(a) A penalty shall not be imposed with respect to a portion of an underpayment if the taxpayer shows that there was reasonable cause for the underpayment and that the taxpayer acted in good faith.
(b) Relief for reasonable cause is available for the following penalties:
(1) Accuracy-related penalty under § 47-4211;
(2) Failure to pay penalty under § 47-4213;
(3) Failure to file penalty under § 47-4213;
(4) Return preparer penalties under § 47-4217;
(5) Personal liability for failure to collect or pay tax under § 47-4491; and
(6) Failure to record timely a deed under § 47-1433.
(c) Reasonable cause generally exists if, based on all the facts and circumstances, the taxpayer exercises ordinary business care and prudence in determining his or her tax obligations, but was unable to comply with a prescribed duty within the prescribed time. Ordinary business care and prudence includes making provision for business obligations to be met when reasonably foreseeable events occur.
(June 9, 2001, D.C. Law 13-305, § 403(b), 48 DCR 334; Apr. 4, 2003, D.C. Law 14-282, § 11(zz), 50 DCR 896.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-282 made nonsubstantive changes in subsecs. (b)(4) and (b(5); and added subsec. (b)(6).
Temporary Amendments of Section
For temporary (225 day) amendment of section, see § 12(iii) of Tax Clarity and Recorder of Deeds Temporary Act of 2002 (D.C. Law 14-191, October 5, 2002, law notification 49 DCR 9549).
For temporary (225 day) amendment of section, see § 12(iii) of Tax Clarity and Related Amendments Temporary Act of 2003 (D.C. Law 14-228, March 23, 2003, law notification 50 DCR 2741).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 12(hhh) of Tax Clarity and Recorder of Deeds Emergency Act of 2002 (D.C. Act 14-381, June 6, 2002, 49 DCR 5674).
For temporary (90 day) amendment of section, see § 12(iii) of Tax Clarity and Related Amendments Emergency Act of 2002 (D.C. Act 14-456, July 23, 2002, 49 DCR 8107).
For temporary (90 day) amendment of section, see § 12(iii) of Tax Clarity and Related Amendments Congressional Review Emergency Act of 2002 (D.C. Act 14-510, October 23, 2002, 49 DCR 10247).
Legislative History of Laws
For Law 13-305, see notes under § 47-4201.
For Law 14-282, see notes following § 47-902.
(a) The Mayor may abate the unpaid portion of the assessment of a tax or a liability in respect of a tax upon a request in a form prescribed by the Mayor, which is:
(1) Assessed after the expiration of the applicable period of limitation; or
(2) Erroneously or illegally assessed, in whole or in part.
(b)(1) In the case of an assessment of interest on a deficiency attributable in whole or in part to an unreasonable error or delay by the Mayor, the Mayor may abate the assessment of all or a part of the interest. The Mayor may refuse to abate the assessment of interest if a significant aspect of the error or delay is attributable to the taxpayer involved.
(2) The Mayor shall abate the assessment of all interest on an erroneous refund under § 47-4201 until the date that demand for repayment is made, unless the taxpayer (or a related party) has in any way caused the erroneous refund.
(c)(1) The Mayor shall abate any portion of interest or penalty attributable to erroneous advice furnished to the taxpayer in writing by the Mayor.
(2) Paragraph (1) of this subsection shall apply only if:
(A) The written advice was reasonably relied upon by the taxpayer; and
(B) The portion of the penalty or addition to tax did not result from a failure by the taxpayer to provide adequate or accurate information.
(d)(1) For purposes of this subsection, the term:
(A) "Notice" means a document specifically stating the amount of the taxpayer's liability and the basis for the liability.
(B) "Abatement date" means the day after the expiration of the one-year period beginning on the later of: (i) the date on which the return is filed, or (ii) the due date of the return determined without regard to extensions.
(2) If an individual files a timely individual income tax return imposed by this title (determined with regard to extensions) and the Mayor does not provide a notice to the individual before the abatement date, the Mayor shall abate any interest or penalty for a failure relating to the return for the period (A) beginning on the abatement date, and (B) ending 21 days after the date on which the notice is provided by the Mayor.
(3) Paragraph (2) of this subsection shall not apply to:
(A) A penalty imposed by § 47-4213;
(B) Interest, penalty, an addition to tax, or an additional amount in a case involving fraud;
(C) Interest, penalty, an addition to tax, or an additional amount with respect to a tax liability shown on the return; or
(D) A criminal penalty.
(4) This subsection shall apply only to an individual income tax return.
(June 9, 2001, D.C. Law 13-305, § 403(b), 48 DCR 334; Apr. 4, 2003, D.C. Law 14-282, § 11(aaa), 50 DCR 896.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-282, in subsec. (d)(2), substituted "individual income tax return" for "return of tax" and substituted "individual" for "taxpayer"; and added subsec. (d)(4).
Temporary Amendments of Section
For temporary (225 day) amendment of section, see 12(jjj) of Tax Clarity and Recorder of Deeds Temporary Act of 2002 (D.C. Law 14-191, October 5, 2002, law notification 49 DCR 9549).
For temporary (225 day) amendment of section, see 12(jjj) of Tax Clarity and Related Amendments Temporary Act of 2003 (D.C. Law 14-228, March 23, 2003, law notification 50 DCR 2741).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 12(iii) of Tax Clarity and Recorder of Deeds Emergency Act of 2002 (D.C. Act 14-381, June 6, 2002, 49 DCR 5674).
For temporary (90 day) amendment of section, see § 12(jjj) of Tax Clarity and Related Amendments Emergency Act of 2002 (D.C. Act 14-456, July 23, 2002, 49 DCR 8107).
For temporary (90 day) amendment of section, see § 12(jjj) of Tax Clarity and Related Amendments Congressional Review Emergency Act of 2002 (D.C. Act 14-510, October 23, 2002, 49 DCR 10247).
Legislative History of Laws
For Law 13-305, see notes under § 47-4201.
For Law 14-282, see notes following § 47-902.
