Lets say I have no employment income, just investment income. In 2011 I pay $4 in federal tax. Figuring it will cost the IRS $25 to process the $4 estimated tax payment I need to pay to get into safe harbor, I just ignore it.
In 2012 I do rather better and owe $10,000. Do I have to pay a penalty on the $4 I should have paid in estimated taxes, or the entire $10,000?