Alabama Administrative Code
Title 810 - ALABAMA DEPARTMENT OF REVENUE
Chapter 810-14-1 - TAXPAYERS; BILL OF RIGHTS AND UNIFORM REVENUE PROCEDURES
Section 810-14-1-.33.01 - Assessment And Waive Of Civil Penalties
Universal Citation: AL Admin Code R 810-14-1-.33.01
Current through Register Vol. 42, No. 11, August 30, 2024
(1) SCOPE. This regulation applies to the assessment and waiver of civil penalties and does not include cases of negligence or fraud. Additionally, this regulation does not apply to penalties abated under Regulation 810-14-1-.05 dealing with the failure of the Department to comply with Section 40-2A-4 of the Code of Ala. 1975.
(2) PROCEDURE - Assessment.
(a) The Department may not assess civil
penalties in instances in which the taxpayer acted in good faith. For purposes
of this regulation, good faith includes, but is not limited to the following:
1. instances in which the taxpayer has been
cooperative during an audit and has a history of timely filing tax returns and
timely paying tax due; or
2.
instances in which the taxpayer relied upon erroneous written advice furnished
to the taxpayer by an employee of the Department if:
(i) the employee provided the written advice
in good faith while acting in an official capacity;
(ii) the written advice was reasonably relied
on by the taxpayer;
(iii) the
written advice was given in response to a specific written request of the
taxpayer; and
(iv) the penalties
did not result from the taxpayer's failure to provide adequate or accurate
information.
(b) The Department may not assess civil
penalties when, as the result of a change in regulations, change in law, or
court decision, it makes adjustments to a tax return(s) for a prior year(s)
resulting in additional tax liability.
(c) The Department may not assess civil
penalties when, as the result of a change in regulations, change in law, or
court decision, it realizes that a tax return(s) should have been filed in a
previous year(s); and the taxpayer voluntarily files the return(s) and pays the
tax liability prior to being contacted by the Department or the taxpayer files
the return(s) and pays the tax liability after notification.
(3) PROCEDURE - Waiver.
(a) If the Department assesses civil
penalties, such Civil penalties shall be waived upon a determination of "
reasonable cause." The burden of proving reasonable cause shall be on the
taxpayer. The taxpayer should submit in writing a request that the civil
penalty or penalties be waived for reasonable cause.
1. The taxpayer's written request for waiver
of civil penalties should outline the "reasonable cause" basis of the request
for waiver. The following events are sufficient to constitute "reasonable
cause":
(i) death, major illness, unavoidable
absence;
(ii) casualty or natural
disaster;
(iii) inability to obtain
necessary records;
(iv)
nonrecurring honest mistake;
(v)
reliance on the advice of a competent tax advisor, and
(vi) reliance on erroneous advise of ADOR
personnel.
2. The above
events are not be considered all inclusive in establishing "reasonable cause."
Taxpayers are not foreclosed from clearly establishing other reasons that
constitute "reasonable cause."
3.
The taxpayer's written request for waiver of civil penalties should be made to
the supervisor of the appropriate assessing section or division. The written
request for waiver of civil penalties should be attached to an audit or tax
return when it is presented to the supervisor for assessment proceedings or
when the audit is paid.
4. Appeals
made to the Administrative Law Division solely involving a request for penalty
waiver shall be referred to the Department's Director for Taxpayer Advocacy for
disposition.
Author: Michael Mason
Statutory Authority: Code of Ala. 1975, § 40-2A-11(h).
Disclaimer: These regulations may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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