Kate files her tax return 36 days after the due date.When she files the return,she sends a check for $2,000 which is the balance of the tax owed by her.Kate's penalty for failure to file a return will be
A)0)5% per month (or factor thereof)up to a maximum of 25%.
B)5% per month (or factor thereof)up to a maximum of 25%.
C)20% per month (or factor thereof).
D)25%.

Question

Quizplus · Accepted Answer

According to the IRS, the penalty for failure to file a tax return is 5% of the unpaid taxes for each month (or part of a month) that a return is late, up to a maximum of 25%. Since Kate filed her return 36 days after the due date, she is subject to a penalty of 5% for one month of lateness. The fact that she paid the balance of the tax owed does not eliminate the penalty for late filing.

Kate Files Her Tax Return 36 Days After the Due