Final Answer:
$400
Step-by-step explanation:
Geoff's negligence penalty is calculated based on the amount of underpaid taxes attributable to negligence.
In this case, the negligence amount is $2,000. The IRS imposes a negligence penalty, which is 20% of the underpaid tax due to negligence.
Therefore, Geoff's negligence penalty is calculated as 20% of $2,000, resulting in a penalty of $400.
The negligence penalty is a consequence of failing to exercise reasonable care in fulfilling tax obligations.
The Internal Revenue Service (IRS) imposes this penalty to discourage taxpayers from neglecting their responsibilities and to ensure compliance with tax regulations.
In Geoff's scenario, the $400 penalty reflects the financial consequence of his negligence in accurately reporting and paying taxes.
It's essential for taxpayers to be aware of the implications of negligence penalties and to take proactive measures to avoid them, such as seeking professional assistance or ensuring accurate record-keeping.
Understanding the calculation of such penalties is crucial for taxpayers to navigate the tax system and fulfill their obligations accurately, minimizing the risk of financial penalties and legal consequences.