{"data":{"id":"us-dc/d.c.-code-47-4211","jurisdiction":"us-dc","citation":"D.C. Code § 47-4211","heading":"Imposition of accuracy-related penalty.","body":"(a)\nFor purposes of this section, the term:\n(1)\n“Negligence” means a failure to make a reasonable attempt to comply with the provisions of this title or to exercise ordinary and reasonable care in the preparation of a tax return without the intent to defraud. A position with respect to an item is attributable to negligence if it lacks a reasonable basis. Negligence is indicated where:\n(A)\nThe taxpayer fails to include on an income tax return an amount of income shown on an information return;\n(B)\nThe taxpayer fails to make a reasonable attempt to ascertain the correctness of a deduction, credit, or exclusion on a return; or\n(C)\nThe taxpayer fails to keep adequate books and records or to substantiate items properly.\n(2)\n“Gross valuation misstatement” means the reporting on any return for a tax imposed by this title of the value of a property or the adjusted basis of a property which is greater than or equal to 400%, or less than or equal to 25%, of the amount determined to be the correct amount of the valuation or adjusted basis.\n(3)\n(A)\n“Substantial understatement of income tax” means, for a taxable year, an understatement made by taxpayer in filing an individual or estate tax return if the amount of the understatement for the taxable year exceeds the greater of:\n(i)\nTen percent of the tax required to be shown on the return for the taxable year; or\n(ii)\n$2,000.\n(B)\nIn the case of a taxpayer other than an individual or estate, subparagraph (A) of this paragraph shall be applied by substituting “$4,000” for “$2,000”.\n(C)\n(i)\nFor purposes of this section, the term “understatement” means the excess of the amount of tax required to be shown on a return less the tax shown on the return.\n(ii)\nThe amount of the understatement under sub-subparagraph (i) of this paragraph shall be reduced by the portion of the understatement which is attributable to:\n(I)\nThe tax treatment of an item by the taxpayer if there is or was substantial authority for the treatment; or\n(II)\nAn item if:\n(aa)\nThe relevant facts affecting the item’s tax treatment are adequately disclosed in a statement attached to the return; and\n(bb)\nThere is a reasonable basis for the tax treatment of the item by the taxpayer.\n(4)\n“Substantial valuation misstatement” means the reporting on any return for a tax imposed by this title of the value of a property or the adjusted basis of a property which is greater than or equal to 200%, or less than or equal to 50%, of the amount determined to be the correct amount of the valuation or adjusted basis.\n\n(b)\n(1)\nThere shall be added to a tax imposed by this title an amount equal to 20% of the portion of an underpayment which is attributable to one or more of the following:\n(A)\nNegligence;\n(B)\nA substantial understatement of income tax; or\n(C)\nA substantial valuation misstatement.\n(2)\nThere shall be added to the tax imposed by this title an amount equal to 40% of the portion of an underpayment which is attributable to a gross valuation misstatement.\n\n(c)\n(1)\nSubsection (b) of this section shall not apply to the portion of an underpayment on which a penalty is imposed under § 47-4212.\n(2)\nNo penalty shall be imposed under subsection (b) of this section by reason of a substantial valuation misstatement or a gross valuation misstatement unless the portion of the underpayment for the taxable year attributable to the substantial valuation misstatement exceeds $5,000 ($10,000 in the case of a corporation).","path":["Title 47. Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title]","Chapter 42. Interest and Penalties.","Subchapter II. Penalties."],"source_url":"https://code.dccouncil.gov/us/dc/council/code/sections/47-4211","current_through":"2026-08-20 (D.C. Law 26-175)","vintage":"","retrieved_at":"2026-08-29T05:44:07Z","sha256":"743488c2b3ad43047084b52327646cab684a44c3dfdc556722a6751d6c8f4328","source_id":"us-dc","stale":false,"prev":"us-dc/d.c.-code-47-4204","next":"us-dc/d.c.-code-47-4212"},"notice":"GroundRules: Original legal text. Not legal advice."}