A Taxpayer Can Avoid a Substantial Understatement of Tax Penalty

question 87

Multiple Choice

A taxpayer can avoid a substantial understatement of tax penalty:

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

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Definitions:

Power

Refers to the capacity or ability of an individual or group to influence or control the actions and outcomes within an organization or society.

Legitimating Tactic

Legitimating tactic refers to strategies or actions undertaken by an individual or organization to justify or validate decisions, policies, or practices to gain acceptance or compliance from others.

Coalition Tactic

A strategy used to create a temporary alliance or partnership among diverse groups to achieve a common goal.

Exchange Tactic

A strategy used in interpersonal or organizational interactions where resources, benefits, or favors are traded to gain advantage or cooperation.