Identify which of the following statements is true.

Question

Quizplus · Accepted Answer

Individuals having substantial income from sources not subject to regular withholding generally should make quarterly estimated tax payments to the IRS. This is true because individuals who do not have taxes withheld from their income throughout the year, such as self-employed individuals or those with substantial investment income, may be required to make quarterly payments to avoid underpayment penalties. The other statements are false: A) The maximum addition to tax for both failure-to-file and failure-to-pay penalties combined is 5% per month, not 5.5%. B) The failure-to-pay penalty is not waived based on the amount of tax owed for the year.

Identify Which of the Following Statements Is True