Episode Details

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The minimum standard for any tax return position under Circular 230 Section 10.34 is 'reasonable basis,' which is a position with at least a 20% chance of success. - To avoid substantial understatement penalties, a position with only a 'reasonable basis' must be adequately disclosed to the IRS, typically using Form 8275. - A higher standard, 'substantial authority' (approximately a 40% chance of success), is required for undisclosed positions to avoid penalties. - Frivolous positions, which are patently improper, are strictly prohibited and can lead to severe sanctions for the tax practitioner. - Practitioners have a duty to advise clients about potential accuracy-related penalties and the options available to avoid them through disclosure. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep