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:

Illegal

Forbidden by law or statute, violating legal statutes or rules.

Express Trust

A legal agreement created intentionally by a grantor, designating a trustee to manage assets for the benefit of beneficiaries.

Grantor

An individual or entity that transfers property rights to another person or entity.

Constructive Trusts

Legal arrangements treated by a court as if they are actual trusts, when someone has wrongfully obtained or withheld property that rightfully should belong to another.