NY Tax L § 1085 (2021)
2021 New York Laws TAX - Tax Article 27 - Corporate Tax Procedure and Administration 1085 - Additions to Tax and Civil Penalties.

§  1085.  Additions  to  tax and civil penalties.---(a) (1) Failure to file return.---(A) In case of failure to file  a  return  under  article nine,  nine-a,  nine-b  or  nine-c  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.  (2) 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  article nine,  nine-a,  nine-b  or  nine-c  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 per cent of the amount of such tax if the failure is  not  for more than one month, with an additional one-half of one per cent for each additional month or fraction  thereof  during  which  such failure  continues, not exceeding twenty-five per cent 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 article nine or nine-a which is  not so  shown  (including  an  assessment made pursuant to subsection (a) of section one thousand  eighty-two  of  this  article)  within  twenty-one calendar  days of the date of a notice and demand therefor (ten business days if the amount for which such notice and demand is  made  equals  or exceeds  one  hundred  thousand  dollars),  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 subsection shall be reduced by the amount  of  the addition  under  paragraph two of this subsection 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 subsection, 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 subsection shall be  reduced  by the  amount  of  the  addition  under  paragraph  one of this subsection (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.  (b) Deficiency due to negligence.---(1) If any part of a deficiency is due  to  negligence  or intentional disregard of this article or article nine, nine-a, nine-b or nine-c, 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.  (2) There shall be added  to  the  tax  (in  addition  to  the  amount determined  under  paragraph  one of this subsection) an amount equal to fifty percent  of  the  interest  payable  under  section  one  thousand eighty-four 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, as that term is defined in paragraph one of subsection  (d)  of  section one  thousand  eighty-three, any portion of an underpayment attributable to such failure shall be treated, for purposes of  this  subsection,  as due to negligence in the absence of clear and convincing evidence to the contrary.  If  any penalty is imposed under this subsection by reason of the preceding sentence, the amount of the penalty imposed  by  paragraph one  of  this  subsection  shall  be  five percent of the portion of the underpayment which is attributable  to  the  failure  described  in  the preceding sentence.  (c)  Failure  to  file declaration or underpayment of estimated tax.-- (1) If any taxpayer fails to file a declaration of estimated  tax  under article  nine-A  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  pursuant  to  section  one thousand  ninety-six  of this article, 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 fourth month following the  close  of  the  taxable year.  Provided,  however, that, for taxable years beginning on or after January first, two thousand seventeen  and  before  January  first,  two thousand  eighteen,  no amount shall be added to the tax with respect to the portion of such tax related to the amount of any interest deductions  directly or indirectly attributable to the amount included in exempt CFC income pursuant to subparagraph (ii) of  paragraph  (b)  of  subdivision six-a  of section two hundred eight of this chapter or the forty percent reduction  of  such exempt CFC income in lieu of interest attribution if the election described in paragraph (b) of  subdivision  six-a  of  such section  is  made. The amount of the underpayment shall be, with respect to any installment of estimated tax computed on the basis of either  the preceding  year's  tax or the second 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-one  percent  of  the  tax shown on the return for the taxable year (or if no return was filed, ninety-one 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-one percent" each place  it  appears  in  this  subsection,  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.  (2)  For  purposes of applying the addition to tax for an underpayment of any installment of  estimated  tax  by  a  taxpayer  subject  to  tax pursuant  to  article  thirty-three  of  this chapter, the amount of tax shall be determined by using the lesser  of  the  differential  earnings rate  (as  described  in subsection (c) of section eight hundred nine of the internal revenue code) of the second tax year preceding the  taxable year  for  which  the  installment is made, or the differential earnings rate for the taxable year  for  which  the  installment  is  made.  Such addition  to  tax shall be applied to any taxable year without regard to any adjustments to the differential earnings amount under subsection (f) of section eight hundred nine of the  internal  revenue  code  for  such year.  (3)  The  provisions of this subsection and subsections (d) and (e) of this section shall apply  to  the  failure  of  a  taxpayer  to  file  a declaration  of estimated tax surcharge or the failure to pay all or any part of an amount which  is  applied  as  an  installment  against  such estimated tax surcharge pursuant to sections one hundred ninety-seven-a, one   hundred   ninety-seven-b,  two  hundred  thirteen-a,  two  hundred thirteen-b, fifteen hundred thirteen and  fifteen  hundred  fourteen  of this  chapter. For purposes of applying this section and subsections (d) and  (e)  of  this  section  to  the  estimated  tax  surcharge,   where appropriate  the  term  "tax" shall be read to mean "tax surcharge," and the terms "amount required to be paid," "amount which would be  required to  be  paid,"  and  "amount  which would have been required to be paid" shall be computed as the product of (1)  such  amount  computed  without regard  to  the  tax  surcharges  imposed  under  sections  one  hundred eighty-four-a, one hundred eighty-six-c, one hundred  eighty-eight,  two hundred  nine-A, two hundred nine-B, fifteen hundred five-a, and fifteen hundred twenty of this chapter, and (2) the  MTA  percentage.  The  term "MTA  percentage"  shall mean the product of (A) the tax rate applicable under such sections imposing such  surcharges  and  (B)  the  percentage utilized  in determining the portion of the taxpayer's business activity carried on within  the  metropolitan  commuter  transportation  district under such sections.  (d)  Exception  to  addition  for  underpayment of estimated tax.--The addition to tax under subsection (c) with respect to any underpayment of  any amount which is applied as  an  installment  against  estimated  tax under article nine-a, nine-b or nine-c 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--  (1)  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  (2) 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  (3) Annualized income installment. (A) General.   An amount  equal  to ninety-one percent of the tax for the taxable year computed on all items entering  into  the  computation of the tax or taxes of the taxpayer for the taxable year under article nine,  nine-A  or  thirty-three  of  this chapter.  For  purposes  of  computing  the  tax, all items of receipts, income and expenses shall be placed on an annualized basis--  (i) for the first three months of the taxable year, in the case of the installment required to be paid in the sixth month,  (ii) for the first six months of the taxable year, in the case of  the installment required to be paid in the ninth month, and  (iii)  for  the  first nine months of the taxable year, in the case of the installment required to be paid in the twelfth month.  (B)  Special  rules.  For  purposes  of  subparagraph  (A),  items  of receipts,  income  and  expenses  shall be placed on an annualized basis by--  (i) multiplying such items by twelve (or, in the  case  of  a  taxable year  of  less  than  twelve months, the number of months in the taxable year), and  (ii) dividing the resulting amounts by the number of  months  referred to  in  subparagraph (A) (or in subparagraph (C), if an election applies to the taxable year under such subparagraph).  (C) Election for different annualization periods. (i) If the  taxpayer makes an election under this clause--  (I)  Clause (i) of subparagraph (A) of this paragraph shall be applied by substituting "four months" for "three months",  (II) Clause (ii) of  subparagraph  (A)  of  this  paragraph  shall  be applied by substituting "seven months" for "six months",  (III)  Clause  (iii)  of  subparagraph  (A) of this paragraph shall be applied by substituting "ten months" for "nine months".  (ii) If the taxpayer makes an election under this clause--  (I) Clause (i) of subparagraph (A) of this paragraph shall be  applied by substituting "five months" for "three months",  (II)  Clause  (ii)  of  subparagraph  (A)  of  this paragraph shall be applied by substituting "eight months" for "six months",  (III) Clause (iii) of subparagraph (A)  of  this  paragraph  shall  be applied by substituting "eleven months" for "nine months".  (iii)  An election under clause (i) or (ii) of this subparagraph shall apply to the taxable year for which made and such an election  shall  be effective  only  if  made  on or before the date required for filing the declaration of estimated tax for such taxable year, or  (4) (A) If the base period percentage for any six  consecutive  months of  the  taxable year equals or exceeds seventy percent, an amount equal to ninety-one percent of the tax determined in the following manner--  (i) take the items entering into the computation of the tax  or  taxes of  the  taxpayer  for  the  taxable  year under article nine, nine-A or thirty-three of this chapter, for all months  during  the  taxable  year preceding the filing month,  (ii)  divide such amounts by the base period percentage for all months during the taxable year preceding the filing month,  (iii) determine the tax on the amounts determined under  clause  (ii), and  (iv) multiply the tax determined under clause (iii) by the base period percentage  for  the filing month and all months during the taxable year preceding the filing month.  (B) For purposes of subparagraph (A)--  (i) 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  tax  commission  may  by regulations  provide for the determination of the base period percentage in the case of reorganizations,  new  corporations,  and  other  similar circumstances, and  (ii)  the term "filing month" means the month in which the installment is required to be paid.  (5) In the case of any declaration installment, any reduction in  such installment resulting from the application of paragraph three or four of this subsection shall be recaptured by increasing the amount of the next installment  determined under paragraph one or two of this subsection or paragraph one of subsection (c) of this section by the  amount  of  such reduction  (and by increasing subsequent installments to the extent that the reduction has not previously been recaptured under this  paragraph). For  purposes of the preceding sentence, a declaration installment means any  installment  of  estimated  tax  other  than  the  mandatory  first installment  required  under paragraph (a) of subdivision one of section one hundred ninety-seven-b,  subdivision  (a)  of  section  two  hundred thirteen-b  or  subdivision  (a)  of section fifteen hundred fourteen of this chapter.   For  the  purposes  of  this  subsection  the  amounts  specified   in paragraphs  (2),  (3)  and  (4)  shall be computed without regard to any increase in the rates applicable to the  taxable  year  which  may  have become effective after the first day of the seventh month of such year.  (e) (1) Paragraphs (1) and (2) of subsection (d) of this section shall not   apply   in  the  case  of  any  corporation  (or  any  predecessor corporation) which had business income, or the portion thereof allocated within the state, of one million dollars or more for  any  taxable  year during  the  three  taxable years immediately preceding the taxable year involved; provided, however, that in the case of a  corporation  subject to  tax  under section fifteen hundred two-a of this chapter, paragraphs (1) and (2) of subsection (d) of this section shall not  apply  if  such corporation  had  entire  net  income,  or the portion thereof allocated within the state, of one million dollars or more for any  of  the  three taxable years immediately preceding the taxable year involved, or if the direct  premiums  subject  to tax under section fifteen hundred two-a of this chapter of the corporation for any of such three preceding  taxable years  beginning on or after January first, two thousand three equals or exceeds three million seven hundred fifty thousand dollars.  (2) In the case of  taxpayers  described  in  paragraph  one  of  this subsection,  paragraph  one  of  subsection  (c),  subparagraph  (A)  of paragraph three of subsection (d), and  subparagraph  (A)  of  paragraph four  of subsection (d) of this section shall be applied by substituting "one hundred percent" for "ninety-one percent" each place it appears.  (f) Deficiency due to fraud.---(1) 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.  (2)  The addition to tax under this subsection shall be in lieu of any other addition to tax imposed by subsection (a) or (b).  (g) Additional penalty.---Any person who with fraudulent intent  shall fail to pay under article nine, nine-a, nine-b or nine-c, 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 such  article,  shall be liable to penalty of not more than one thousand dollars, in addition to any other amounts required under  this  article, to  be  imposed,  assessed  and collected by the tax commission. The tax commission shall have the power, in its discretion, to waive, reduce  or compromise any penalty under this subsection.  (h)  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 article to tax imposed by article nine, nine-a, nine-b or nine-c shall be deemed also to refer to  the  additions  to  tax  and penalties provided by this section. For purposes of section one thousand eighty-one, this subsection shall not apply to---  (1) any addition to tax under subsection (a) except as to that portion attributable to a deficiency;  (2) any addition to tax under subsection (c) or (o); and  (3) any additional penalties under subsections (g) and (l).  (i) Determination of deficiency.---For purposes of subsections (b) and (f),  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.  (j)  Person  defined.---For  purposes  of subsections (g) and (l), the term person includes an individual, corporation, partnership or  limited liability   company  or  an  officer  or  employee  of  any  corporation (including a dissolved corporation), or a  member  or  employee  of  any partnership,  or  a  member,  employee or manager of a limited liability company, who as such officer, employee, manager or  member  is  under  a duty to perform the act in respect of which the violation occurs.   * (k)  Substantial  understatement  of  liability.-- (1) 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 subsection, 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 subsection (h)  of  section one thousand eighty-one of this article). The excess under the preceding sentence shall be determined without regard to items to which subsection (k-1)  of  this  section  applies. The commissioner may waive all or any part of the addition to tax provided by this section 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.  (2) The amount of the  understatement  under  paragraph  one  of  this subsection  shall be reduced by that portion of the understatement which  is attributable to (A) the tax treatment of any item by the taxpayer  if there  is  or  was  substantial authority for such treatment, or (B) any item if the relevant  facts  affecting  the  item's  tax  treatment  are adequately  disclosed  in  the  return or in a statement attached to the return.  (3)(A) Subparagraph (B) of paragraph two of this subsection shall  not apply to any item attributable to a tax shelter.  (B) For purposes of this paragraph, the term "tax shelter" means  (i) a partnership or other entity,  (ii) any investment plan or arrangement, or  (iii) any other plan or arrangement, if   a  significant  purpose  of  such  partnership,  entity,  plan,  or arrangement is the avoidance or evasion of tax.   * NB Effective until July 1, 2024   * (k)  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 subsection, 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 subsection (h) of section one thousand eighty-one). 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 tax commission may waive all or any part of the addition  to tax provided by this section 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 Effective July 1, 2024   * (k-1) Reportable transaction understatement.-- (1) If a taxpayer has a reportable transaction understatement  for  any  taxable  year,  there shall  be  added  to  the  tax  an amount equal to twenty percent of the amount of such understatement.  (2) For purposes of this section,  the  term  "reportable  transaction understatement" means the sum of  (A) the product of--  (i)  the  amount  of  the increase (if any) in the applicable tax base which results from a difference between the proper tax treatment  of  an item  to which this section applies and the taxpayer's treatment of such item (as shown on the taxpayer's return of tax), and  (ii) the highest rate of tax imposed under the article of this chapter that applies to the taxpayer, and  (B) the amount of the decrease (if any) in  the  aggregate  amount  of credits determined under the article of this chapter that applies to the taxpayer   which  results  from  a  difference  between  the  taxpayer's treatment of an item to which this section  applies  (as  shown  on  the taxpayer's return of tax) and the proper tax treatment of such item.   For  purposes  of subparagraph (A) of this paragraph, any reduction of the excess of deductions allowed for the taxable year over gross  income for  such  year, and any reduction in the amount of capital losses which  would (without regard to section one thousand two hundred eleven of  the internal  revenue code) be allowed for such year, shall be treated as an increase in the applicable tax base.  (3) This subsection shall apply to any item which is attributable to--  (A) any listed transaction, and  (B)  any reportable transaction (other than a listed transaction) if a significant purpose of such transaction is the avoidance or  evasion  of tax.  (4)  Paragraph one of this subsection shall be applied by substituting "thirty percent" for "twenty percent" with respect to the portion of any reportable  transaction  understatement  with  respect  to   which   the requirement  of  clause (i) of subparagraph (B) of paragraph ten of this subsection is not met.  (5)  For  purposes  of  this   subsection,   the   terms   "reportable transaction"  and  "listed  transaction" have the meanings given to such terms by section twenty-five  of  this  chapter,  the  term  "reportable transaction"  shall  include  a  "New  York  reportable  transaction" as defined in such section twenty-five, and the term  "listed  transaction" shall  include any transaction designated as a tax avoidance transaction pursuant to such section twenty-five.  (6) In the case of an understatement (as defined in subsection (k)  of this section)  (A)  the  amount  of such understatement (determined without regard to this paragraph) shall be increased by the aggregate amount of reportable transaction understatements for purposes  of  determining  whether  such understatement  is  a substantial understatement under subsection (k) of this section, and (B) the addition to tax under subsection (k)  of  this section  shall apply only to the excess of the amount of the substantial understatement (if any) after the application  of  subparagraph  (A)  of this  paragraph  over  the  aggregate  amount  of reportable transaction understatements.  (7) References to an understatement (or a  deficiency)  in  subsection (f)  of  this  section  shall  be  treated  as including references to a reportable transaction understatement.  (8)  This  subsection  shall  not  apply  to  any   portion   of   any understatement  on  which  a  penalty is imposed under subsection (f) of this section.  (9) Except as provided in regulations prescribed by the  commissioner, in  no  event  shall  any  tax  treatment  included with an amendment or supplement to a return of tax be taken into account in  determining  the amount  of any reportable transaction understatement if the amendment or supplement is filed after the earlier of the date the taxpayer is  first contacted by the commissioner regarding the examination of the return or such other date as is specified by the commissioner.  (10)(A) No penalty shall be imposed under this subsection with respect to any portion of a reportable transaction understatement if it is shown that there was a reasonable cause for such portion and that the taxpayer acted in good faith with respect to such portion.  (B)  Subparagraph  (A)  of  this  paragraph  shall  not  apply  to any reportable transaction understatement unless:  (i) the relevant facts affecting the tax treatment  of  the  item  are adequately  disclosed  in  accordance  with  section twenty-five of this chapter,  (ii) there is or was substantial authority for such treatment, and  (iii) the taxpayer reasonably believed that such  treatment  was  more likely than not the proper treatment. A  taxpayer  failing  to  adequately disclose in accordance with section twenty-five of this chapter shall be treated as meeting the requirements  of clause (i) of this subparagraph if the penalty for such  failure  was rescinded under subsection (p) of this section.  (11)(A) A taxpayer shall be treated as having a reasonable belief with respect to the tax treatment of an item only if such belief  (i) is based on the facts and law that exist at the time the return of tax which includes such tax treatment is filed, and  (ii) relates solely to the taxpayer's chances of success on the merits of  such treatment and does not take into account the possibility that a return will not be audited, such treatment will not be raised on  audit, or such treatment will be resolved through settlement if it is raised.  (B)(i) An opinion of a tax advisor may not be relied upon to establish the reasonable belief of a taxpayer if  (I)  the tax advisor is described in clause (ii) of this subparagraph, or  (II) the opinion is described in clause (iii) of this subparagraph.  (ii) A tax advisor is described in this clause if the tax advisor:  (I) is a material advisor (within the meaning of section six  thousand one  hundred  eleven of the internal revenue code or within such meaning as it also applies to a New York reportable transaction  as  defined  in section   twenty-five   of   this   chapter)  and  participates  in  the organization, management, promotion, or sale of the  transaction  or  is related  (within  the  meaning  of subsection (b) of section two hundred sixty-seven of the internal revenue code or subsection  (b)  of  section seven  hundred  seven of the internal revenue code) to any person who so participates,  (II) is compensated directly or indirectly by a material advisor  with respect to the transaction,  (III)  has  a fee arrangement with respect to the transaction which is contingent on all  or  part  of  the  intended  tax  benefits  from  the transaction being sustained, or  (IV)  has  a  disqualifying  financial  interest  with  respect to the transaction.  (iii) For purposes of clause (i) of this subparagraph, an  opinion  is disqualified if the opinion  (I)  is  based on unreasonable factual or legal assumptions (including assumptions as to future events),  (II) unreasonably relies on representations, statements, findings,  or agreements of the taxpayer or any other person,  (III) does not identify and consider all relevant facts, or  (IV)  fails  to  meet  any  other  requirement as the commissioner may prescribe.   * NB Repealed July 1, 2024  (k-2) No penalty will be imposed pursuant to subsection (c) or (k)  of this section for a taxable year beginning on or after January first, two thousand  eight  and  before  January first, two thousand nine resulting from the denial of an empire zone tax credit  claimed  by  the  taxpayer because  an empire zone retention certificate was not issued pursuant to subdivision (w) of  section  nine  hundred  fifty-nine  of  the  general municipal  law  to the empire zone enterprise which is the basis for the tax credit or credits claimed on the return or report.  (l) 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 article nine, nine-A, nine-B or nine-C of 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.  (2) For purposes  of  paragraph  one  of  this  subsection,  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  subsection,  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 subsection shall be in addition to any other penalty provided by law.  (n) 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  two hundred eleven, 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.   * (p)  Failure  to  disclose   or   provide   reportable   transaction information.    -- (1) Any person who fails to file, disclose or provide any  statement,  return  or  other  document  which  is  required  under subdivision  (a)  of  section  twenty-five  of  this chapter shall pay a penalty in the amount determined under paragraph two of this subsection.  (2)(A) Except as provided in subparagraph (B) of this  paragraph,  the amount  of  the  penalty under paragraph one of this subsection shall be twenty thousand dollars.  (B) The amount of the penalty under paragraph one of  this  subsection with respect to a listed transaction shall be fifty thousand dollars.  (3)   For   purposes   of   this  subsection,  the  terms  "reportable transaction" and "listed transaction" shall have the  same  meanings  as used  in  section  twenty-five  of  this  chapter,  the term "reportable transaction" shall  include  a  "New  York  reportable  transaction"  as defined  in  such section twenty-five, and the term "listed transaction" shall include any transaction designated as a tax avoidance  transaction pursuant to such section twenty-five.  (4)  The  commissioner  may  rescind all or any portion of any penalty imposed by this subsection with respect to any violation if  (A) the violation is with respect to a  reportable  transaction  other than a listed transaction, and  (B)   rescinding   the  penalty  would  promote  compliance  with  the requirements of this chapter and effective tax administration.  (5) The penalty imposed by this section shall be in  addition  to  any other penalty imposed by this chapter.   * NB Repealed July 1, 2024   * (q)  Failure to disclose or provide reportable transaction return.-- (1) Any person who fails to file, disclose  or  provide  any  statement, return  or  other  document  which  is required under subdivision (b) of section twenty-five of this chapter shall pay a penalty  in  the  amount determined under paragraph two of this subsection.  (2)(A)  Except  as provided in subparagraph (B) of this paragraph, the amount of the penalty under paragraph one of this  subsection  shall  be twenty thousand dollars.  (B)  The  amount of the penalty under paragraph one of this subsection with respect to a listed transaction shall be the greater of  (i) fifty thousand dollars or,  (ii)  fifty percent of the gross income that the organizer or material advisor derived with respect to activities that were the basis  for  the requirement to file, disclose or provide information pursuant to section six  thousand  eleven  of  the internal revenue code, to the extent such gross income is attributable to the avoidance of any tax  imposed  under article nine, nine-A or thirty-three of this chapter.  (C) Clause (ii) of subparagraph (B) of this paragraph shall be applied by  substituting  "seventy-five percent" for "fifty percent" in the case of an intentional failure or act described  in  paragraph  one  of  this subsection.  (3)   For   purposes   of   this  subsection,  the  terms  "reportable transaction" and "listed transaction" shall have the  same  meanings  as used  in  section  twenty-five  of  this  chapter,  the term "reportable transaction" shall  include  a  "New  York  reportable  transaction"  as defined  in  such section twenty-five, and the term "listed transaction" shall include any transaction designated as a tax avoidance  transaction pursuant to such section twenty-five.  (4)  The  commissioner  may  rescind all or any portion of any penalty imposed by this subsection with respect to any violation if  (A) the violation is with respect to a  reportable  transaction  other than a listed transaction, and  (B)   rescinding   the  penalty  would  promote  compliance  with  the requirements of this chapter and effective tax administration.  (5) The penalty imposed by this subsection shall be in addition to any other penalty imposed by this chapter, except that no penalty  shall  be imposed  under  subparagraph  (A)  or  clause (i) of subparagraph (B) of paragraph two of subsection (y) of section six  hundred  eighty-five  of this  chapter for the same failure that is the basis for a penalty under this subsection. Nothing in this paragraph shall preclude the imposition of a penalty under clause (ii) of subparagraph (B) of paragraph  two  of subsection  (y)  of  section six hundred eighty-five of this chapter for the same failure that is the basis for a penalty under  clause  (ii)  of subparagraph (B) of paragraph two of this subsection.   * NB Repealed July 1, 2024   * (r) Failure to maintain list of advisees.-- (1) If any person who is required to maintain a list under subdivision (c) of section twenty-five of  this  chapter  fails to make a duplicate of such list available upon written request by the commissioner in accordance with such  subdivision within  twenty business days after the date of such request, such person shall pay a penalty of ten thousand dollars for each day of such failure after such twentieth day.  (2) No penalty shall be imposed by paragraph one  of  this  subsection with  respect  to  the  failure  on  any  day  if such failure is due to reasonable cause.   * NB Repealed July 1, 2024   * (s) Tax preparer penalty.-- (1) If:  (A) any part of any understatement of liability with  respect  to  any return  or claim for refund is due to a position for which there was not a reasonable belief that the tax treatment in  that  position  was  more likely than not the proper treatment,  (B)  any  person  who  is  a  tax return preparer with respect to such return or claim knew (or reasonably should have known) of such position, and  (C) such position was not disclosed as provided in subsection  (k)  of this  section  or there was no reasonable basis for the tax treatment of  that position, such person shall pay a penalty of  up  to  one  thousand dollars  with  respect  to  such return or claim unless it is shown that there is reasonable cause for the understatement and such  person  acted in good faith.  (2) If any part of any understatement of liability with respect to any return or claim for refund is due  (A) to a willful attempt in any manner to understate the liability for tax by a person who is a tax return preparer with respect to such return or claim, or  (B)  to  any reckless or intentional disregard of rules or regulations by any such person, such person shall  pay  a  penalty  of  up  to  five thousand  dollars  with respect to such return or claim. With respect to any return or claim, the amount of the penalty payable by any person  by reason  of  this paragraph shall be reduced by the amount of the penalty paid by such person by reason of paragraph one of this subsection.  (3) For purposes of  this  subsection,  the  term  "understatement  of liability"  means  any  understatement  of  the  net amount payable with respect to any tax imposed under article nine, nine-A or thirty-three of this chapter or any  overstatement  of  the  net  amount  creditable  or refundable with respect to any such tax.  (4)  This  subsection  shall not apply if the penalty under subsection (l) of this section is imposed on the tax return preparer  with  respect to such understatement.   * NB Repealed July 1, 2024   * (t) Promoting abusive tax shelters.-- (1) Any person who  (A)(i) organizes (or assists in the organization of)  (I) a partnership or other entity,  (II) any investment plan or arrangement, or  (III) any other plan or arrangement, or  (ii) participates (directly or indirectly) in the sale of any interest in  an  entity  or plan or arrangement referred to in clause (i) of this subparagraph, and  (B) makes or furnishes or causes another person to make or furnish (in connection with such organization or sale)  (i) a statement with respect to the allowability of any  deduction  or credit,  the  excludability  of any income, or the securing of any other tax  benefit  by  reason  of  holding  an  interest  in  the  entity  or participating  in  the plan or arrangement which the person knows or has reason to know is false or fraudulent as to any material matter, or  (ii) a gross valuation overstatement as to any material matter, and  (C) satisfies any of the following conditions  (i) the person is organized in this state,  (ii) the person is doing business in this state,  (iii) the person is deriving income in this state, or  (iv)  the  person  conducts  any  of  the  activities   described   in subparagraph (A) or (B) of this paragraph within the state of New York, shall  pay,  with respect to each activity described in subparagraph (A) of this paragraph, a penalty equal to one thousand dollars  or,  if  the person  establishes  that it is lesser, one hundred percent of the gross income derived (or to be derived) by such person from such  activity  to the  extent  such gross income is attributed to the avoidance of any tax imposed under articles nine, nine-A or  thirty-three  of  this  chapter; provided,  however,  that if an activity with respect to which a penalty imposed under this subsection involves a statement described  in  clause (i) of subparagraph (B) of paragraph one of this subsection, the penalty shall  be  equal  to fifty percent of the gross income derived (or to be derived) from that activity within the state by the person on which  the penalty  is  imposed. For purposes of the preceding sentence, activities  described in clause (i) of  subparagraph  (A)  of  this  paragraph  with respect  to  each  entity  or arrangement shall be treated as a separate activity and participation in each sale  described  in  clause  (ii)  of subparagraph (A) of this paragraph shall be so treated.  (2)(A)  For  purposes  of  this  subsection, the term "gross valuation overstatement" means any statement as to the value of  any  property  or services if--  (i)  the  value  so  stated  exceeds two hundred percent of the amount determined to be the correct valuation, and  (ii) the value of such property or services is directly related to the amount of any deduction or credit allowable under this  chapter  to  any participant.  (B) The commissioner may waive all or any part of the penalty provided by  paragraph one of this subsection with respect to any gross valuation overstatement on a showing that there was a  reasonable  basis  for  the valuation and that such valuation was made in good faith.  (3) The penalty imposed by this subsection shall be in addition to any other penalty provided by law.   * NB Repealed July 1, 2024  (u)  False or fraudulent document penalty. Any taxpayer that submits a false or fraudulent document to the department  will  be  subject  to  a penalty  of  one hundred dollars per document submitted, or five hundred dollars per tax return submitted. This penalty will be  in  addition  to any other penalty or addition provided by law.  (v)  Failure  to  supply  all  the  information required or to provide correct information in secretary of state statements. Unless it is shown that such failure to provide the statement and information  required  by section  four  hundred  eight  of the business corporation law is due to reasonable cause and not to willful neglect, there  shall,  upon  notice and demand by the commissioner and in the same manner as tax, be paid by the  taxpayer  failing  to  supply  complete  and correct information, a penalty of two hundred fifty dollars per corporation required to provide such information.