Question

Determine the amount of the late filing and late payment penalties that apply for the following taxpayers.

a. Jolene filed her tax return by its original due date but did not pay the $1,200 in taxes she owed with the return until one and a half months later.

b. Oscar filed his tax return and paid his $2,200 tax liability seven months late.

c. Wilfred, attempting to evade his taxes, did not file a tax return or pay his $8,200 in taxes for several years.

Answer 1

The IRS imposes a failure-to-pay penalty of 0.5% for each month or part of a month that the tax goes unpaid, but it can't exceed 25% of the total tax you owe.

there fore

a. jolene did not pay her taxx amount till one and half month:

$1200 X 0.5% X for 2 months= $6

b. Oscar did not pay his taxes till 7 months therefore he have to pay panelty for 7 months @0.5%

$2200 X0.5% X 7 MONTHS = $77

C. As in case of Wilfred, he tried to evade his tax liability and did not filed his tax return, therefore he have to pay a minimum of 22.5% of his tax liability for late filing and 25% for late payment of tax.