A taxpayer can avoid an underpayment penalty if there is substantial authority that supports her tax return position.

Question

Quizplus · Accepted Answer

This statement is true. If a taxpayer can prove that there was substantial authority to support their tax return position, they can avoid an underpayment penalty. Substantial authority means that the position taken on the tax return is more likely than not to be correct, based on relevant tax law and court decisions.

A Taxpayer Can Avoid an Underpayment Penalty If There Is