The Penalty for Substantial Understatement of Tax Liability Does Not

question 83

Multiple Choice

The penalty for substantial understatement of tax liability does not apply if:

• A) The taxpayer has substantial authority for the treatment taken on the tax return.
• B) The relevant facts affecting the treatment are adequately disclosed in the return or on Form 8275.
• C) The IRS failed to meet its burden of proof in showing the taxpayer's error.
• D) All of these statements are correct.