A business is considering whether or not to claim certain resource extraction tax credits. The treasury regulations issued before the effective date of recent legislation imply that such credits are not allowable in this particular case, but the recent legislative action by Congress allows the credits.

What should the company do in this case?

$$ The treasury regulations should be treated as authoritative, and the company may not claim the credits.

$$ The recent legislation should be treated as authoritative, and the company may claim the credits.

$$ The recent legislation should be treated as authoritative, but the company may not claim the credits.

$$ The treasury regulations should be treated as authoritative, but the company may claim the credits.

According to Statement on Standards for Tax Services No$.1,$ in which case can a tax practitioner recommend a tax return position?

$$ If the position is frivolous and disclosed on the tax return

$$ Only if the position meets the "clear and convincing evidence" standard

$$ If the position complies with the standards imposed by the applicable tax authority

$$ Only if the position meets the "more likely than not" standard