Detailed Summary

Amends the Internal Revenue Code to modify the standards for imposing penalties on tax return preparers for understatements of tax to require: (1) substantial authority for a position with respect to an item on a tax return if such position was not disclosed with the return; and (2) a reasonable basis for a position which was disclosed with the return.

Requires tax return preparers to have a reasonable belief that a position with respect to a tax shelter or a reportable transaction (a transaction having a potential for tax avoidance or evasion) will be more likely than not be sustained on its merits.

Status of the Legislation

Latest Major Action: 4/14/2008: Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

Points in Favor

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Points Against

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