@Carl wrote:
To put it a simpler way:
If at tax filing time what you owe the IRS is more than $1000 *OR* more than 10% of your total tax liability (whichever is HIGHER), then an underpayment penalty will be assessed.
You have posted that previously, @Carl, and, although whether or not you believe it is a more simple way to put it, in actuality it is simply not accurate; penalties are primarily based upon what the taxpayer's income tax liability was for the prior year (if any).
In other words, you cannot simply look to what is owed for the current tax year, at "tax filing time", to determine whether or not an underpayment penalty will be assessed.
