15 AAC 05.220. Additional penalty for negligence or intentional disregard

(a) A negligence-or-intentional-disregard penalty will, in the department's discretion, be assessed in addition to a penalty for failure to file, failure to pay, or civil fraud.

(b) If it is determined by the department that a tax deficiency or part of a tax deficiency is due to negligence or intentional disregard of a law or a regulation without intent to defraud, then a penalty of five percent will be assessed and collected. The penalty is computed on the total amount of the tax deficiency, even if the determination relates to only a part of the deficiency.

(c) Negligence is the failure to do something which a prudent and reasonable person, guided by those considerations which ordinarily regulate the conduct of human affairs, would do; it is also doing something which a prudent and reasonable person would not do.

(d) Intentional disregard of a law or a regulation without intent to defraud is the failure to comply with governing laws and regulations when the taxpayer has knowledge of the pertinent laws and regulations and does not have specific intent to evade the payment of tax. An error or honest difference of opinion does not constitute intentional disregard.

(e) Negligence or intentional disregard may be demonstrated by any relevant evidence, including but not limited to the following:

(1) the taxpayer has substantially deviated from the statutes or regulations in reporting income or claiming deductions after being advised by the department of the proper methods of reporting;

(2) the taxpayer has failed to keep adequate records;

(3) the taxpayer has exaggerated deductions unsubstantiated by facts; or

(4) the taxpayer has not justified an understatement of income.

History: Eff. 7/1/81, Register 78

Authority: AS 43.05.080

AS 43.05.220 (b)

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