Frivolous Tax Submission Penalty

Frivolous Tax Submission Penalty

The Frivolous Tax Submission Penalty is a financial penalty imposed by the Internal Revenue Service (IRS) on taxpayers who submit returns or other documents that are deemed frivolous. This includes submissions that lack a legitimate basis in law or fact, typically characterized by arguments that have been previously rejected by the courts.

Taxpayers may be subjected to this penalty when they file a return that claims a refund based on frivolous positions or when they fail to file a tax return altogether while asserting a baseless argument against the obligation to pay taxes. The penalty amount can be up to $5,000.

For example, if a taxpayer files a return claiming that they do not owe taxes because their wages are not taxable, this could be viewed as a frivolous submission, leading to the imposition of the penalty.