Peter forgot to file his tax return by April 15.He did not file an extension.Peter finally filed his tax return on July 31 and had a remaining tax liability of $3,500.What is Peter's failure to file penalty? Assume he made all his payments on time.
A)$525.
B)$875.
C)$700.
D)$350.

Question

Quizplus · Accepted Answer

The failure to file penalty is typically 5% of the unpaid taxes for each month the return is late, up to a maximum of 25%. Since Peter filed his return three months late, the penalty would be 15% of his tax liability ($3,500 x 0.15 = $525). Therefore, the correct answer is choice C.

Peter Forgot to File His Tax Return by April 15