Neb. Admin. Code § 316-21-016 — Penalties for Failure to Withhold and Remit Income Taxes, File Returns, or File Federal Form W-2

016.01 Any employer who fails to file any income tax withholding return by the required due date is subject to a penalty of 5% of the amount required to be shown on the return for each month or portion of a month the return is late, up to 25%, or $25, whichever is greater. 016.01A Penalties assessed under Reg-21-016.01 are due and payable at the time the assessment is final. If the amounts due are not paid when final, an additional penalty of 10% of the total amount due, excluding interest and other penalties, will be added to the amount due. 016.01B The penalty may be abated if the employer can show that there was a reasonable cause for the late filing and that it was not the result of willful neglect. 016.01C For purposes of determining the amount of the penalty, the amount shown on the return is reduced by the amount paid prior to the due date and any credit properly claimed on the return. 016.02 If an employer withholds income tax from employees' wages but fails to file a Form 941N and remit the amount withheld, the employer is liable for those taxes and interest at the rate specified in Neb. Rev. Stat. § 45-104.02 from the due date of the return until the date payment is received. In addition, the employer is liable for a penalty of 5% of the amount unpaid. If the penalty is not paid within 10 days of the notice and demand for payment, interest also applies to the amount of the penalty. 016.03 If the employer fails to withhold the proper amount of income tax withholding as required under the Nebraska Revenue Act interest will be imposed at the rate specified in Neb. Rev. Stat. § 45-104.02, on the amount which should have been withheld and paid. The employer is also subject to a 5% penalty on the amount which should have been withheld and paid to the Department. 016.04 If the nonpayment of income tax withholding to the Department is a result of fraud by the employer, the amount of penalty is 50% of the unpaid amount instead of 5%. 016.05 If the employer willfully fails to collect the proper amount of income tax withholding, account for and pay over the proper amount of income tax withholding, or willfully attempts to evade or defeat the income tax withholding obligation, the penalty is 100% of the amount evaded, not collected, or not accounted for and paid, instead of 5% or 50%. 016.06 If it can be determined that the employer acted with fraudulent intent, the Department may assess an additional penalty of up to $1,000. 016.07 In situations described by Reg-21-016.04 through Reg-21-016.06, the employer is subject to interest at the rate specified in Neb. Rev. Stat. § 45-104.02, on the amount due and on any penalty not paid within 10 days of notice and demand for payment. 016.08 A penalty of $500 for each occurrence may be assessed if any person, for frivolous or groundless reasons, or with intent to delay or impede the administration of the Nebraska income tax: 016.08A Fails to file a return or to pay any income tax due; or 016.08B Files what purports to be a return that does not contain sufficient information to calculate the liability or indicates that the self-assessed liability is substantially incorrect. 016.08C This penalty is in addition to any other penalties that may be imposed. 016.09 If any employer fails to file the state copy of Federal Form W-2 with the Department, or fails to provide the statement of income tax withholding to the payee, on or before the due date, or on or before the due date resulting from an extension, the employer is subject to a penalty of $2 for each statement not filed. If the employer can prove that the failure to properly file was the result of a reasonable cause and not negligence, the Department will not assess this penalty. The maximum penalty assessable under this regulation on any one employer during any calendar year is $2,000. 016.10 If any employer employing 25 or more employees fails to either: (a) withhold at least one and one-half percent of the wages of any employee; or (b) obtain satisfactory evidence from the employee justifying a lower withholding amount as required by Neb. Rev. Stat. § 77-2753(1)(b), the employer may be assessed a penalty of not more than $1,000 per violation. 016.11 If any nonresident individual provides false information to an employer or payor regarding wages subject to Nebraska income tax withholding, which resulted or would result in the amount of income tax withholding being less than 75% of the correct amount, or if any employer knowingly uses this false information, the employer or individual may be assessed a penalty equal to the total amount of income tax withholding evaded and $1,000. 016.12 Willful failure to keep, retain, or make available any records as required under this regulation is a Class II misdemeanor. If records are destroyed in a natural disaster, the failure to retain those records is not considered willful. 016.13 Criminal Penalties 016.13A Any taxpayer, with intent to evade or defeat the Nebraska income tax, who claims an excessive number of exemptions is guilty of a Class II misdemeanor. 016.13B Any person who willfully attempts in any manner to evade the Nebraska income tax is guilty of a Class IV felony, in addition to any other penalties. 016.13C Any person required to withhold, deduct, and truthfully account for and pay over any income tax withholding who willfully fails to withhold, deduct, or truthfully account for and pay over is guilty of a Class IV felony, in addition to other penalties. 016.13D Any person who willfully makes and signs any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and who does not believe the return, statement, or document to be true and correct as to every material matter, is guilty of a Class IV felony. 016.13E Any person who willfully aids or procures the preparation or presentation of a return, affidavit, claim, or other document, which is fraudulent or which is false as to any material matter, is guilty of a Class IV felony. 016.13F Statute of Limitations. The statute of limitations for criminal prosecution for the offenses in this section is four years after the commission of the offense except that any violation of Reg-21-016.12A or C is three years after the commission of the offense. (Neb. Rev. Stat. §§ 77-2757, 77-2758, 77-2788, 77-2789, 77-2790, 77-27,113, 77-27,114 and 77-27,116. October 26, 2014.)