gavel and papers- $5,000 is the penalty for frivolous tax returns

Ever Hear of A Frivolous Tax Return?

 A Frivolous Tax Return? Is there such a thing?

Takeaway – The definition of frivolous means; of little weight or importance, having no sound basis (as in fact or law).

What is a frivolous tax return?  A frivolous tax return does not include enough information to verify whether the tax was correct or contains information showing that the reported tax was incorrect.  For instance, Ella Evans doesn’t want to pay income taxes. However, she believes that she must pay taxes on the gross income that she reports to the IRS. So, she reports making zero income on her Form 1040. The tax return then shows a tax liability of zero dollars. She may think she is wily, but anyone who submits a frivolous tax return will be subject to severe IRS penalties. Remember, if you live in the good old USA and meet the required amount of earned income, the law requires you to pay taxes.

Are any arguments against paying income tax valid?

Scammers, fakes, and even tax protestors have created complex ideas to convince themselves and the public that filing a tax return is avoidable. They genuinely believe that they can ignore federal tax laws. Consequently, these frivolous tax arguments can cause them or others to incur substantial civil penalties and fees. The IRS has documented dozens of cases in which individuals challenged the IRS in court and ultimately lost their argument against paying federal income tax.

Sadly, some of these people declare themselves professional tax preparers and have charged their clients for services. They, in turn, received a frivolous tax return penalty as they believed there are “loopholes” that these unscrupulous tax pros were advocating. So, think twice before adopting any fly-by-night, unethical frivolous arguments.  Frivolous tax arguments were on IRS’ ‘Dirty Dozen’ scams list for 2019.

There are all sorts of convoluted arguments against paying taxes. The IRS has compiled a list of these arguments. Read them here,

  • “The filing of a tax return is voluntary.”
  • “Payment of federal income tax is voluntary.”
  •  “Only foreign-source income is taxable.”
  • “Military retirement pay does not constitute income.”
  • “Taxpayers can reduce their federal income tax liability by filing a “zero” return.”
  • “The First Amendment protects religion, and it’s against my religion to give money to the government.”
  • “IRS summonses violate the Fourth Amendment protections against search and seizure.”

Yes, there is a Frivolous Tax Return penalty!

The Taxpayer Bill of Rights provides that a taxpayer has “the right to pay no more than the correct amount of tax.” However, a taxpayer does not have the right to violate the law or disregard their tax obligation. Individuals that buy into these frivolous tax arguments risk criminal and civil penalties.

You may be subjected to various frivolous tax return penalties if you adopt an argument against income tax, including:

  • Failure-to-file penalty
  • Failure-to-pay penalty
  • $5,000 penalty for frivolous tax returns
  • Accuracy-related penalty (20% of the underpayment attributable to negligence or disregard of rules and regulations)
  • Civil fraud penalty (75% of the underpayment attributable to fraud)
  • Erroneous claim for refund penalty (20% of the excessive amount)
  • Fraudulent failure to timely file penalty (triple the amount of the standard failure-to-file penalty

Also, any frivolous tax return penalty will be imposed on top of the outstanding tax debt. Taxpayers who appeal a decision on frivolous grounds may be subject to additional sanctions (including double the costs and damages).

Frivolous tax arguments may result in criminal persecution, as well. These taxpayers may be charged with a felony for attempting to evade or defeat tax, which comes with a penalty of up to $100,000 and imprisonment for up to five years. So, the next time you hear someone selling you frivolous tax arguments, walk away.

Suppose you hear about a great new tax strategy that will save you money; you might want to speak with us first before filing your tax return. Then, you can count on Enrolled Agent and Certified Tax Resolution Specialist, Jeffrey Schneider, EA, CTRS, ACT-E to ensure you remain fully compliant with the federal tax law.

If you haven’t filed tax returns because you believed a frivolous tax argument and have tax liabilities contact our firm today. We help people find tax relief, file years of unfiled tax returns, and sometimes settle their tax debt for a fraction of what’s owed.  Call today, 877-355-8010, to end your tax problems permanently. Or book an appointment online,

#frivoloustaxreturn #IRS #taxpenalties #jeffreyschneiderea #thetaxreliefco