4.03.120 Cancellation of penalties and interest.
A. The director may cancel any penalties and/or interest imposed under BCC 4.03.110(A) if the taxpayer shows that its failure to timely file or pay the tax was due to reasonable cause and not willful neglect. Willful neglect is presumed unless the taxpayer shows that it exercised ordinary business care and prudence in making arrangements to file the return and pay the tax but was nevertheless, due to circumstances beyond the taxpayer’s control, unable to file or pay by the due date. The director’s authority to waive or cancel penalties and/or interest under this subsection shall extend to amounts already paid and also includes any disputes currently pending. “Reasonable cause” may include the following and other similar circumstances:
1. The return was filed on time, but was inadvertently mailed to another agency or there was a delay or loss related to the postal service. The director may also cancel interest in this situation.
2. The delinquency was due to written erroneous information given the taxpayer by the department. The director may also cancel interest in this situation.
3. The delinquency was caused by the death or serious illness of the taxpayer or his/her immediate family, or by the illness or death of his/her tax preparer or a member of the tax preparer’s immediate family, prior to the filing date.
4. The delinquency was caused by the unavoidable absence of the taxpayer, prior to the filing date.
5. The delinquency was caused by the destruction, through no fault of the taxpayer, by fire or other casualty of the taxpayer’s place of business or business records.
6. The taxpayer, prior to the time of filing the return, made timely application to the department, in writing, for proper forms and these forms were not furnished in sufficient time to permit the completed return to be filed and the tax paid before the delinquent date.
7. The delinquency was the result of an unforeseen and unintentional circumstance, not immediately known to the taxpayer, caused by the malfeasance or misconduct of the taxpayer’s employee or accountant.
8. The director has reasonably determined that the taxpayer made a good faith effort to comply with the provisions of this chapter.
9. The taxpayer inadvertently failed to file a tax return because of a good faith belief that the taxpayer qualified for the filing exemption in BCC 4.03.040(D).
The director has no authority to cancel any other penalties or to cancel penalties for any other reason except as provided in subsection C of this section.
B. A request for cancellation of penalties and/or interest must be received by the director within 30 days after the date the department mails the notice that the penalties and/or interest are due. The request must be in writing and contain competent proof of all pertinent facts supporting a reasonable cause determination. In all cases the burden of proving the facts rests upon the taxpayer.
C. The director may cancel the penalties in BCC 4.03.110(A) one time if a person:
1. Was not licensed, and filing returns;
2. Was unaware of his/her responsibility to file and pay tax; and
3. Obtained business licenses and filed past due tax returns within 30 days after being notified by the department.
D. The director shall not cancel any interest charged upon amounts due, except under subsections (A)(1) and (A)(2) of this section. (Ord. 5781 § 8, 2007; Ord. 5605 § 5, 2005; Ord. 5558 § 5, 2004; Ord. 5436 § 1, 2003.)