GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2009

H                                                                                                                                                   D

HOUSE DRH50321-ME-52  (3/12)

Short Title:        Geithner Tax Fairness for NC Citizens Act.		(Public)
Sponsors:	Representative Dockham.
Referred to:

A BILL TO BE ENTITLED

AN ACT to provide north carolina taxpayers with the same tax treatment applied to united states treasury secretary timothy f. geithner by disallowing penalties when a taxpayer owes less than fifty thousand dollars of income taxes.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105-236(a) reads as rewritten:

"§ 105-236.  Penalties; situs of violations; penalty disposition.

(a)        Penalties. - The following civil penalties and criminal offenses apply:

…

(3)        Failure to File Return. - In case of failure to file any return on the date it is due, determined with regard to any extension of time for filing, the Secretary shall assess a penalty equal to five percent (5%) of the amount of the tax if the failure is for not more than one month, with an additional five percent (5%) for each additional month, or fraction thereof, during which the failure continues, not exceeding twenty-five percent (25%) in the aggregate, or five dollars ($5.00), whichever is the greater. This penalty does not apply when the amount of tax due is less than fifty thousand dollars ($50,000) and the taxpayer is an individual.

(4)        Failure to Pay Tax When Due. - In the case of failure to pay any tax when due, without intent to evade the tax, the Secretary shall assess a penalty equal to ten percent (10%) of the tax, subject to a minimum of five dollars ($5.00). This penalty does not apply in any of the following circumstances:

a.         When the amount of tax shown as due on an amended return is paid when the return is filed.

b.         When the Secretary proposes an assessment for tax due but not shown on a return and the tax due is paid within 45 days after the date of the notice of proposed assessment of the tax.

c. When the amount of tax due is less than fifty thousand dollars ($50,000) and the taxpayer is an individual.

(5)        Negligence. -

a.         Finding of negligence. - For negligent failure to comply with any of the provisions to which this Article applies, or rules issued pursuant thereto, without intent to defraud, the Secretary shall assess a penalty equal to ten percent (10%) of the deficiency due to the negligence. negligence, but only if the amount of tax due is fifty thousand dollars ($50,000) or greater and the taxpayer is not an individual.

b.         Large individual income tax deficiency. - In the case of individual income tax, if a taxpayer understates taxable income, by any means, by an amount equal to twenty-five percent (25%) or more of gross income, the Secretary shall assess a penalty equal to twenty-five percent (25%) of the deficiency. deficiency, but only if the amount of tax due is fifty thousand dollars ($50,000) or greater. For purposes of this subdivision, "gross income" means gross income as defined in section 61 of the Code.

.…"

SECTION 3.  This act is effective for taxable years beginning on or after January 1, 2009, and expires for taxable years beginning on or after January 1, 2013.