Taxpayers face the risk of the 20% accuracy-related penalty when they take return positions that are too aggressive or otherwise problematic...

(a) Section 6662 itself contains no escape mechanisms whatsoever, so a tax-payers only available defense against the penalty is good faith and reasonable cause per 6664(c).

(b) Section 6662 contains two stated triggers, negligence and substantial understatement, and the IRS cannot assert the penalty unless both are present.

(c) Unless a taxpayer ultimately wins with respect to the underlying tax issue(s) (the asserted tax deficiency), it is impossible to win on the penalty issue.

(d) If a taxpayer does win with respect to the underlying tax issue(s), the penalty assertion becomes moot.