(a) The failure, neglect or refusal of a tenant or cooperator to furnish information concerning their income or that of any household member, or to cooperate in the verifying of such reported income, will be assumed to indicate excess income. In such cases, rent will be raised to the maximum in the surcharge schedule. However, upon submission of an affidavit of income and/or of proper documentation, surcharges, if any, will be assessed on basis of verified income, with the effective date of any rent change to be the first of the month following the month in which the affidavit of income and/or proper documentation had been filed with the housing company. In no event will credit be given for excess surcharges already assessed as a result of failure, neglect or refusal of tenant or cooperator to cooperate in income determination as set forth in this section.

(b) Upon proper verification of income, per procedures outlined in section 1727-2.3 of this Subpart, if it is determined that tenant or cooperator, or any household member, willfully misrepresented any information, then the housing company shall calculate surcharges in accordance with surcharge schedule and assess such surcharge, as rent, each month, retroactive to the initial month in which such surcharges should have been paid. A housing company shall charge such tenant or cooperator a fee of $150 in payment for the expenditure of housing company time and labor incurred to determine the true income of the tenant or cooperator.

(c) In the event a tenant or cooperator, or any household member, has indicated that either a Federal income tax return or a New York State income tax return for the year in question has not been filed, and subsequent verification procedures show that such a return was filed, the procedures set forth in subdivision (b) of this section are to be followed by the housing company.

(d) In no case shall the housing company waive the provisions of subdivisions (a) through (c) of this section.