A Tax Practitioner Can Avoid IRS Penalty Relating to a Tax

question 87

Multiple Choice

A tax practitioner can avoid IRS penalty relating to a tax return position:

• A)if the position is frivolous and disclosed on the tax return.
• B)if the position has a realistic possibility of being sustained by the IRS or courts.
• C)if there is substantial authority to support the position.
• D)if the position has a reasonable basis and is not disclosed on the tax return.
• E)None of the choices are correct.

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Definitions:

Spontaneity

The quality of being unrehearsed or unpremeditated, often leading to genuine and immediate reactions or actions.

Persuasive Powers

The ability to convince others to adopt a certain perspective, belief, or to make a decision in one's favor through argument or appeal.

Loyalty

The quality of being faithful or devoted to a person, country, group, or cause.

Caution Signals

Indications or warnings that suggest a potential problem or risk in a situation, especially relevant in decision-making processes.