A tax practitioner can avoid IRS penalty relating to a tax return position:
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 these.
Answer: C. if there is substantial authority to support the position.