Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Question

Quizplus · Accepted Answer

If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. This is because the late filing penalty is calculated based on the tax owed, so if no tax liability is reported due to the lack of a tax return, the penalty cannot exceed the late filing penalty. Option A is incorrect because an extension only extends the time to file, not the time to pay, so late payment penalties can still apply if the tax is not paid by the original due date. Option B is incorrect because the penalty rate for late payment penalties is generally higher than the penalty rate for late filing penalties.

Which of the Following Statements Regarding Late Filing Penalties And/or