The commissioner is authorized to abate, in whole or in part, any statutory penalty imposed under any revenue laws administered by the commissioner in any case of deficiency tax collection made by the department in connection with an audit conducted by it, if the commissioner determines that the payment by a taxpayer of a tax in an amount less than that due under the applicable laws and rules and regulations relates to a taxable period covered by a timely filed return and is not the result of:

(1) Negligence or intentional disregard of the tax law or rules and regulations; or

Terms Used In Tennessee Code 67-1-802

(2) Fraudulent underpayment of the tax.