Section 19174 Of Article 7. Penalties And Additions To Tax From California Revenue And Taxation Code >> Division 2. >> Part 10.2. >> Chapter 4. >> Article 7.

. (a) Any person who has a duty to file returns under Section 18648 and fails to keep the records required by subdivision (d) of Section 18648 shall pay a penalty for each calendar year for which there is any failure to keep those records, unless it is shown that the failure is due to reasonable cause.
  (b) The penalty for any person for any calendar year shall be one thousand dollars ($1,000), multiplied by the number of investors with respect to whom that failure occurs in the calendar year reporting period. If the number of investors cannot be determined by the Franchise Tax Board, the amount determined under this subdivision for any calendar year reporting period shall be one hundred thousand dollars ($100,000).
  (c) The penalty under this section shall be assessed against the person required to file a return under Section 18648.
  (d) Article 3 (commencing with Section 19031) of this chapter (relating to deficiency assessments) shall not apply with respect to the assessment or collection of any penalty imposed by subdivision (a).