In addition to the criminal penalties provided by this chapter, if a taxpayer shall fail to comply with certain provisions of this chapter, then the following penalties and additions to tax shall be applicable:
(1) In the case of a taxpayer's failure to file any return required by any state tax law on or before the date prescribed determined with regard to any extension of time for filing the return, unless it is shown that the failure is due to reasonable cause and not to willful neglect, there shall be added to the amount required to be shown as tax on the return five percent (5%) of the amount of the tax if the failure is not more than one (1) month, with an additional five percent (5%) for each additional month or fraction of a month during which the failure continues, not to exceed thirty-five percent (35%) in the aggregate;
(2)
(A) In case of a failure to pay the amount shown as tax on any return required to be filed under any state tax law, except an individual income tax return, on or before the date prescribed for payment of the tax, unless it is shown that the failure to pay is due to reasonable cause and not to willful neglect, there shall be added to the amount shown as tax on the return five percent (5%) of the amount of the tax if the failure is for not more than one (1) month, with an additional five percent (5%) for each additional month or fraction of a month during which the failure continues, not to exceed thirty-five percent (35%) in the aggregate.
(B) In case of failure to pay the amount shown as tax on any individual income tax return required to be filed, on or before the date prescribed for payment of the tax, unless it is shown that the failure to pay is due to reasonable cause and not to willful neglect, there shall be added to the amount shown as tax on the return one percent (1%) of the amount of the tax if the failure is for not more than one (1) month, with an additional one percent (1%) for each additional month or fraction of a month during which the failure continues, not to exceed thirty-five percent (35%) in the aggregate;
(3)
(A)
(i) If any penalty is assessed under subdivision (1) of this section, then no penalty shall be assessed under subdivision (2)(A) of this section.
(ii) If any penalty is assessed under subdivision (2)(A) of this section, then no penalty shall be assessed under subdivision (1) of this section;
(B) With respect to any individual income tax return, the amount of the addition under subdivision (1) of this section shall be increased by the amount of the addition under subdivision (2)(B) of this section for any month or fraction of a month to which an addition to tax applies under both subdivisions (1) and (2)(B) of this section, not to exceed thirty-five percent (35%) in the aggregate;
(4)
(A) If any part of a deficiency in taxes is determined to be due to negligence or intentional disregard of rules promulgated under the authority of this subchapter or any state tax law, then the Secretary of the Department of Finance and Administration shall add a penalty of ten percent (10%) of the total amount of the deficiency in addition to any interest provided by law.
(B) However, if any penalty is assessed under subdivisions (1)-(3) of this section, then no penalty shall be assessed under subdivision (4)(A) of this section;
(5)
(A) If any part of any deficiency of any state tax required to be shown on a return is determined to be due to fraud, there shall be added to the tax an amount equal to fifty percent (50%) of the deficiency in addition to any interest provided by law.
(B) If any penalty is assessed under subdivision (5)(A) of this section, then no penalty shall be assessed under subdivisions (1)-(4) of this section;
(6)
(A)
(i) If a taxpayer fails to make a declaration of estimated tax and pay on any quarterly due date the equivalent to at least ninety percent (90%) of the amount actually due, there shall be added a penalty of ten percent (10%) per annum to the amount of the underestimate.
(ii) The ten percent (10%) per annum penalty shall be applied on a quarterly basis.
(iii) A taxpayer who has an uneven income may compute the ten percent (10%) penalty on an annualized basis.
(B) The penalty provided in this subdivision (6) for failure to make correct payments of estimated income tax shall not be applied to the following exceptions:
(i) No penalty shall be imposed for a tax year if the tax shown on the return for such tax year is one thousand dollars ($1,000) or less;
(ii) A taxpayer whose income from farming for the income year can reasonably be expected to amount to at least two-thirds (2/3) of the total gross income from all sources for the income year, may file such declaration and pay the estimated tax on or before the fifteenth day of the second month after the close of the income year, or in lieu of filing any declaration, may file an income tax return and pay the tax on or before the fifteenth day of the third month after the close of the income year;
(iii) The penalty provided in this subdivision (6) shall not be applicable when the original amount of estimated tax is the same amount shown to be due by the return of the taxpayer for the preceding income year when such return showing a liability for tax was filed by the taxpayer for the preceding income year of twelve (12) months;
(iv) In lieu of filing the fourth quarter installment, the taxpayer may file an income tax return and pay the tax on or before January 31, or on the last day of the first month after the close of the income year;
(v) No penalty shall be imposed for a tax year if:
(a) The preceding tax year was a tax year of twelve (12) months;
(b) The taxpayer did not have a tax liability for the preceding tax year; and
(c) The taxpayer was a resident of Arkansas throughout the preceding tax year;
(vi) No penalty shall be imposed with respect to any underpayment to the extent that the secretary determines that by reasons of casualty, disaster, or other unusual circumstances the imposition of such penalty would be against equity and good conscience; and
(vii) No penalty shall be imposed with respect to any underestimate or underpayment if the secretary determines that:
(a) In the year for which such estimated payment was required to be made or in the tax year preceding such tax year, the taxpayer:
(1) Retired after having attained sixty-two (62) years of age; or
(2) Became disabled; and
(b) Such underpayment was due to reasonable cause and not to willful neglect;
(7) In addition to any other penalty provided by law, there shall be assessed a penalty of five hundred dollars ($500) if any taxpayer:
(A) Files what purports to be a return, but the purported return does not contain information on which the substantial correctness of the return may be judged, and the conduct is due to a position which is frivolous or an effort to delay or impede the administration of any state tax law;
(B) Files what purports to be a return, but the purported return contains information that on its face indicates that the return is substantially incorrect, and the conduct is due to a position which is frivolous or an effort to delay or impede the administration of any state tax law; or
(C) Asserts or relies upon any grounds in defense or avoidance of a proposed assessment of tax, penalty, or interest, and the conduct is due to a position which is frivolous or an effort to delay or impede the administration of any state tax law;
(8) All penalties or additions to tax and interest imposed by any state tax law are assessable and collectible by the secretary as a part of the tax due and owing; and
(9)
(A) If any person makes payment to the secretary for any taxes, licenses, or fees imposed by any laws of this state by means of a check, draft, order, electronic funds transfer, or any other form of presentment involving the transmission of account information for the payment of money upon any bank, person, firm, or corporation having insufficient funds in or on deposit with the bank, person, firm, or corporation for the payment of the check, draft, order, electronic funds transfer, or any other form of presentment, the secretary may impose a penalty of ten percent (10%) of the face amount of the check, draft, order, electronic funds transfer, or any other form of presentment or twenty dollars ($20.00), whichever is greater, against the maker or drawer of the check, draft, order, electronic funds transfer, or any other form of presentment.
(B) This subdivision (9) shall not apply if the person establishes to the satisfaction of the secretary that he or she tendered the check, draft, order, electronic funds transfer, or any other form of presentment in good faith and with reasonable cause to believe it would be duly paid.