💰 CPA Exam Prep

Tax penalties for failure to file are:

A Less than failure to pay
B Generally more severe than failure to pay (5%/month vs. 0.5%/month)
C Non-existent
D The same as failure to pay

✓ Correct Answer: Option B

Failure to file: 5% per month (max 25%). Failure to pay: 0.5% per month (max 25%). Filing late is penalized more heavily.

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