Question

  Income Tax

Basic Tax Essentials: Penalties & Amended Returns (2017)

1*Mitchell waited until July 5, 2017, to file his 2016 Form 1040A return. He did request an extension and paid 90% of the anticipated balance due on April 18, 2017. His remaining balance due on his 2016 return is $88. What is his failure to file penalty?

a)$205

b)$88

c)0

2*Joseline waited until December 12, 2017, to file her 2016 Form 1040A return. She did not request an extension. Her balance due for 2016 is $461. Without regard to inflation, what is her failure to file penalty?

a)$205

b)$207

c)$461

3*While spring cleaning, Ramon found an entire box of unreported receipts for his sole proprietor business. Ramon wants to amend his return to claim these business deductions. Which form(s) and/or schedule(s) does he need to send to the IRS to amend the return?

a)Form 1040X

b)Form 1040X and Schedule C

c)Form 1040X, Schedule C, and a copy of each receipt left off the original return

4*Which of the following situations is NOT a reason to file an amended return? Assume the taxpayer is within the appropriate statute of limitations for filing an amended return.

a)The taxpayer wants to report income they forgot to include on their original return.

b)The taxpayer's marriage has been annulled, and they already filed a joint return for the year they were married.

c)The taxpayer received an IRS notice, which is correct, and they want to pay the balance.

5*Which of the following situations could prevent Elaine from receiving a refund for which she was otherwise entitled?

a)Filing a return for a closed year (a tax year for which the statute of limitations has expired).

b)Amending a tax return two years after the tax was paid.

c)Filing a return for an open year (a tax year for which the statute of limitations has not yet expired).

6*Harold filed his 2015 return on June 21, 2016. He did not have a valid extension. Under ordinary circumstances, what is the last day he can file an amended 2015 return?

a)June 21, 2018.

b)April 15, 2019.  

c)June 21, 2019.

7*Karen timely filed her 2014 return on April 15, 2015. Under ordinary circumstances, what is the last day she can file an amended 2014 return?

a)October 16, 2017.

b)April 17, 2018

c)October 15, 2018.

8*Jose could not find his log book that proved his vehicle expenses for 2015. Therefore, he did not deduct this expense on his timely-filed 2015 return. What is the latest date he can file an amended return to obtain a refund of taxes paid on his 2015 return? a)April 18, 2017. b)April 17, 2018 c)April 15, 2019. 9*Adam filed his 2015 return on March 20, 2016. On June 15, 2016, he filed an amendment to change his filing status from single to head of household (HOH). Adam's qualifying child for HOH is not a dependent claimed on his original return. What is Adam required to do on his Form 1040X? a)Enter the child's name and "QND" in Part III. b)Change his filing status to single c)Enter the failure to file penalty on Form 1040X, line 10.

Answer 1

Ans-1: )

C.) $ 0

According to the U.S tax code prescribed by the IRS, If the assessee or tax payer has requested an extension for the time to file his/ her income tax return before/ until the tax due date and he/ she has paid at least 90 percent of the taxes owed by him, then he may not have to pay a “failure-to-pay” penalty to the tax authorities, However, he/ she must pay the balance amount of the taxes owed, by the extended due date provided to him by the authorities, otherwise he/ she will have to pay interest on any taxes paid after the due date.

Thus keeping the above provision in mind, as Mitchell has requested a timely extension and has paid 90% of the anticipated balance by the due date, he will not have to pay a “failure-to-pay” penalty to the tax authorities.