Fill in the blanks with the correct amounts and calculate penalties as indicated.

CIVIL PENALTIES

PENALTY	DESCRIPTION	CALCULATE IT
Failure to File a Tax Return	____% of tax due per month (or fraction of month), ____% max (or 5 months) If due to fraud, increase to ___ % per month, ___ % max Minimum penalty if not filed within 60 days of due date is lesser of _____ or 100% or tax shown on return	Jim receives a 6-month extension until October 15th to file his tax return. He actually files the tax return on October 20th, paying the $20,000 amount due at that time. Calculate his failure to file penalty.
Failure to Pay Tax	____% of tax due per month (or fraction of month), ___ % max (or 50 months) ____% after Notice and Demand Reduces Failure to File where both apply Does not apply if tax due when return is filed does not exceed ____ % of total tax owed.	See above and calculate failure to pay penalty.
Accuracy Related Penalty - Negligence	____ % of the underpayment which is due to negligence or disregard of rules and regulations.	Kim underpaid her taxes by $15,000 of which $7,500 was the result of negligence due to inadequate record keeping. Calculate the amount of any negligence penalty.
Accuracy Related Penalty - Substantial Understatement of Tax	___ % of the underpayment due to substantial understatement Understatement is substantial when it exceeds the greater of ____ % of the tax required to be shown on the return (5% for corporations) or $ ________ ($10,000 for corporations)	Alans return was audited by the IRS and he agreed to a $10,000 deficiency, increasing his tax from $50,000 to $60,000. Is the understatement substantial? Provide reasoning. Compute the penalty, if any.
Accuracy Related Penalty - Substantial Valuation Overstatement	____ % of the underpayment Value or adjusted basis of any asset claimed on a return is ____% or more of the correct value or basis. Does not apply if understatement related to valuation misstatement is less than $5,000 Increases to ____% penalty for gross misstatement For gross misstatement value or basis claimed is _____% or more of correct value.	Samantha, a calendar year taxpayer subject to a 37% marginal tax rate claimed a charitable deduction of $170,000 for a sculpture that the IRS later valued at $100,000. Compute the penalty. Compute the penalty if the deduction claimed was $400,000 for a sculpture that the IRS later valued at $150,000