Collin's tax liability for last year was $ 24500, and his AGI did not exceed $ 150000. Collin requests an automatic extension for filing his current year individual return but does not pay any additional tax with his extension request. By April 15 of the following year, Collin has paid $ 25,000 of taxes in the form of wage withholding and estimated taxes. Collin files his current year return and pays the balance of the taxes due on May 4 of the following year.

Penalty if Collin's taxis $28,000 if Collin's taxis $27,500

Underpaying estimated tax 0 0

Failure-to-file 0 0

Failure-to-pay tax 30 0

a.	Will Collin owe interest? If so, on what amount and for how many days? Assume that any interest period begins on April 16 of a non-leap year.
b.	Assume the applicable interest rate is 6%. Compute Collin's interest payable if his current year tax is $ 28,000.

a

For Scenario (a) when Collin's current year tax is $28,000:

Collin will owe interest on

$

for

days.

For Scenario (b) when Collin's current year tax is $27,500:

Collin will owe interest on

$

for

days.

b

If Collin's current year tax is $28,000 his interest payable is

$

TABLE -_6.0% COMPOUND RATE Days Factor Factor 0.000164384 0.000328794 0.000493232 0.000657696 0.000822188 0.000986707 0.001151253 0.001315825 0.001480425 0.001645052 0.001809706 0.001974387 0.002139095 0.002303830 0.002468593 0.002633382 0.002798199 0.002963042 0.003127913 0.003292810 0.003457735 0.003622687 0.003787666 0.003952673 0.004117706 0.004282766 0.004447854 0.004612969 0.004778110 0.004943279 0.005108476 0.005273699 0.005438949 0.005604227 0.005769532 0.005934864 0.006100223 0.006265609 52 53 0.008583875 0.008749669 0.008915491 0.009081340 0.009247217 0.009413120 0.009579051 0.009745009 0.009910995 0.010077008 0.010243048 0.010409115 0.010575210 0.010741332 0.010907481 0.011073658 0.011239861 0.011406093 0.011572351 0.011738637 0.011904950 0.012071291 0.012237659 0.012404054 0.012570476 0.012736926 0.012903404 0.013069908 0.013236440 0.013403000 0.013569587 0.013736201 0.013902842 0.014069511 0.014236208 0.014402931 0.014569683 0.014736461 59 60 61 62 10 13 64 15 17 68 19 20 70 23 25 26 27 28 78 80 81 82 83 30 32 37 3 8 8 9 TABLE -_6.0% COMPOUND RATE Days Factor Factor 0.000164384 0.000328794 0.000493232 0.000657696 0.000822188 0.000986707 0.001151253 0.001315825 0.001480425 0.001645052 0.001809706 0.001974387 0.002139095 0.002303830 0.002468593 0.002633382 0.002798199 0.002963042 0.003127913 0.003292810 0.003457735 0.003622687 0.003787666 0.003952673 0.004117706 0.004282766 0.004447854 0.004612969 0.004778110 0.004943279 0.005108476 0.005273699 0.005438949 0.005604227 0.005769532 0.005934864 0.006100223 0.006265609 52 53 0.008583875 0.008749669 0.008915491 0.009081340 0.009247217 0.009413120 0.009579051 0.009745009 0.009910995 0.010077008 0.010243048 0.010409115 0.010575210 0.010741332 0.010907481 0.011073658 0.011239861 0.011406093 0.011572351 0.011738637 0.011904950 0.012071291 0.012237659 0.012404054 0.012570476 0.012736926 0.012903404 0.013069908 0.013236440 0.013403000 0.013569587 0.013736201 0.013902842 0.014069511 0.014236208 0.014402931 0.014569683 0.014736461 59 60 61 62 10 13 64 15 17 68 19 20 70 23 25 26 27 28 78 80 81 82 83 30 32 37 3 8 8 9