Current through September 2, 2024
Section 63-3046(a), Idaho Code
01.
Negligence Defined. Negligence is the breach of a duty or obligation, recognized by law, that requires conformance to a certain standard of conduct.
02.
Imposition of Penalty. A five percent (5%) negligence penalty shall be imposed if the deficiency results from either negligence by the taxpayer or from disregard by the taxpayer or his agent of state or federal tax laws, rules of the Tax Commission, or Treasury Regulations. Situations that justify the penalty include but aren't limited to the following:
a. Taxpayer continues to make errors in reporting income, sales or assets, or claims erroneous deductions, exemptions, or credits even though these mistakes have been called to his attention in previous audit reports.
b. Taxpayer fails to maintain proper records and files returns containing unsubstantiated claims or substantial errors.
c. Taxpayer makes unsubstantiated or exaggerated claims of deductions or exemptions.
d. Taxpayer fails to offer any explanation for understating taxes.
e. Unreported taxable income is a material amount as compared with the reported income.
f. Taxpayer exhibits a careless disregard of his tax obligations.
g. For sales or use tax deficiencies, failure to keep valid files of resale and exemption certificates.
h. Failure to make the required estimated payment when requesting an extension of time for filing a return.
i. Taxpayer fails to provide the Tax Commission with a copy of a final federal determination according to Section 63-3069, Idaho Code.
j. Taxpayer fails to file an Idaho amended return according to Section 63-3069, Idaho Code.
k. Taxpayer fails to respond to requests to produce records substantiating items shown on the return.
l. Taxpayer fails to make available the fifty-one (51) state apportionment factor detail when requested.
03.
Negligence Penalty for Sales and Use Tax Deficiencies. For sales tax purposes, pertinent computations relating to substantial errors in Subsection 410.02.b. or material amount in Subsection 410.02.e., might include the following:
a. The ratio of untaxed sales that should have been taxed to total taxable sales;
b. The ratio of untaxed sales that should have been taxed to total sales;
c. The ratio of untaxed purchases subject to use tax to total taxable purchases and to total purchases; or
d. Other computations bearing on negligence.
04.
Waiver of Negligence Penalty. The Tax Commission shall consider all factors when determining whether to waive a negligence penalty. One (1) factor is the taxpayer's record for filing and paying state taxes. A good record for filing and paying tax on returns filed annually is not by itself a sufficient reason to waive the penalty.
05.
Circumstances Precluding Waiver of Penalty. The following circumstances do not constitute sufficient cause to waive the penalty:
a. An invalid or unapproved request for an extension of time to file or to do acts required by Idaho tax laws;
b. An unsettled dispute between the Tax Commission and the taxpayer concerning a tax liability; or
c. Inability to pay the tax.
Effective April 6, 2023
