Jennie received a 6-month extension (toOctober 15, 2021)tofile her 2020 tax return. Jennie actually filed the return on November 20, 2021, paying the $20,000 amount due at that time. She has noreasonable cause for failing tofile the return by October 15 or for failing topay the tax that was due on April 15, 2021. How much is the failure-to-pay penalty?

Question

Quizplus · Accepted Answer

The failure-to-pay penalty is 0.5% of the unpaid taxes for each month or part of a month the tax is unpaid, up to a maximum of 25%. Jennie was late by 7 months (from April 15 to November 20), so the penalty is 0.5% * 7 * $20,000 = $700.

Jennie Received a 6-Month Extension (ToOctober 15, 2021)tofile Her 2020