§ 133. Additions to tax and civil penalties. (a) Failure to file tax
return.--In case of failure to file a tax return under this title 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 per cent of
the amount of such tax if the failure is for not more than one month,
with an additional five per cent for each additional month or fraction
thereof during which such failure continues, not exceeding twenty-five
per cent in the aggregate. For this purpose, the amount of tax required
to be shown on the tax 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.

(b) Deficiency due to negligence.--If any part of a deficiency is due
to negligence or intentional disregard of this title or rules or
regulations hereunder (but without intent to defraud), there shall be
added to the tax an amount equal to five per cent of the deficiency.

(c) Failure to file declaration or underpayment of estimated tax.--If
any taxpayer fails to file a declaration of estimated tax or fails to
pay all or any part of an installment of estimated tax, he 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 rate set by the
commissioner of finance pursuant to section one hundred forty-five, or,
if no rate is set, at the rate of six per centum 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. The amount of underpayment shall be the excess of the
amount of the installment which would be required to be paid if the
estimated tax were equal to ninety per cent of the tax shown on the
return for the taxable year (or if no return was filed, ninety 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. No
underpayment shall be deemed to exist with respect to a declaration or
installment otherwise due on or after the taxpayer's death. In any case
in which there would be no underpayment if this subdivision were applied
by substituting "eighty percent" for "ninety percent" where it appears
in the second preceding sentence, the addition to tax under this
subdivision shall be equal to seventy-five percent of the amount
otherwise determined under this subdivision.

(d) Exception to addition for underpayment of estimated tax.--The
addition to tax under subdivision (c) with respect to any underpayment
of any installment shall not be imposed of the total amount of all
payments of estimated tax made on or before the last date prescribed for
the payment of such installment equals or exceeds whichever of the
following is the lesser--

(1) 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--

(A) 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

(B) 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 his
return for, and the law applicable to, the preceding taxable year, or

(C) An amount equal to ninety per cent of the tax for the taxable year
computed by placing on an annualized basis the unincorporated business
taxable income for the months in the taxable year ending before the
month in which the installment is required to be paid. For purposes of
this subparagraph, the unincorporated business taxable income shall be
placed on an annualized basis by--

(i) multiplying by twelve (or, in the case of a taxable year of less
than twelve months, the number of months in the taxable year) the
unincorporated business taxable income for the months in the taxable
year ending before the month in which the installment is required to be
paid, and

(ii) dividing the resulting amount by the number of months in the
taxable year ending before the month in which such installment date
falls, or

(D) (i) If the base period percentage for any six consecutive months
of the taxable year equals or exceeds seventy percent, an amount equal
to ninety percent of the tax determined in the following manner--

(I) take the unincorporated business taxable income for all months
during the taxable year preceding the filing month,

(II) divide such amount 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 subclause
(II), and

(IV) multiply the tax determined under subclause (III) by the base
period percentage for the filing month and all months during the taxable
year preceding the filing month.

(ii) For purposes of clause (i)--

(I) the base period percentage for any period of months shall be the
average percent which the unincorporated business taxable income for the
corresponding months in each of the three preceding years bears to the
unincorporated business taxable income for the three preceding taxable
years. The commissioner of finance may by regulations provide for the
determination of the base period percentage in the case of new
unincorporated businesses and other similar circumstances, and

(II) the term "filing month" means the month in which the installment
is required to be paid; or

(2) An amount equal to ninety percent of the tax computed, at the
rates applicable to the taxable year, on the basis of the actual
unincorporated business taxable income for the months in the taxable
year ending before the month in which the installment is required to be
paid.

(e) Allocation of unincorporated business tax.--(1) Except as provided
in paragraph two hereof, subparagraphs (A) and (B) of paragraph one of
subdivision (d) of this section shall not apply in the case of any
taxpayer which had unincorporated business taxable income, or the
portion thereof allocated within the city, of one million dollars or
more for any taxable year during the three taxable years immediately
preceding the taxable year involved.

(2) The amount treated as the estimated tax under subparagraphs (A)
and (B) of paragraph one of subdivision (d) of this section shall in no
event be less than seventy-five percent of the tax shown on the return
for the taxable year beginning in nineteen hundred eighty-three or, if
no return was filed, seventy-five percent of the tax for such year.

(f) Deficiency due to fraud.--If any part of a deficiency is due to
fraud, there shall be added to the tax an amount equal to fifty per cent
of the deficiency. This amount shall be in lieu of any other addition to
tax imposed by subdivision (a) or (b).

(g) Additional penalty.--Any taxpayer who with fraudulent intent shall
fail to pay 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 this title, shall be liable to a penalty of
not more than one thousand dollars, in addition to any other amounts
required under this title, to be imposed assessed and collected by the
director of finance. The director of finance shall have the power, in
his discretion, to waive, reduce or compromise any penalty under this
subdivision.

(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 title to income tax or tax imposed by this title,
shall be deemed also to refer to the additions to tax and penalties
provided by this section. For purposes of section one hundred
twenty-nine, this subdivision shall not apply to--

(1) any addition to tax under subdivision (a) except as to that
portion attributable to a deficiency;

(2) any addition to tax under subdivision (c); and

(3) any additional penalty under subdivision (g).

(i) Determination of deficiency.--For purposes of subdivisions (b) and
(f), the amount shown as the tax by the taxpayer upon his 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) 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
subdivision, 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.
The amount of the understatement under the preceding sentence 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 commissioner of finance may waive all or any part of the
addition to tax provided by this subdivision 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.