(b)Additions to tax and civil penalties. (Administrative Code § 11-525).
(i)In case of failure to file a return 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 (see: paragraph (5) of this subdivision (b)) and not due to willful neglect, there is to be added to the amount required to be shown as tax on such return five percent of the amount of such tax for each month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate.
(ii)With respect to returns required to be filed on or after July 16, 1985, in the case of a failure to file a tax return within 60 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 (i) of this paragraph shall not be less than the lesser of one hundred dollars ($100) or one hundred percent (100%) of the amount required to be shown as tax on such return.
(iii)For purposes of subparagraphs (i) and (ii) 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 on the return.
(iv)The penalty imposed by this paragraph (10) shall be in addition to any other penalty provided by law.
(c)Failure to file declaration or underpayment of estimated tax. (Administrative Code § 11-525(c)). If any taxpayer fails to file a declaration of estimated tax or fails to pay all or any part of an installment of estimated tax, he 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 rate set by the law and the regulations of the Commissioner of Finance upon the amount of the underpayment for the period of the underpayment but not beyond the 15th day of the fourth month following the close of the taxable year. The amount of the underpayment shall be the excess of the amount of the installment which would be required to be paid if the estimated tax were equal to 90 percent of the tax shown on the return for the taxable year (or if no return was filed, 90 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. No underpayment shall be deemed to exist with respect to a declaration or installment otherwise due on or after the taxpayer's death. In any case in which there would be no underpayment if this paragraph were applied by substituting "80 percent" for "90 percent" where it appears in the second preceding sentence, the addition to tax under this subdivision shall be equal to 75 percent of the amount otherwise determined under this section.
(d)Exception to addition for underpayment of estimated tax. (Administrative Code § 11-525(d)).
(e)Criminal penalties. (Administrative Code, Chapter 40 of Title 11).
(f)Commissioners Certificate. (Administrative Code § 11-531(d)). The certificate of the Commissioner of Finance to the effect that a tax has not been paid, that a return or declaration of estimated tax has not been filed, or that information has not been supplied, as required by or under the provisions of Chapter 5 of Title 11 of the Administrative Code, shall be prima facie evidence that such tax has not been paid, that such return or declaration has not been filed, or that such information has not been supplied.
