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What Is the Underpayment Penalty Rate That Taxpayers Pay When

Question 132

Multiple Choice

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?


A) Zero. The government does not pay interest on overpayments.
B) Federal short-term interest rate.
C) Federal long-term interest rate plus six percentage points.
D) Federal short-term interest rate plus three percentage points.

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