2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART VII - Administrative Provisions, Procedures, Interests, Penalties, and Additions to Taxes (§§ 33001 — 33423) › Chapter 1063 - Interest, Penalties, and Additions to Taxes (§§ 33071 — 33091) › § 33073 - Additions to taxes in cases of deficiency

(a) Substantial undervaluation or negligence.—
(1) If any portion of any deficiency is the result of:
(A) Negligence or intentional disregard for rules and regulations;
(B) a substantial undervaluation of income taxes;
(C) a statement of a valuation of a property that is substantially incorrect;
(D) a substantial overvaluation of obligations for contributions under § 30129 of this title, or
(E) denial of tax benefits claimed by reason of an absence of financial substance in the transaction, but with no intention to defraud, twenty percent (20%) of the total amount of the deficiency (in addition to such deficiency) shall be assessed, charged, and paid in the same manner as a deficiency, except that the provisions of § 33071 of this title in relation to interest on deficiencies, shall not apply.
(2) Negligence.— For purposes of this subsection, the term “negligence” includes failure to make a reasonable effort to comply with the provisions of this Code, and the term “disregard” includes carelessness, recklessness, or willful noncompliance.
(3) Substantial undervaluation of income taxes.—
(A) Substantial undervaluation—In general.— For purposes of this subsection, there is a substantial undervaluation of income taxes for any taxable year if the amount of the undervaluation for such taxable year exceeds, whichever is the greater amount:
(i) Ten percent (10%) of the taxes required to be reported in the tax return for the taxable year, or
(ii) five thousand dollars ($5,000).
(B) Special rule for corporations.— As for corporations other than corporations of individuals, there shall be a substantial undervaluation of income taxes for any taxable year in which the amount of the undervaluation for such taxable year exceeds, whichever is the less amount:
(i) Ten percent (10%) of the taxes required to appear in the tax return for such taxable year, or
(ii) million dollars ($1,000,000).
(C) Undervaluation—In general.— For purposes of this clause, the term “undervaluation” means the excess of:
(i) The amount of taxes required to be included in the tax return for such taxable year, over
(ii) the amount of taxes imposed included in the tax return, minus any reduction (within the meaning of § 33001(c)(2) of this title).
(4) Substantially incorrect valuation of any property—In general.— For purposes of this subsection, there is a substantially incorrect valuation of any property if the value of such property (or its adjusted base) as appears in a tax return under this Code is one hundred and fifty percent (150%) or more of the amount determined to be the correct amount for such valuation or adjusted base (as the case may be). No penalty shall be imposed on account of subsection (a)(1)(C) of this section, unless the portion of the insufficiency for the taxable year which may be attributed to substantially incorrect statements of valuation exceeds five thousand dollars ($5,000)(ten thousand dollars ($10,000) for corporations other than corporations of individuals).
(5) Substantial overvaluation of obligations for contributions in § 30129 of this title.— For purposes of this subsection, there is a substantial overvaluation of obligations for contributions in § 30129 of this title if the actuarial determination of the obligations taken into account for the purpose of computing the deduction is 200 percent or more over the amount determined to be the correct amount of such obligations. No penalty shall be imposed on account of subsection (a)(1)(D), unless the portion of the insufficiency for the taxable year which may be attributed to substantial overvaluations of pension obligations exceeds one thousand dollars ($1,000).
(6) Increase of penalty for grossly incorrect valuation statements.—
(A) To the extent that a portion of the insufficiency to which this section applies may be attributed to one or more grossly incorrect valuation statements, subsection (a)(1) shall apply with regards to such portion, except that the phrase “forty percent (40%)” shall replace the phrase “twenty percent (20%)” in such subsection.
(B) The term “grossly incorrect valuation statements” means:
(i) Any statement of a substantially incorrect valuation of a property as determined under clause (3), except that the phrase “two hundred percent (200%)” shall replace the phrase “one hundred fifty percent (150%)” in such clause.
(ii) Any substantial overvaluation of the obligations for contributions under § 30129 of this title, of a pension as determined under clause (5), except that the phrase “four hundred percent (400%)” shall replace the phrase “two-hundred percent (200%)” in such clause.
(b) Fraud.— If any portion of any deficiency is the result of fraud with the intent to evade taxes, then one hundred percent (100%) of the total sum of the deficiency (in addition to such deficiency) shall be thus assessed, charged, and paid, regardless of any criminal action that may be filed against the taxpayer for such actions.
(c) Valuation of property included in decedent’s estate as a gift for less than its value.— If all or part of any deficiency determined under §§ 31001 et seq. of this title arose because the taxpayer included and valued in his/her tax return any property included in the gross decedent’s estate, or is the object of any property included in the gross decedent’s estate, or is the object of any gift under seventy percent (70%) of its value, an amount not to exceed double the part of such deficiency attributable to the digression from the value of such property in excess of thirty percent (30%) shall be imposed and collected in addition to the deficiency.
History —Jan. 31, 2011, No. 1, § 6030.03, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 157.