Joanne filed her unextended 2020 tax return on September 14, 2021, paying the $5,000 amount due at that time. Joanne has noreasonable cause for failing tofile the return by April 15 or for failing topay the tax that was due on April 15, 2021. Compute the failure-to-pay penalty.

Question

Quizplus · Accepted Answer

The failure-to-pay penalty is 0.5% of the unpaid tax per month, up to a maximum of 25%. Joanne was late by 5 months (April to September), so the penalty is 0.5% x 5 months x $5,000 = $125.

Joanne Filed Her Unextended 2020 Tax Return on September 14