If a tax return preparer prepares a return that involves a "listed transaction," the preparer can avoid all penalties if
A)the position is not unreasonable.
B)the position has a possibility of success.
C)the preparer has substantial authority for the position
D)the position has no support but there is no evidence of fraud.

Question

Quizplus · Accepted Answer

The preparer can avoid penalties if there is substantial authority for the position taken on the tax return. This means that the preparer must have a strong legal and factual basis for the tax treatment of the item, which is a higher standard than merely having a reasonable basis or a possibility of success.

If a Tax Return Preparer Prepares a Return That Involves