Shortfall penalties – reductions and other matters

This interpretation statement is relevant where the Commissioner imposes a shortfall penalty for not taking reasonable care (s 141A), an unacceptable tax position (s 141B), gross carelessness (s 141C), an abusive tax position (s 141D), or evasion or similar act (s 141E). 

It discusses when a shortfall penalty is reduced (or increased), what happens when a taxpayer could be liable for more than one penalty and the assessment, payment and disputing of shortfall penalties.

There is separate guidance on the threshold requirements for a shortfall penalty (that there be a “tax position” and a “tax shortfall”) and the shortfall penalties provided in s 141A, 141B, 141C, 141D and s 141E of the Tax Administration Act 1994.