Adam, a self-employed taxpayer, did not have all the information he needed to timely file his 2019 tax return by July 15, 2020. Although he requested an automatic extension, he did not include a payment when he filed the extension. He finally filed his return on August 21, 2020, reporting a $900 balance due. How much must he pay in failure-to-file and failure-to-pay penalties?

A) No failure-to-file penalty or failure-to-pay penalty will apply.

B) His failure-to-file penalty is $0, but he has a failure-to-pay penalty of 0.5% of his unpaid tax.

C) His failure-to-file penalty is 5% of his unpaid tax. He also has a failure-to-pay penalty of 0.5%, for an overall total of 5.5%.

D) He has a $435 failure-to-file penalty plus an additional penalty of 0.5%, applied to his unpaid tax.