New Jersey Administrative Code › Title 18 - TREASURY - TAXATION › Chapter 2 - GENERAL POLICIES AND PROCEDURES › Subchapter 2 - PENALTIES AND INTEREST › Section 18:2-2.7 - Abatement of penalty and interest calculated on such penalty

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The Director may
				waive the payment of the whole, or any part, of any penalty, except post-amnesty
				penalties (such as those assessed under
				54:53-16 to 19), and any interest
				accruing from such penalty, if the failure to pay any tax when due or the failure to
				file any return is explained to the satisfaction of the Director.
(b) An abatement will be granted if the taxpayer
				can show reasonable cause for failure to file any return or pay any tax when due.
				All of the facts alleged as a basis for reasonable cause for failure to timely file
				a return or for failure to timely pay or pay over any tax due must be affirmatively
				shown in a written statement, containing a declaration that it is made under
				penalties of perjury, made by the taxpayer or other person against whom the penalty
				or penalties have been assessed or are assessable. Where the taxpayer or other
				person is unable to provide such statement or does not have a personal knowledge of
				such facts, a showing of reasonable cause may be made on behalf of the taxpayer or
				other person by an individual with a personal knowledge of such facts. In
				determining whether reasonable cause exists, in addition to an evaluation of such
				facts, the taxpayer's previous compliance record with respect to all of the taxes
				imposed may be taken into account.
(c)
				The following are examples of reasonable cause, when clearly established by or on
				behalf of the taxpayer or other person.
1. The
				death or serious illness of the taxpayer or a partner, officer, director,
				shareholder, employee, or other representative of the taxpayer or such individual's
				unavoidable absence from the usual place of business, which precluded timely
				compliance, may constitute reasonable cause provided that:
i. In the case of the failure to file any return,
				the applicable return is filed; or
ii.
				In the case of the failure to pay or pay over any tax, such amount is paid or paid
				over unless a taxpayer can demonstrate reasonable cause as required under (d) below,
				within a justifiable period of time after the death, illness, or absence. A
				justifiable period of time is that period which is substantiated by or on behalf of
				the taxpayer or such other person liable for penalty, as a reasonable period of time
				for filing the return and/or for paying any tax based on the facts and circumstances
				in each case. Substantiation may be required by the submission of third-party
				verification in the form of, for example, doctor's reports and hospital insurance
				carrier reports.
Example: It was established that illness incapacitated the owner
				  of a small business during the period of delinquency. The taxpayer further
				  established that no other person had access to sufficient information which would
				  enable such person to timely file the delinquent return and pay over the tax due.
				  The return was filed and the tax due was paid over within a justifiable period of
				  time after the owner returned to work. This constitutes reasonable cause for failure
				  to file the return and for failure to pay the tax due.