Return Positions, Disclosures, and Perjury
Learn the decision pattern the exam can test, then apply it to a realistic taxpayer fact pattern.
What changes the answer?
Disclosure can affect a penalty standard but does not make an unreasonable or false position acceptable.
A tax-practice scenario
A client insists on a deduction with weak records and a disputed legal theory. Evaluate evidence, authority, disclosure, and whether to sign.
Identify the taxpayer, entity, transaction, and tax period first. Write the controlling tests in order, apply only the relevant facts, and keep the reporting result separate from any planning recommendation.
Do not take this shortcut.
Treating client insistence or software acceptance as authority for a return position.
Turn the rule into recall.
Write a short position memo stating facts, issue, authority, uncertainty, disclosure decision, and client communication.
- ExplainState the governing distinction without notes.
- ApplyChange one fact in the scenario and predict the new result.
- RetrieveAnswer an unseen question, then review every option.
Official source and scope
This lesson follows the current PSI content outline and uses the IRS reference below for the underlying tax or practice framework. Always confirm current forms, instructions, thresholds, and effective dates before advising a taxpayer.