[waitspring]

Hello, I have a lot of REC questions:)

When I study the IRC, I am confused with the “upheld”—3 standard: More likely than not, Sbustantial Authority and reasonable basis.

Below is what I got from the BEC:

More Likely Than Not >50% a tax position be upheld by the court

Substantial Authority >33%>50% a tax position be upheld by the court standard is less stringent than more likely than not stantard

Reasonable Basis >20% a tax position be upheld by the court High standard of tax reporting

According to the BEC, the upheld by the court means that the tax case is lose in the court. So the lower percentage, the higher standard. So the comparison of the standard between the 3 typies is:

Standard: More likely than not<Substantial Authority<Reasonable basis

While in the BEC, it said: the Substantial Authority standard is less stringent than the more likely than not standard. I don’t get it. The chance of more likely than not lose case is more than 50%, the substantial authority is between 33% to 50%, then the substantial authority standard should be higher than the more likely than not.

Thanks a lot for your help!!