What is the maximum year-end penalty for delinquency over $10,000 per year?

What is the maximum year-end penalty for delinquency over $10,000 per year?

• A. Up to 4%
• B. Up to 6%
• C. Up to 8%
• D. Up to 10%

Answer: (B)

The concept tested is how year-end penalties on delinquent taxes are capped. When a year’s delinquency exceeds $10,000, the maximum year-end penalty that can be assessed is 6%. This ceiling comes from the statutory penalty schedule and serves to deter late payment while not being excessive. For example, if $12,000 is delinquent, the year-end penalty cannot exceed 6% of that amount—that would be $720. The other percentages would exceed the allowed cap for this level of delinquency, so they aren’t correct.

The concept tested is how year-end penalties on delinquent taxes are capped. When a year’s delinquency exceeds $10,000, the maximum year-end penalty that can be assessed is 6%. This ceiling comes from the statutory penalty schedule and serves to deter late payment while not being excessive. For example, if $12,000 is delinquent, the year-end penalty cannot exceed 6% of that amount—that would be $720. The other percentages would exceed the allowed cap for this level of delinquency, so they aren’t correct.