R5: Professional Responsibilities and Securities Regulation

Question 1

Reasonable Basis

Answer 1

Tax position that has a greater than 20% chance of being sustained

Question 2

Substantial Authority

Answer 2

Tax position that has greater than 33% but less than 50% chance of being sustained

Question 3

More Likely Than Not

Answer 3

Tax position that has greater than 50% chance of being sustained

Question 4

What is the standard that must be established to prove a violation of the anti-fraud provisions of Rule 10b-5 of the Securities Exchange Act of 1934?

Answer 4

A violation of Rule 10b-5 will be found only if the person acted with scienter (intent to deceive or reckless disregard for the truth).