When a taxpayer is subject to both underpayment and overpayment computations for the same time period, which of the following rates of interest applies to the net amount payable to or receivable from the government?
A)4%
B)6%
C)0%
D)5%

Question

Quizplus · Accepted Answer

If a taxpayer is subject to both underpayment and overpayment computations for the same time period, the interest rate for both is the same. However, if the net result is an overpayment, no interest is paid to the taxpayer. Therefore, the rate of interest applicable to the net amount payable to or receivable from the government is 0%.

When a Taxpayer Is Subject to Both Underpayment and Overpayment