§6702 Frivolous Tax Submissions

Summary

If you file a tax return or other tax paper that either doesn’t give enough facts to check the tax or clearly shows the tax is wrong, you must pay a $5,000 penalty when the filing is based on a position the IRS has labeled frivolous or is meant to delay or block tax enforcement. The $5,000 penalty also covers certain submissions, like requests for collection hearings and applications for installment agreements, compromises, or taxpayer assistance orders. If the IRS tells you a submission is frivolous and you withdraw it within 30 days, no penalty applies. The IRS keeps and updates a list of frivolous positions and will not include any position it finds meets the requirement of section 6662(d)(2)(B)(ii)(II). The IRS can lower the penalty to promote compliance. Penalties are in addition to any other penalties. An administrative adjustment request under section 6227 and a partnership adjustment tracking report under section 6226(b)(4)(A) are treated as returns for these rules.