Substantial Authority

Question 1

Reasonable basis standard

Answer 1

Is a tax position that has at least a 20% chance of succeeding, one that is arguable but fairly unlike to prevail in court

Question 2

Substantial authority standard

Answer 2

Is a position that has more than a 40% chance of succeeding in court. Only analyses and reports issued by the U.S congress, IRS regulations, rules and releases, and U.S court cases decision constitute substantial authority Tax articles and treatises do not constitute substantial authority

Question 3

More-likely-than-not standard

Answer 3

Is met when there is a greater than 50% likelihood of a tax position being upheld in court