Question

Geoff underpaid his taxes in the amount of 2,500, of whicH₂,000 is attributable to negligence. Geoff's negligence penalty is:

1) $400.
2) $500.
3) $2,500.
4) $100.
5) $2,000.

Answer 1

The correct option is 1). Geoff's negligence penalty for underpaying his taxes, with $2,000 attributable to negligence, would likely be $400, assuming a 20% penalty rate for negligence.

Step-by-step explanation:

The question relates to calculating the negligence penalty for underpaying taxes. If Geoff underpaid his taxes by $2,500 and $2,000 of that amount was due to negligence, then the penalty would typically be a percentage of the underpaid amount due to negligence. Tax penalties for negligence often range from 20% to 40%, depending on the law and regulations applicable to Geoff's tax jurisdiction. Assuming a negligence penalty rate of 20%, the penalty on the $2,000 attributable to negligence would be $400 (which is 20% of $2,000).