The IRS Determined That Ernie Bledsoe Underpaid His 2017 Income

question 86

Multiple Choice

The IRS determined that Ernie Bledsoe underpaid his 2017 income tax by $11,200.Ernie's Form 1040 for that year reported an income tax liability of $31,800,so his correct 2017 income tax was $43,000 ($11,200 deficiency + $31,800 reported tax) .Compute Ernie's penalty for a substantial understatement of income tax.

• A)$0
• B)$1,240
• C)$1,380
• D)$2,240

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