A Tax Practitioner Can Avoid IRS Penalty Relating to a Tax

question 62

Multiple Choice

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

• A)only if the position has a more likely than not chance of being sustained by the IRS or courts.
• B)if the position has a realistic possibility of being sustained by the IRS or courts.
• C)if there is not substantial authority to support the position.
• 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:

Hostile Takeover

An acquisition attempt by a company by going directly to the company's shareholders or fighting to replace management to get the acquisition approved.

Competitive Rival

Competitive Rival refers to a competitor within the same industry or market that offers similar products or services, challenging a firm's market share.

Holding Companies

Entities created to own the outstanding stock of other companies, controlling their policies and management.

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company.