Which of the Following Statements Regarding Late Filing Penalties And/or

question 134

Multiple Choice

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

• A)An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return.
• B)The penalty rate for late filing penalties is less than the penalty rate for late payment penalties.
• C)If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself.
• D)None of the choices are correct.

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Definitions:

Excess Reserves

These are bank reserves held in excess of what is required by regulations, which can be lent out to generate income.

New Loans

Financial amounts borrowed by individuals, businesses, or governments, typically from banks or financial institutions, that have not previously existed in the market.

Required Reserve Ratio

The fraction of deposits that banks are mandated by the central bank to keep on hand as reserves, rather than loaning out.

Total Reserves

The sum of a bank's deposits held at the central bank and the cash held in vaults.