Question

David files his tax return 45 days after the due date. Along with the return, David remits a check for $40,000. which is the balance of the tax owed. Disregarding the interest element, David's total failure to file and to pay penalties are:

Answer 1

Answer:

total failure to file and to pay penalties are $4000

Explanation:

numbers of days after which David files return = 45 days

ACCORDING TO THE RULE,

5% per month penalty is imposed on delay payment

the total number of delay days is 45 days which is equivalent to 2 months fully as 45 days is considered in the second month period.

total penalties that have to be paid is calculated as

$= 40,000 \times 0.05 \times 2$

= $4000