§6702 Frivolous tax submissions

Summary

You must pay a $5,000 penalty if you file something that looks like a tax return but either leaves out the facts needed to check the tax amount or shows on its face that the tax figure is clearly wrong, and that filing is based on a position the IRS has called frivolous or is meant to delay or block tax enforcement. The $5,000 penalty also applies to certain other filings — like requests for hearings about liens or levies and applications for installment payment plans, offers to settle, or taxpayer assistance orders — if any part is frivolous or meant to delay. If the IRS notifies you a filing is frivolous and you withdraw it within 30 days, no penalty applies. The IRS will make and update a list of positions it considers frivolous, but it won’t include positions that meet a specific legal test. The IRS can lower a penalty to encourage people to follow the tax rules. These penalties are in addition to any other penalties. Certain partnership adjustment filings are treated the same as a return for these rules.