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SECTION 1085
Additions to tax and civil penalties
Tax (TAX) CHAPTER 60, ARTICLE 27
§ 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.