Which of the Following Statements Does Not Reflect the Rules

question 122

Multiple Choice

Which of the following statements does not reflect the rules governing the accuracy-related penalty for negligence?

• A) The penalty rate is 20%.
• B) The penalty applies whenever the taxpayer takes a return position that is contrary to a court decision.
• C) The penalty applies when the taxpayer does not keep records adequate to compute the tax correctly.
• D) The penalty is waived if the taxpayer uses Form 8275 to disclose a return position that is reasonable though contrary to the IRS position.

---

Definitions:

Explicit Costs

Direct, out-of-pocket payments for resources employed in the production of goods or services, easily identified and measured.

Capital Intensive

A description of industries or businesses that require large amounts of capital investment compared to labor.

Alternative Technologies

Various methods or means of producing goods or services that differ from current practices, often to improve efficiency or sustainability.

Optimal Method

The best or most efficient approach to achieve a specific goal or solve a particular problem.