Penalty for minor breaches is constrained; penalties must be proportionate, specified, and preceded by opportunity to be heard. No officer shall impose penalties for minor breaches consisting of easily rectifiable documentation errors made without fraudulent intent or gross negligence; such breaches include errors apparent on the face of record and those involving tax below the specified threshold. Penalties must be commensurate with the facts and severity, imposed only after an opportunity to be heard, and must state the nature of the breach and applicable provision. Voluntary pre-discovery disclosure may mitigate penalty; the section excludes penalties that are fixed sums or fixed percentages.