(1) In general. If a tax return preparer—(A) prepares any return or claim of refund with respect to which any part of an understatement of liability is due to a position described in paragraph (2), and (B) knew (or reasonably should have known) of the position, such tax return preparer shall pay a penalty with respect to each such return or claim in an amount equal to the greater of $1,000 or 50 percent of the income derived (or to be derived) by the tax return preparer with respect to the return or claim.
(2) Unreasonable position. (A) In general. Except as otherwise provided in this paragraph, a position is described in this paragraph unless there is or was substantial authority for the position. (B) Disclosed positions. If the position was disclosed as provided in section 6662(d)(2)(B)(ii)(I) [26 USCS § 6662(d)(2)(B)(ii)(I)] and is not a position to which subparagraph (C) applies, the position is described in this paragraph unless there is a ...