If Schrumpf LLC, a semiweekly depositor, is required to deposit $3,090 of 941 taxes, what is the maximum amount of their shortfall in order to not be subject to a failure-to-deposit penalty

$100

Explanation:

Safe harbor rules say that if the under deposited amount is less than the greater of $100 or 2% of the amount required to be deposited, no failure-to-deposit penalties will be imposed.

Semi-weekly depositors shortfall must be deposited by the first Wednesday or Friday occurring on or after the 15th of month after the month during which the original deposit was due (CANNOT send shortfall with their Form 941, must be deposited separately).

The maximum amount of their shortfall in order to not be subject to a failure to deposit penalties is $100.

Explanation:

There is a binding rule as regarding deposit. The rule states that if the under deposited amount is less than the greater of $100 and the 2% of amount so deposited, no failure to deposit penalties will be imposed.

From the foregoing, there is the imperative to determine the 2% of the amount deposited.

That is, 2/100 * $3,090 = $61.8

The 2 % of the amount deposited is thus $61.8

Using the general/binding rule as a benchmark, the greater of $100, and the 2% of amount deposited is obviously $100, as this is bigger than $61.8 derived.

Conspicuously, the maximum amount of their shortfall in order not to be imposed with failure to deposit penalties, using the general binding rule for deposit, is $100.

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