What is substantial authority, what is the role of the courts and the Internal revenue service in interpreting and applying the sources of tax law?© BrainMass Inc. brainmass.com June 4, 2020, 2:13 am ad1c9bdddf
What is substantial authority?
The IRS (in a difficult to read posting) says that substantial authority is:
"Until further guidance is issued, solely for purposes of section 6694(a), "substantial authority" has the same meaning as in § 1.6662-4(d)(2) (or any successor provision) of the accuracy-related penalty regulations. The analysis prescribed by § 1.6662-4(d)(3)(i) through (ii) (or any successor provisions) applies for purposes of determining whether substantial authority is present. The authorities considered in determining whether there is substantial authority for a position are those authorities described in § 1.6662-4(d)(3)(iii) (or any successor provision).
There is substantial authority for a position for purposes of section 6694 if the taxpayer is the subject of a "written determination" as provided in § 1.6662-4(d)(3)(iv)(A). In the case of a tax return preparer, however, a written determination with a misstatement or omission of material fact is substantial authority unless the tax return preparer knew or should have known of the misstatement or omission of material fact when the return or claim for refund was filed. The applicability of court cases to the taxpayer's situation by reason of the taxpayer's residence in a ...
The 788 word cited solution provides good explanation in response to the questions.