CHAPTER 130

FORMERLY

HOUSE BILL NO. 266

AN ACT TO AMEND CHAPTERS 11, 53, 54, AND 55 OF TITLE 3D OF THE DELAWARE CODE RELATING TO STATE TAXES AND TO CERTAIN CIVIL PENALTIES AND RELATED PROCEDURES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each House thereof concurring therein):

Section 1. Amend §1194, Chapter 11, Title 30 of the Delaware Code by adding thereto a new subsection (g) to read as follows:

"(g)(1) In the case of a failure to file a personal income tax return under this Chapter at the time prescribed therefor (determined by taking into account any authorized extension of time for filing), unless it is shown that failure is due to reasonable cause, there shall be added to the amount required to be shown as tax on the return a penalty determined under paragraph (2) of this subsection.

(2) For purposes of paragraph (1) of this subsection, the amount of penalty shall be the lesser of $35 or the refund due on such return.

(1) The deficiency and appeal procedures provided in §1181 through §1186 of this
Chapter shall not apply to penalties assessed under this subsection; provided, however, that the taxpayer shall be notified of said penalty and may, within 9D days from the date of the mailing of such notification, institute a protest of said penalty to the Director of Revenue.".

Section 2. Amend §5325, Chapter 53, Title 30 of the Delaware Code by striking the symbol and figure "$1" as they appear therein and substitute in lieu thereof the symbol and figure "$15".

Section 3. Amend §5411, Chapter 54, Title 30 of the Delaware Code by striking the

phrase "additional tax" as it appears in subsection (a) of said Section and substitute in lieu thereof the phrase "additional tax, penalty".

Section 4. Amend §5411, Chapter 54, Title 30 of the Delaware Code by adding thereto a new subsection (e) to read as follows:

"(e) If any part of the additional tax determined to be due is due to negligence or intentional disregard of rules and regulations there shall be added to the tax an amount equal to 10% of the additional tax determined to be due.".

Section 5. Amend §5505, Chapter 55, Title 30 of the Delaware Code by designating

existing §5505 as subsection (a) of said Section and add thereto new subsections (b), (c), (d), and (e) to read as follows:

"(b) In the case of failure to file a return under §5504 of this Chapter at the time prescribed for filing, unless such failure is shown to be due to reasonable cause, there shall be added to the amount required to be shown on such return 5% of said amount for each month, or fraction thereof, during which such failure continues, not to exceed 50% in the aggregate.

(c) In the case of the failure to pay the amount shown as tax on a return filed pursuant to §5504 on or before the date prescribed for payment of such tax, unless it is shown that such failure is due to reasonable cause, there shall be added to the amount shown as tax on such return 0.5% for each additional month, or fraction thereof, during which such failure continues, not to exceed 25% in the aggregate. For purposes of
computing the addition for any month, the amount of tax shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the beginning of such month.

(a) If any part of the additional tax determined to be due is due to negligence or intentional disregard of rules or regulations (but without intent to defraud) there shall be added to the tax an amount equal to 10% of the additional tax determined to be due.

(a) If any part of the additional tax determined to be due is due to fraud, there shall be added to the tax 100% of the additional tax determined to be due. This amount shall be in lieu of the amount determined under subsection (d) of this subsection.".

Approved July 10, 1987.