Page:United States Statutes at Large Volume 122.djvu/3903

 12 2 STA T .38 8 0PUBLIC LA W 110 – 3 4 3 —O CT. 3 , 2008 (B) ( vi i). ....................................................................... 10’ ’. ( c ) EF F ECTIV E DA TE. —Theam e nd men ts made by this secti o n sha l la p plytop r operty placed in service a f ter December 3 1 ,2 00 8 . SEC.506 . MODIF IC AT IO N OF P ENA L T Y ON U NDE R STATEMENT OF TA X- PAYER ’ S LIA B ILITY BY TAX RETURN PREPARER. (a) ING ENE R A L .— Su bsection (a) of section 6 6 94 is amended to read as follo w s

‘(a) U N D ER S TATE M ENT D U ET O UNREASONA B LE P OSITIONS.— ‘‘(1) IN G ENERAL.—If a ta x return preparer— ‘‘( A ) prepares any return or claim of refund with respect to which any part of an understatement of liability is due to a position described in para g raph (2), and ‘‘(B) k new (or reasonably should have known) of the position, such tax return preparer shall pay a penalty with respect to each such return or claim in an amount e q ual to the greater of $ 1,000 or 5 0 percent of the income derived (or to be derived) by the tax return preparer with respect to the return or claim. ‘‘(2) UNREASONABLE P OSITION.— ‘‘(A) IN GENERAL.—Except as otherwise provided in this paragraph, a position is described in this paragraph unless there is or was substantial authority for the position. ‘‘(B) DISCLOSED POSITIONS.—If the position was dis - closed as provided in section 6662(d)(2)(B)(ii)(I) and is not a position to which subparagraph ( C ) applies, the position is described in this paragraph unless there is a reasonable basis for the position. ‘‘(C) TA X S H ELTERS AND REPORTABLE TRANSACTIONS.— If the position is with respect to a tax shelter (as defined in section 6662(d)(2)(C)(ii)) or a reportable transaction to which section 6662A applies, the position is described in this paragraph unless it is reasonable to believe that the position would more likely than not be sustained on its merits. ‘‘(3) R EASONABLE CAUSE EXCEPTION.— N o penalty shall be imposed under this subsection if it is shown that there is reasonable cause for the understatement and the tax return preparer acted in good faith.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply— (1) in the case of a position other than a position described in subparagraph (C) of section 6694(a)(2) of the Internal Rev- enue Code of 1986 (as amended by this section), to returns prepared after M ay 25, 200 7, and (2) in the case of a position described in such subparagraph (C), to returns prepared for taxable years ending after the date of the enactment of this Act. 26USC 66 94note. 26 USC 6694. 26 USC 1 6 8 note.

�