Dakota received a letter from the IRS indicating that his federal income tax was understated by $2,000. His corrected tax is $15,000. If Dakota cannot provide adequate disclosure and a reasonable basis for the understatement, what penalty amount will he have to pay? $100$400$2,000$3,000 Mark for follow up Question 85 of 85. Donavan is self-employed and files a Schedule C (Form 1040), Profit or Loss From Business. He paid three independent contractors more than $600 during 2022 for their services. He failed to provide Form 1099-NEC to them before February 1, 2023, but he did provide the forms before February 28, 2023. What is his penalty for failure to furnish information returns? $50 $110 $150 $580