Question

A taxpayer understated the tax liability by $10,000. The total tax liability was $50,000. No disclosure of the return position was made by the taxpayer; however, the basis for the position is reasonable. How much of an accuracy-related penalty will the taxpayer be assessed?

Answer 1

2,000

Step-by-step explanation:

To calculate how much of an accuracy related penalty the tax payer will be assessed, we use the following method.