An Accuracy-Related Penalty Is Imposed for Underpayment of Taxes Due

question 5

Multiple Choice

An accuracy-related penalty is imposed for underpayment of taxes due to the taxpayer's negligence, according to §6662.T files his 2011 return on April 15, 2012, and two years later the IRS assesses an additional $6,000 of tax attributable to failure to report income.Not counting the interest on both the additional tax and the penalty, how much negligence penalty will T have to pay?

• A)$300
• B)$600
• C)$900
• D)$1,200
• E)$1,500

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Definitions:

Remedies

Legal means for enforcing a right or redressing a wrong; can involve financial compensation or other forms of relief.

Court Action

A legal proceeding in which a case is brought before a court.

Withhold Delivery

The act of not releasing goods or property until certain conditions are met.

Liquidated Damages

are a predetermined amount of money agreed upon in a contract that one party will pay to the other in the event of a breach.