Christie is the preparer of the Form 1120 for Yostern Corporation. On the return, Yostern claimed a deduction that the IRS later disallowed on audit. Compute the tax preparer penalty that could be assessed against Christie in each of the following independent situations.

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Form 8275 Disclosure Tax Reduction on the Return of the Resulting from Disputed Deduction? th Deduction Probability That the Courts Would Approve the Deduction 65% a. b. C. d. C. No No No Yes Yes 40,000 40,000 40,000 40,000 40,000 Christie's Fee to Complete Yostern's Return $7,000 7,000 1,500 7,000 4,000 35 35 35 15