Chapter 17

Example 4
Amount should have be
For 2019/20 Due date Actual paid Original
1st POA 31-Jan-20 29-Jan-20 3500 4500
2nd POA 31-Jul-20 12-Aug-20 3500 4500
Final balancing payment 31-Jan-21 19-Feb-21 5500

Interest for late payment

1 Aug 2020 to 12 Aug 2020 = 3500x3.25%x1/12 9
1 Feb 2021 to 19 Feb 2021 = 5500x3.25%x1/12 15
Interest for reduce POA
1st POA = 31 Jan 2020 to 31 Jan 2021 = 1000x3.25%x12/12 33
2nd POA = 31 Jul 2020 to 31 Jan 2021 = 1000x3.25%x6/12 16
73

Penalties
1. Errors
2. Late notification of chargeability 1. Notice of Chargeability
3. Late Tax Return 2. Tax Return
4. Late payment 3. Tax Payment

Example 5

Error = 68000-60000 = $8000

Tax Liability = 8000x40% 3200
Potetnital lost revenue = $3200
Maxi Penalty for careless = 30% on PLR = 30%x3200 960

Example 6

Error = 12000
Tax Liability = 12000 x 40% 4800
Potential lost revenue = $4800

Deliberate and conceal

Maximum penalty = 100% on PLR = 100% x 4800 4800
Minimmum penalty(prompt) = 50% on PLR=50%x4800 2400
Amount should have been paid
50% x final Tax lia
5000
5000