Question

answer question 19-55

19-55 Penalties. Compute the penalties in the following situations: a. Taxpayer A files a 2018 income tax return on April 15, 2019, showing a tax liability of $10,000 and a balance due of $1,000. A does not pay the $1,000 until June 30, 2019. b. Same as (a) except A does not pay the $1,000 balance due until April 1, 2022. c. Taxpayer B filed no 2018 income tax return until July 31, 2019. The return shows a tax liability of $5,000 with a balance due of $100. B pays the $100 on April 15, 2019, without the return. d. Same as (c) except B does not pay the balance due until the return is filed. e. Taxpayer C files a 2018 income tax return on April 1, 2019, negligently report- ing $1,000 less than C's actual tax liability. f. Taxpayer D files a 2018 income tax return on April 15, 2019, that fraudulently ranorte $500 less than D's actual tax liability.

Answer 1

a) If you file your taxes but don’t pay them, the IRS can charge you a failure-to-pay penalty. The penalty is far less: Generally, the IRS will charge you 0.5% of your unpaid taxes for each month you don’t pay, up to 25% tax due

april, may, june 3months delay, $1000*0.5%*3months is $15

b) If you file your taxes but don’t pay them, the IRS can charge you a failure-to-pay penalty. The penalty is far less: Generally, the IRS will charge you 0.5% of your unpaid taxes for each month you don’t pay, up to 25% tax due

12months delay, penalty will be $1000*0.5%*12m = $65, however penalty shall not exceed 25% of tax due so penalty payable will be $25

c) The penalty for filing late is steeper. As with the failure-to-pay penalty, it applies to any portion of your tax that remains unpaid as of the filing date, usually April 15 each year unless that date falls on a weekend or holiday. The penalty is 5% for each month or part of a month that your tax return is late, again with a maximum penalty of 25% .

If you fail to file within 60 days of the due date or your extended due date if you filed for an extension, you'll pay at least $210 as of 2019, or a penalty equal to 100 percent of the tax you owe, whichever is less.