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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?

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


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

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