Question

Linda underpaid her taxes for the current year by $4,000 due to negligence. a. Calculate Linda's accuracy-related penalty for negligence. $ b. Assume that the underpayment of taxes by Linda was determined to be fraudulent, and calculate the total amount of Linda's fraud penalty.

Answer 1

Answer:

a. Linda's accuracy-related penalty for negligence is $ 800.

b. The total amount of Linda's fraud penalty is $3000.

Explanation:

a. Penalty for the negligence of Linda

= $4,000*20%

= $800

Therefore, Linda's accuracy-related penalty for negligence is $ 800.

b.  Penalty for fraud of Linda

= $4000*75%  

= $3000

Therefore, The total amount of Linda's fraud penalty is $3000.