1. (a) For purposes of meeting the requirements of RSA 21-J:33-b and RSA 21-J:33-c, adequate disclosure of the tax treatment of an item on the return or in a statement attached to the front of the return shall occur when all of the following criteria are met:

   1. (1) The statement contains a prominent caption identifying the statement as a disclosure of the tax treatment for the understatement of taxpayer’s liability by tax preparer penalty provided in RSA 21-J:33-b and the penalty for aiding and abetting an understatement of tax liability provided in RSA 21-J:33-c;
   2. (2) The item for which the disclosure is made is clearly identified;
   3. (3) The dollar amount of the item is disclosed; and
   4. (4) The statement contains those facts affecting the tax treatment of the item that reasonably will apprise the department of the nature of the potential controversy or a concise description of the legal issues presented by the facts in question.

2. (b) In determining whether substantial authority exists, the department shall consider the following as being authoritative sources, which shall be considered in the following order of review, based on the relevance of the source, the similarity of facts, and the precedential value of the source compared to the matters at issue:

   1. (1) United States and New Hampshire supreme court decisions;
   2. (2) The tax statutes on tobacco and any other New Hampshire statutes that have a bearing on the tax statutes;
   3. (3) Rules issued by the department;
   4. (4) Declaratory rulings requested by and issued to the licensee making the disclosure;
   5. (5) Technical information releases issued by the department;
   6. (6) Superior court and board of tax and land appeals decisions;
   7. (7) Federal district court and first circuit court of appeals decisions;
   8. (8) Legislative committee reports specifying legislative intent; and
   9. (9) Written advice from the department issued to the licensee about the tax treatment of the item in question.

3. (c) The following shall not be considered authoritative sources:

   1. (1) Opinions by tax professionals;
   2. (2) Tax publication opinions or narrative statements; or
   3. (3) Articles contained in any professional or tax periodicals.
4. (d) The existence of substantial authority for a particular item shall be determined as of the date the return containing the item was filed or as of the last day of the period to which the return relates.

Source. #6662, eff 12-25-97; ss by #8526, 12-21-05; ss by #10536, eff 3-6-14; ss by #13817, eff 12-1-23 (formerly Rev 1010.03) (see Revision Note #2 at chapter heading for Rev 1000)