Question

Sophia filed her 2018 return and paid the taxes on November 1, 2019. She did not have a valid extension of time to file. In which of the following situations would she most likely qualify for a penalty exception

Question 56 of 65. Sofia filed her 2018 return and paid the taxes on November 1, 2019. She did not have a valid extension of time to file. In which of the following situations would she most likely qualify for a penalty exception? Sofia lost her job in March of 2019 and had insufficient funds to pay the taxes due. She got a new job in October of 2019 and filed on November 1, a few days after she received her first paycheck. Sofia was out of town from April 12, 2019 until October 28, 2019 on a temporary assignment for her job. She left her tax records at home and needed to wait until she returned home and had access to these records before she could file. Sofia was in a car accident on March 13, 2019. She remained hospitalized for her injuries until October 23, 2019. Sofia is part of an activist group that believes that federal taxation of income is unconstitutional and that as a "sovereign citizen," she is not subject to an income tax. She delayed filing a return until she was contacted by the IRS. Mark for follow up

Answer 1

Sofia would be more likely to get exemption from tax penalty basis her accident requiring hospitalisation and hence inability to pay taxes on time. IRS could consider waiving the penalty in case of reasons such as illness, death in family, destruction of records due to natural calamities etc.

The other options may not qualify for waiver due to the following:

1. Job loss: IRS would hold the tax payer responsible to set aside money for taxes and may not consider this valid grounds for penalty exemption

2. Out of town: it would be considered taxpayers responsibility to ensure they make the payments on time as tax returns and payments can be done online.

3. Activist group: being part of activist group will not exempt taxpayer from currently applicable rules and regulations.