The Waterbury Democrat., 1944-04-14

Taxpayers will find 1t to their interest to be prompt and reason- ably accurate in the declaratoin and payment of estimated income taxes, for three types of penalties are im- posed by the Revenue Act of 1943 with respect to estimated taxes. These enpalties are amounts that are required to be added to the tax in case of CD failure to file on time a declaration of estimated tax; CD failure to pay on time any lnstall- ment of estimated tax; and (3) substantial underestimation of tax
 The penalty for failing to file a equal to per cent of each install ment or portion thereof that is due but unpaid, plus per cent per month or fraction therefore (after the first month) up to a maximum for each installment of 10 per cent of the amount due ad unpaid. In computing the penalty for the un- excused failure to file a declaration on time the amount of each 1n- stallmsent is considered to be a pro rata portion of the correct tax.
 A like penalty of per cent plus i per cent permonth or fraction thereof (after the first month) IS added If a declaration has been filed but one or more of the 1n- stallments is not paid when due. Tn this case the penalty is computed on pro rata portion of the esti- mate tax as shown by the declara' tion up to maximum for each in stallment of 10 per cent of the amount due but unpaid.
 These two penalties are separate and distinct and if one is applicable the other is not. Neither of these additions to the tax will be i'm posed if the taxpayer can show tc the satisfaction of the Bureau o1 Internal Revenue that he delay was due to a reasonable cause and moi to willful neglect. The first install. ment is considered as due on the due date for filing the declaration and the remaining inStallments are regarded as due respectively on the fifteenth day of the last month o1 each succeeding quarter of the tax able year. A taxpayer who is delinquent ir filing his declaration or in making payment will be afforded an op- portunity to make an affirmative showing of all facts relied on as reasonable cause for the failure to file the declaration or pay the tax on time. Alleged ignorance of the law is not accepted as a reasonable cause for delinquency.
 If an extension of time for filing declaration is desired, the request for the extension should be sub- mitted to the Collector of Internal Revenue in ample time so that If for any reason, the extension is not granted, the declaration can still be filed on time.
 If, after the income tax return for the year has been filed, 1t is dis covred that taxpayer under esti- mated his tax by more than 20 pei cent Cor 8 Ia per cent in the cast of farmers), a penalty may be im- posed. This penalty for underesti. mating will not be due, however if the taxpayer can show that the estimate is computed on last years income at this years rates and ex' emptions, and is paid on time 1T equal quarterly installments or ii paid ahead of time Cor, in the cast of farmars, is paid in full on ol before the 18th day of the las' month of the taxable year).
 The penalty imposed will b' equal to six per cent of the entire shortage ilH the estimate, but not more than the amount by which the estimate falls short of 30 pel cent of teh tax Cor, in the case oi