§ 7-17 Penalties and Interest.
RCNY § 7-17
(a)Interest on underpayments. If any amount of tax is not paid on or before the last day prescribed for payment (without regard to any extension of time granted for payment), interest on such amount at the rate and for the periods prescribed by the law and the regulations of the Commissioner of Finance shall be paid. In computing the mount of interest to be paid with respect to taxes which remain or become due on or after July 16, 1985, such interest shall be compounded daily. No interest shall be paid if the amount thereof is less than one dollar.
(b)Civil penalties. Any person failing to file a return or to pay any tax due prior to February 24, 1983 within the time required by law shall be subject to a penalty of five percent of the amount due. If the Commissioner of Finance is satisfied that the delay was excusable he may remit all or any part or such penalty. With respect to returns or payments which become due on or after February 24, 1983, the following penalties apply: (1) Failure to file return.
(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) 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 (5%) of the amount of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) in the aggregate. In addition thereto, for tax years beginning on or after June 1, 1984, where a tenant fails to file a final return for taxable premises with respect to which the tenant is exempt from the tax by reason of 19 RCNY § 7-04(f)(2), there shall be imposed a penalty of $50 for each $1,000 of base rent, or fraction thereof, attributable to such taxable premises.
(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) the amount of the 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.
(2)Failure to pay tax shown on final return. In case of failure to pay the amount shown as tax on a final return to be filed 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 (see paragraph (5) of this subdivision) and not due to willful neglect, there shall be added to the amount shown as tax on such return one-half of one percent (1/2%) of the amount of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) 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 on 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 which is not so shown (including a determination made pursuant to 19 RCNY § 7-12), within ten (10) days of the date of the notice and demand, unless it is shown that such failure is due to reasonable cause (see paragraph (5) of this subdivision) 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 (1/2%) of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) 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.
(6)Underpayment due to negligence.
(7)Underpayment due to fraud.
(8)Any person who fails to pay tax, or to make, render, sign or certify any return, or to supply any information within the required time, with fraudulent intent, shall be liable for a penalty of not more than one thousand dollars ($1,000), in addition to any other amounts required under the law to be imposed, assessed and collected by the Commissioner of Finance. The Commissioner of Finance has the power, in his discretion, to waive, reduce or compromise any penalty under this paragraph.
(9)The additions to tax and penalties provided by this subdivision shall be paid and enforced in the same manner as taxes.
(10)Whenever a penalty is assessed for failure to pay the tax when due, an application for the remission thereof may be made to the Commissioner of Finance. Such application must be made by the person against whom the penalty is assessed, and must set forth the grounds upon which the remission is requested.
(11)Substantial understatement of liability. With respect to returns required to be filed on or after July 16, 1985, 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 (10%) 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 $5,000. 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.
(12)Aiding or assisting in the giving of fraudulent returns, reports, statements or other documents.
(iv)The penalty imposed by this paragraph shall be in addition to any other penalty provided by law.
(c)Criminal penalties.
(1)Failure to obey subpoena; false testimony.
(d)Commissioner's certificate. 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 the law shall be prima facie evidence thereof.
