What does more likely than not mean on the CPA exam?
More likely than not. A greater than 50 percent chance of being sustained on its merits. The highest of the return-position standards, and the one required for a tax shelter.
Defined against Sec. 6694(a)(2).
Which CPA exam sections use more likely than not?
More likely than not appears in the REG section of the CPA exam.
Related terms
- substantial authority: The standard between reasonable basis and more likely than not: roughly a 40 percent chance, judged on the weight of published authorities rather than on the preparer's confidence.
- reasonable basis: The lowest standard at which a return position may be taken without penalty if it is disclosed.
- deferred tax asset: A future tax saving created when an item is deducted for accounting before it is deducted for tax, or when a loss can be carried forward.
- valuation allowance: The contra account reducing a deferred tax asset to the portion more likely than not to be realized, meaning a likelihood above 50%.