An underpayment penalty is NOT automatically assessed if you owe more than $1000 or more than 10% of your tax liability at tax filing time. A penalty is assessed if you didn't pay at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There's a difference. So if you owe $100,000 in tax for the current year there would be no penalty if you paid 100% of the tax shown on your return for the prior year even if the tax liability for the prior year was $5000 and $5000 is all you paid. You'd owe a lot for the current year but you wouldn't get a penalty.
