Answer:
Penalty for Failure to Pay = $30
Penalty for Failure to File = $270
Explanation:
given data
income tax return = 90 days
return with remits a check = $2,000
a month = 30 days
solution
we know as per IRS guidelines
penalty for failure to pay is usually half of 1% of the unpaid taxes for each month and penalty for filing late is usually 5% of the unpaid taxes for each month
so penalty for Failure to pay is
Penalty for Failure to Pay = Tax amount × Penalty rate × No of month late .......................1
Penalty for Failure to Pay = $2,000 × (1/2 of 1%) × 3 months
Penalty for Failure to Pay = $2,000 × 0.005 × 3 = $30
and
penalty for Failure to file is as
Penalty for Failure to File = ( Tax amount × Penalty rate × No of month late) - Penalty for failure to pay ....................2
Penalty for Failure to File = ( $2,000 × 5% of 3 months ) - $30
Penalty for Failure to File = ( $2,000 × 0.05 × 3 ) - $30
Penalty for Failure to File = $270
