A Taxpayer Can Avoid a Substantial Understatement of Tax Penalty

question 50

Multiple Choice

A taxpayer can avoid a substantial understatement of tax penalty:

• 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:

A-B-C Priority System

A method of categorizing tasks or items based on their importance or urgency, with 'A' being most critical, 'B' being important but not urgent, and 'C' being less important.

Mission Statement

An official outline of the objectives and beliefs of a corporation, institution, or person.

Planning Process

A systematic approach to defining goals, developing strategies, and outlining tasks and schedules to achieve the desired objectives.

Monitoring Performance

The process of observing and measuring an activity or tasks to ensure that they are being accomplished as planned and correcting any deviations.