May 29, 1996

DEPARTMENT OF TAXATION ANNOUNCEMENT

RE: Letters Assessing Penalty for Underpayment of Estimated Income Tax
The Department of Taxation mailed to numerous taxpayers computer-generated letters assessing a penalty for underpaying estimated net income tax. These letters can be identified by the "Form CNIT-15L" designation on the bottom of the page.

Some taxpayers have received these letters by mistake although:

  1. The taxpayer's tax payments, including withholding, equaled or exceeded 100% of the taxpayer's 1994 tax liability; or
  2. Form N-210 (Underpayment of Estimated Tax by Individuals and Fiduciaries) or Form N-220 (Underpayment of Estimated Tax by Corporations and S Corporations) was attached to the 1995 return.
If situation (1) above applies, it is sufficient for a taxpayer or preparer to write "Exception for 100% of prior year liability applies" and send the letter back to us at the address written on the letter. Form N-210 or N-220 need not be filed.

If situation (2) above applies, it is sufficient for a taxpayer or preparer to write "Form N-210 (or N-220) attached to 1995 return" and send the letter back to us at the address written on the letter.

The Department has reprogrammed its computer system so that such letters should not be generated in the future. We regret any inconvenience caused by the issuance of these letters.

/s/
RAY K. KAMIKAWA
Director of Taxation