the additional amount due would include a late payment penalty (1/2% a month for each month or fraction thereof from 4/15/2019 till the date of the notice), then there could be a 20% substantial underpayment penalty and lastly interest
(1) Substantial. An understatement (as defined in paragraph (b)(2) of this section) is “substantial” if it exceeds the greater of -
(i) 10 percent of the tax required to be shown on the return for the taxable year (as defined in paragraph (b)(3) of this section); or
(ii) $5,000 ($10,000 in the case of a corporation other than an S corporation (as defined in section 1361(a)(1)) or a personal holding company (as defined in section 542)).
(2) Understatement. Except as provided in paragraph (c)(2) of this section (relating to special rules for carrybacks), the term “understatement” means the excess of -
(i) The amount of the tax required to be shown on the return for the taxable year (as defined in paragraph (b)(3) of this section), over
(ii) The amount of the tax imposed which is shown on the return for the taxable year (as defined in paragraph (b)(4) of this section), reduced by any rebate (as defined in paragraph (b)(5) of this section).
The definition of understatement also may be expressed as -
Understatement = X − (Y − Z)
where X = the amount of the tax required to be shown on the return; Y = the amount of the tax imposed which is shown on the return; and Z = any rebate.
