Question

the penalty for failure to file an income tax return on time is: a 10% of the balance due B. waived for balances less than $205 c. only applied when caused by willful neglect d. only applied when there is a balance due

Answer 1

The due date for filing Federal Income Tax return is April 15.

Failure to file an income tax return on time attracts the penal provisions under paragraph 1 of section 6651 under US Code 26.

The provisions under US Code 26 section 6651 states as follows:

In case of failure to file any return on the due date prescribed threof unless it is shown that failure is due to reasonable cause and not due to wilful neglect there shall be added to the amount required to be shown as tax payable on such return 5% of the amount of tax if the failure is not more than 1 month , with an additional 5% for each additional month or fraction threof during which such failure continues, not exceeding 25% in aggregate.

As per the above provision if we have sufficient evidence to prove that such failure occured because of reasonable causes and not due to willful neglect then the penalty does not accrue to us.

So the provisions under US Code 26 section 6651 can be applied only when failure is caused due to willful neglect.

Conclusion : The coorect option is C (only applied when caused by willful neglect)

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