In which of the following situations will a tax preparer likely incur a penalty?

The tax position is supported by substantial authority and is not disclosed on the tax return.

The position has a reasonable basis for being upheld and is disclosed on the tax return.

The tax position is supported by one authority, contradicted by several other authorities, and is not disclosed on the tax return.

Based on research, it appears there is a $35-40$ percent chance that the position will be upheld in an audit or litigation.