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Upon audit of Mr. Tom Staton's 2017 Form 1040, the revenue agent determined that he understated his tax liability by $4,300. A. Compute Mr. Staton's

Upon audit of Mr. Tom Staton's 2017 Form 1040, the revenue agent determined that he understated his tax liability by $4,300.

A. Compute Mr. Staton's penalty for substantial understatement if his correct tax liability for 2017 was $40,800.

B. Compute Mr. Staton's penalty for substantial understatement if his correct tax liability for 2017 was $69,700.

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