An accuracy-related penalty is imposed for underpayment of taxes due to the taxpayer's negligence, according to §6662.T files his 2011 return on April 15, 2012, and two years later the IRS assesses an additional $6,000 of tax attributable to failure to report income.Not counting the interest on both the additional tax and the penalty, how much negligence penalty will T have to pay?
A)$300
B)$600
C)$900
D)$1,200
E)$1,500

Question

Quizplus · Accepted Answer

The negligence penalty is 20% of the underpayment. The underpayment is $6,000, so the negligence penalty is $6,000 x 20% = $1,200.

An Accuracy-Related Penalty Is Imposed for Underpayment of Taxes Due