Tina Has a Very Complex Tax Return and It Looks

question 40

Short Answer

Tina has a very complex tax return and it looks like she will not be able to file her tax return by its due date. When is her tax return due? What are Tina's options for paying her tax due and filing her tax return this year? What are the consequences if Tina does not file or pay her tax timely? Be specific.
Tina's tax return is due April 15^th. Tina may request an automatic 6-month extension to file her tax return (i.e., until October 15^th). Extensions allow the taxpayer to delay filing a tax return but extend the due date for tax payments. If a taxpayer fails to pay the entire balance of tax owed by the original due date of the tax return, the IRS charges the taxpayer interest on the underpayment from the due date of the return until the taxpayer pays the tax. The interest rate charged depends on taxpayer type (e.g., individual vs. corporation) and varies quarterly with the federal short-term interest rate. The interest rate for tax underpayments for individuals equals the federal short-term rate plus three percentage points. Penalties are also imposed when a taxpayer fails to file a tax return. Also, there is no statute of limitations if Tina fails to file her return.

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Definitions:

Integrative Bargaining

A negotiation strategy in which parties collaborate to find a win-win solution that satisfies the interests of both, often involving creative problem-solving.

Win-Win Solution

A conflict resolution outcome where all parties involved achieve their objectives and feel satisfied with the resolution.

Integrative Bargaining

A negotiation strategy that seeks to find mutually beneficial solutions by addressing the interests and needs of all parties involved, rather than focusing solely on winning or losing.

Acceptable Outcomes

Results or conclusions of actions, negotiations, or processes that are satisfactory to those involved or affected.