Mikel prepared for compensation a Federal income tax return for Mona. Monas return included an aggressive interpretation of the rules concerning the home office deduction. Mikel is not liable for a preparer penalty for taking an unreasonable tax return position if:

a. The tax reduction attributable to the disputed deduction did not exceed $5,000.

b. Mona is assessed her own penalty for an understatement of tax due to disregard of IRS rules.

c. The IRS found that the disputed deduction was frivolous, but Mona disclosed the position in an attachment to the return.

d. There was a reasonable basis for Monas interpretation of the home office deduction rules, and Mona disclosed the position in an attachment to the return.

e. Mona pays the additional tax assessed by the IRS without protest.