The Internal Revenue Service has released its annual update identifying the circumstances under which the disclosure on a taxpayer's income tax return with respect to an item or a position is adequate for the purposes of reducing the understatement of income tax and avoiding the tax return preparer penalty.

The IRS noted Monday that Rev. Proc. 2012-51 does not apply with respect to any other penalty provisions (including the disregard provisions of the Section 6662(b)(1) accuracy-related penalty, the Section 6662(i) increased accuracy-related penalty in the case of nondisclosed noneconomic substance transactions, and the Section 6662(j) increased accuracy-related penalty in the case of undisclosed foreign financial asset understatements).

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