The IRS can impose a ________ penalty on the tax due on a return where there is negligence.
A)5%
B)75%
C)20%
D)25%

Question

Quizplus · Accepted Answer

If the IRS determines that there has been negligence or disregard of tax rules or regulations, they can impose an accuracy-related penalty of 20% of the underpayment of tax due. This penalty can be imposed in addition to interest charges on the unpaid balance. The penalty can be increased to 40% if the underpayment is due to a gross misstatement of income or valuation of property. Therefore, the correct option is C) 20%.

The IRS Can Impose a ________ Penalty on the Tax