Interactions with the Internal Revenue Service can be much more high-stakes than your typical interaction. What a person does and how they act when it comes to such interactions can have considerable implications on them and their wallet.
One of the main interactions taxpayers have with the IRS is their annual federal tax returns. It is important to exercise care in all aspects of such returns. This includes in what sorts of claims and arguments one puts in their returns. It can be a very serious matter if the IRS accuses a person of including a “frivolous tax argument” in their tax return.
When the IRS finds that a reason that a person gave for not paying certain taxes or for claiming a refund was “frivolous,” the taxpayer can face major consequences beyond just having their argument rejected. They can be fined for making the argument in their return. Around 6,000 people were given a fine by the IRS for frivolous tax arguments in 2014.
This fine can get quite large. It can be up to $5,000.
As this underscores, missteps when it comes to one’s federal tax returns can end up being quite costly for a taxpayer.
Now, there are a variety of IRS interactions a taxpayer could have after they file their tax return. This includes interactions regarding a debt the IRS has assessed or a penalty the IRS has issued. These post-return interactions are yet another area where considerable care is necessary, as how such matters are ultimately resolved can matter greatly for a taxpayer. So, when in negotiations with the IRS over a tax debt or a fine, quality legal advice can be a key thing to have.
Source: Fox23, “IRS can fine for tax excuses,” Oct. 13, 2016