A corporate client incurred substantial penalties for understating its tax liability. As a result, it has accused its tax return preparer in a lawsuit of acting "below the standard of care" and "recklessly" for failing to apply the substantial authority standard in preparing this client's tax return. In support of its claims, the client's attorney has pointed out to the jury that AICPA Standards generally require that a tax position meet the substantial authority standard. The client is suing to recover the penalties imposed by the taxing authority as damages. The tax law did not establish any particular standard of reporting regarding this taxpayer's tax positions.
a. Can the tax return preparer successfully defend this lawsuit by pointing out that she is not a CPA?
b. If this tax return prepare was a CPA, could she successfully defend this lawsuit by pointing out that she is not a member of the AICPA?
c. Does a tax position always have to meet, at minimum, the substantial authority standard?