Which term refers to charges for late payment in tax collection?

• A. Interest and Penalties
• B. NSF Fees
• C. Late Fees
• D. Sundry Charges

Answer: (A)

When a tax payment is late, the charges are designed to compensate for the delay and to deter noncompliance. The standard charges are interest on the unpaid amount plus penalties for late payment or other noncompliance. Interest accrues from the due date until payment is made, reflecting the cost of the government holding the funds. Penalties are additional amounts that may apply for late filing, late payment, or other failures to meet requirements. NSF fees are bank charges when a payment doesn’t clear, not charges the tax authority imposes for late payment. Late fees can appear in some contexts, but the typical combined term for these late-payment costs in tax collection is “interest and penalties.” Sundry charges is a broad, miscellaneous category that doesn’t specifically describe late-payment costs.