Penalties may be imposed on a tax return preparer for an understatement of tax liability because of a position for which there is not a reasonable belief that there is substantial authority that the position will be sustained on its merits. But the penalties may be excused if
A. The preparer knew or should have known of the position.
B. The understatement was unintentional.
C. The position was disclosed.
D. There is reasonable cause and good faith.
Answer: D