20 CRR-NY 2396.11NY-CRR
20 CRR-NY 2396.11
20 CRR-NY 2396.11
2396.11 When returnand payment deemed made; failure to enroll penalty; reasonable cause.
(a) General filingand payment rules.
(1) ACH debit, ACHcredit and fedwire taxpayers.
The mailingrules specified in section 691 of the Tax Law and in regulations promulgatedthereunder shall not be applicable to returns filed and payments madeby taxpayers participating in the program and electing the ACH debit,ACH credit or fedwire payment option. Instead, such taxpayers (includingeducational organizations and health care providers voluntarily participating)shall be deemed to have timely filed their return when they complywith the applicable filing requirements described in section 2396.3,2396.7 or 2396.9 of this Part. Such taxpayers shall be deemed to havetimely paid the tax when the department's depository bank receivesthe payment of tax on or before applicable due date.
(2) Certified checktaxpayers.
The mailing rules specified insection 691 of the Tax Law and in regulations promulgated thereundershall be applicable to returns filed and payments made by taxpayersparticipating in the program and electing the certified check paymentoption, subject to the following:
(i) taxpayers (otherthan educational organizations and health care providers voluntarilyparticipating) utilizing the certified check option shall be deemedto have timely filed their return and paid the tax if they mail ordeliver their return and a certified check for their tax liabilityon or before the second business day prior to the otherwise applicabledue date;
(ii) educational organizationsand health care providers voluntarily participating and utilizingthe certified check payment option shall be deemed to have timelyfiled their return and paid the tax if they mail or deliver theirreturn and a certified check for their tax liability on or beforethe first business day following the otherwise applicable due date.
(b) Penalty for failureto enroll.
When a taxpayer required to participatein the program fails to enroll in the program in accordance with theprovisions of section 2396.4(b) of this Part, such taxpayer shallpay a penalty equal to $5,000; provided, however, that if such taxpayerenrolls in the program within 20 calendar days after notificationof the assessment of such penalty is sent by the department by certifiedmail, then such penalty shall be abated. Where the taxpayer continuesto fail to enroll in the program after such 20-day period, the taxpayershall pay an additional $500 if such failure is for not more thanone month, with an additional $500 for each additional month or partthereof during which such failure continues.
(c) Reasonable cause.
(1) General rules.
(i) Where a taxpayerparticipating in the program nonwillfully fails to file a withholdingtax return or to pay withholding tax at the time and in the mannerrequired by this Part (see section 685[f] of the Tax Lawfor the addition to tax), or where a taxpayer required to participatein the program fails to enroll at the time and in the manner requiredby this Part, the followingpenalty, addition or additions to tax set forth in section 9 or 685of the Tax Law must be imposed, as applicable, unless it is shownthat such failure was due to reasonable cause and not due to willfulneglect:
(a) failureto enroll in the Electronic Funds Program in accordance with the provisionsof section 2396.4(b) of this Part (see section 9[h] of theTax Law for the penalty);
(b) failure to file a withholding tax return on or beforethe last date prescribed for filing by this Part (see section 685[a][1]of the Tax Law for the addition to tax);
(c) failure to pay withholding taxshown on the return on or before the last day prescribed for payingby this Part (see section 685[a][2] of the TaxLaw for the addition to tax); or
(d) failure to pay withholding tax required to be shownon a withholding tax return within 10 days of the date of notice anddemand therefor (see section 685[a][3] of theTax Law for the addition to tax).
In the event that this penaltyor these additions to tax have been imposed and it is later determinedthat any such failure was due to reasonable cause and not due to willfulneglect, all or part of such penalty or additions to tax will be cancelled.The absence of willful neglect alone is not sufficient grounds fornot imposing the penalty or additions to tax or for cancelling thepenalty or additions to tax.
(ii) All of the factsalleged as a basis for reasonable cause and absence of willful neglectmay be required to be affirmatively shown in a written statement madeby the taxpayer against whom the additions to tax have been assessedor are assessable. Where such taxpayer is unable to provide such statementor does not have a personal knowledge of such facts, a showing ofreasonable cause and absence of willful neglect may be made on behalfof the taxpayer by an individual with a personal knowledge of suchfacts. In determining whether reasonable cause and absence of willfulneglect exists, in addition to an evaluation of such facts, the taxpayer'sprevious compliance record with respect to all of the taxes imposedpursuant to the Tax Law may be taken into account.
(2) Reasonable causegrounds.
The following exemplify groundsfor reasonable cause and absence of willful neglect, where clearlyestablished by or on behalf of the taxpayer:
(i) taxpayer inabilityto access the electronic payment reporting system on the requireddue date because of a systems failure beyond the taxpayer's control(i.e., a failure in the electronic payment reporting system);
(ii) department ordepartment depository bank systems failure preventing proper receiptof a payment of tax, or preventing proper reconciliation of a paymentof tax with a return;
(iii) taxpayer inabilityto timely complete a program transaction, due to any other circumstancesbeyond its control, but only if all possible remedial action is immediatelyinitiated; or
(iv) the circumstancesset forth in section 2392.1 of this Title, to the extent applicable.
20 CRR-NY 2396.11
Current through September 30, 2022
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IMPORTANT NOTE REGARDING CONTENT CURRENCY: JULY 31, 2023, is the date of the most recently produced official NYCRR supplement covering this rule section. For later updates to this section, if any, please: consult editions of the NYS Register published after this date; or contact the NYS Department of State Division of Admisnistrative Rules at [email protected]. See Help for additional information on the currency of this unofficial version of the NYS Rules.