The IRS Determined That Ernie Bledsoe Underpaid His 2017 Income

The IRS determined that Ernie Bledsoe underpaid his 2017 income tax by $11,200.Ernie's Form 1040 for that year reported an income tax liability of $31,800,so his correct 2017 income tax was $43,000 ($11,200 deficiency + $31,800 reported tax) .Compute Ernie's penalty for a substantial understatement of income tax.

A) $0
B) $1,240
C) $1,380
D) $2,240

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free