Related Concepts and Terms

Understanding Form 8275-R also involves familiarity with other tax concepts:

  • Substantial Understatement Penalty: This is the penalty you’re trying to avoid by using Form 8275-R.
  • Reasonable Basis: This is the legal standard for when you can avoid penalties when disclosing a position on Form 8275-R. You must have a reasonable basis for why your position is correct, and it can’t be frivolous.
  • Treasury Regulations: The very rules you are disclosing you are not following to the letter of the law.
  • Tax Court: If the IRS disagrees with your interpretation of the law, you may end up in Tax Court, which is a court that specializes in tax matters.