Canada Revenue Agency (CRA) will charge arrears interest on unpaid income taxes according to a prescribed interest rate. Interest in arrear is compounded daily on any unpaid balance from the balance due date to the date of payment. Which statement is accurate?

1. If you do not file your income tax return by the due date, you will be charged 10% of the amount owing plus 2% for each additional full month that your return is late, to a maximum of 12 months.

2. If you do not file your income tax return by the due date, you will be charged 12% of the amount owing plus 1% for each additional full month that your return is late, to a maximum of 12 months.

3. If you do not file your income tax return by the due date, you will be charged 15% of the amount owing plus 1% compounded monthly for each additional full month that your return is late, to a maximum of 12 months.

4. If you do not file your income tax return by the due date, you will be charged 10% of the refund less the amount owing plus 2% for each additional full month that your return is late, to a maximum of 12 months.

5. If you do not file your income tax return by the due date, you will be charged 5% of the amount owing plus 1% for each additional full month that your return is late, to a maximum of 12 months.

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