The tax season for 2025 has begun, and there are some important considerations for Americans when filing their tax returns. Filters in the United States should be aware that this error may result in an automatic $5,000 penalty when filing their returns.
Congress passed a rule that punishes taxpayers who delay or obstruct the implementation of federal tax laws with an automatic $5,000 fine. This regulation was enacted in response to an alarming increase in taxpayers intentionally violating tax laws for trivial reasons.
It focuses on “protest” returners rather than those who unintentionally violate the law by requesting an excessive refund.
As a result, federal lawmakers require the Internal Revenue Service (IRS) to send a letter to the person who triggered the punishment, giving them 30 days to correct the inadvertent error in order to avoid the penalty. What should taxpayers be aware of in order to avoid receiving an unexpected $5,000 fine?
Many taxpayers are unaware that fines could go up to $5000 for doing this on their tax return
When submitting a tax return to the IRS, you must be accurate and truthful. If the tax agency finds your filing position to be “frivolous,” you and your spouse may both face an instant $5,000 penalty.
Section 6702, which establishes a civil penalty for frivolous income tax returns, was added to the Code following Section 326(a) of the Tax Equity and Fiscal Responsibility Act of 1982.
According to the IRS, if a filer submits what they claim to be an income tax return but omits information that could be used to evaluate the self-assessment’s substantial correctness or includes information that suggests the self-assessment is substantially incorrect, they will face an immediate penalty.
Furthermore, the agency concludes that the submission of the alleged return was motivated by either a frivolous position or a desire to obstruct or delay the enforcement of federal income tax regulations, as demonstrated by the alleged return.
In addition to the $5,000 penalty, any other penalties or fines may be imposed. As previously stated, taxpayers must receive a letter from the Internal Revenue Service.
When the IRS processes a return that appears to have been prepared by a “ghost preparer” and lacks a Preparer Tax Identification Number (PTIN) or a signature, red flags will be raised about its legitimacy.
However, if you receive one of these letters, be aware that the wording of the letter may not fully inform the Taxpayer Advocate Service about the location of the problem in your filing. Although the IRS office was successful in getting some clarifying language included in letters, they believe it is still inadequate.
Do Americans need to contact the IRS to file their tax return?
Most citizens and residents who work in the United States are required by the IRS to file a tax return if their gross income exceeds or equals $14,600. Income thresholds vary according to a person’s filing status.
For example, married people under the age of 65 who earn $29,200 or more in gross income, as well as heads of households earning $21,900 or more, must file taxes.
For married couples filing separately, the threshold drops to $5. Even if you are claimed as a dependent by someone else, you must still file a return if you have at least $1,300 in “unearned” income, such as interest from investments.
Other factors, such as your disability status, may influence your decision to file. The IRS offers a 12-minute online quiz to determine whether you are required to file a tax return. Even if the Internal Revenue Service does not require you to file a return, you may choose to do so.
If your employer has deducted any amount from your paycheck for taxes, you may be eligible for reimbursement. According to Lisa Greene-Lewis, a certified public accountant and TurboTax specialist, the IRS has more than $1 billion in unclaimed returns.
According to a TurboTax survey conducted by Talker Research, 20% of Generation Zers believe they are exempt from filing taxes.
