Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.
Section 1 of PL 17-83 states:
Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:
§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.
PL 17-83 was signed into law by Vice President Alik L. Alik on April 19, 2013.
SUBCHAPTER X
Interest and Administrative Remedies
[FOR REFEREENCE ONLY]
SECTIONS
§ 865. Late payment interest.
§ 866. Penalty for failure to file a tax return or lodge other document.
§ 867. Penalty for failure to pay tax by due date.
§ 868. Penalty for failure to maintain proper records.
§ 869. Penalty for making false or misleading statement.
§ 870. Collection of penalty.
Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.
Section 1 of PL 17-83 states:
Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:
§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.
Section 58 of PL 17-50 added a subchapter X of chapter 8 entitled Interest and Administrative Penalties.
(1) A person who fails to pay any tax due on or before the due date for payment is liable for late payment interest at the rate of six percent per annum on the amount unpaid calculated from the date the payment was due to the date the payment is made.
(2) Late payment interest paid by a person under subsection (1) of this section must be refunded to the person to the extent that the principal amount to which the interest relates is found not to have been payable.
(3) Late payment interest payable by a person is borne personally by the person and is not recoverable from any other person:
(a) in respect of tax withheld by the person under chapter 1 or 5 of this title from a payment made by the person; or
(b) in respect of an amount referred to in sections 826(7), 827(14), or 851(8) of this title payable by the person.
(4) Late payment interest payable under this section is simple interest.
(5) Late payment interest payable under this section is treated as tax payable by a taxpayer for the purposes of subchapter V of this chapter and section 851 of this title.
(6) Late payment interest payable under this section is in addition to any penalty imposed under this subchapter or any fine or imprisonment imposed under subchapter XI of this chapter in respect of the same act or omission.
Source: PL 17-50 § 59.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 891 to 865 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) A person who fails to file a tax return or lodge any other document as required under any revenue law is liable:
(a) in the case of a failure to file a tax return under which tax is payable, for a penalty of one percent (1%) of the amount of tax payable under the return for each month or part of a month that the return remains unfiled; or
(b) in any other case, for a penalty of ten dollars ($10) for each day of default.
(2) A taxpayer served with a notice of assessment by the CEO under section 811 of this title is liable for a penalty of twenty five percent (25%) of the tax assessed (taking into account any subsequent amendment of the assessment) in addition to the penalty imposed under subsection (1)(a) of this section.
(3) For the purposes of subsection (1)(b) of this section, a person ceases to be in default at the time the document is received by the CEO.
Source: PL 17-50 § 60.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 892 to 866 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) A taxpayer who fails to pay a tax when due is liable for a penalty equal to 10 percent of the amount of tax due for each month, or part of a month, that the tax remains unpaid subject to a maximum penalty of 100 percent of the unpaid tax.
(2) The penalty imposed under subsection (1) of this section is in addition to interest payable under section 865 of this title for late payment of tax. The ceiling on the amount of penalty payable under subsection (1) of this section does not apply to or take into account interest payable under section 865 of this title.
(3) The reference to “tax” in subsection (1) of this section does not include penalty.
Source: PL 17-50 § 61.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 893 to 867 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) A taxpayer who fails to maintain accounts, documents, or records as required under a revenue law is liable:
(a) if the failure was knowingly or recklessly made, for a penalty equal to 50 percent of the amount of tax payable by the taxpayer for the tax period to which the failure relates; or
(b) in any other case, for a penalty equal to ten percent of the amount of tax payable by the taxpayer for the tax period to which the failure relates.
(2) [Reserved].
Source: PL 17-50 § 62.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 894 to 868 to allow all of the sections in this chapter to have eight hundred section numbers.
(a) who makes a statement to a revenue officer that is false or misleading in a material particular or omits from a statement made to a revenue officer any matter or thing without which the statement is false or misleading in a material particular; and
(b) whose statement results in the tax liability of any person computed on the basis of the statement being less than it would have been if the statement had not been false or misleading (the difference being referred to as the “tax shortfall”).
(2) Subject to subsection (3) of this section, a person to whom this section applies is liable:
(a) if the statement or omission was made knowingly or recklessly, for a penalty equal to 50 percent (50%) of the tax shortfall; or
(b) in any other case, for a penalty equal to ten percent (10%) of the tax shortfall.
(3) No penalty is payable under subsection (2) of this section if:
(a) the person who made the statement did not know and could not reasonably be expected to know that the statement was false or misleading in a material particular; or
(b) the tax shortfall arose as a result of a self-assessment taxpayer taking a reasonably arguable position on the application of a revenue law to the taxpayer’s circumstances in filing a self-assessment return.
(4) Nothing in subsection (3) of this section prevents the imposition of late payment interest under section 865 of this title in respect of a tax shortfall if the tax is not paid by the due date.
(5) A reference in this section to a statement made to a revenue officer means a statement made in writing or orally to a revenue officer acting in the performance of the officer’s duties under a revenue law, and includes a statement made:
(a) in any application, certificate, declaration, notification, tax return, objection, or other document furnished or lodged under a revenue law;
(b) in any information required to be furnished under a revenue law;
(c) in any document furnished to a revenue officer;
(d) in answer to a question asked of a person by a revenue officer; or
(e) to another person with the knowledge or reasonable expectation that the statement would be passed on to a revenue officer.
Source: PL 17-50 § 63.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 895 to 869 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) A liability for penalty is calculated separately with respect to each section imposing a penalty under this subchapter.
(2) If a penalty has been paid under this title and the CEO institutes a prosecution under subchapter XI of this chapter in respect of the same act or omission, the CEO must refund the amount of the penalty paid, and no penalty is payable unless the prosecution is withdrawn.
(3) The CEO must:
(a) make an assessment of penalty imposed under this subchapter; and
(b) serve a notice of the assessment on the person subject to the penalty, which notice must state the amount of penalty payable and the due date for payment.
(4) A person liable to pay a penalty may apply, in writing, to the CEO for remission of the penalty payable.
(5) The CEO may, upon application under subsection (4) of this section or on the CEO’s own motion, remit, in whole or in part, any penalty payable by a person.
Source: PL 17-50 § 64.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 896 to 870 to allow all of the sections in this chapter to have eight hundred section numbers.