(a) Civil penalty for frivolous tax returns
A person shall pay a penalty of $5,000 if -
(1) such person files what purports to be a return of a tax
imposed by this title but which -
(A) does not contain information on which the substantial
correctness of the self-assessment may be judged, or
(B) contains information that on its face indicates that the
self-assessment is substantially incorrect, and
(2) the conduct referred to in paragraph (1) -
(A) is based on a position which the Secretary has identified
as frivolous under subsection (c), or
(B) reflects a desire to delay or impede the administration
of Federal tax laws.
(b) Civil penalty for specified frivolous submissions
(1) Imposition of penalty
Except as provided in paragraph (3), any person who submits a
specified frivolous submission shall pay a penalty of $5,000.
(2) Specified frivolous submission
For purposes of this section -
(A) Specified frivolous submission
The term "specified frivolous submission" means a specified
submission if any portion of such submission -
(i) is based on a position which the Secretary has
identified as frivolous under subsection (c), or
(ii) reflects a desire to delay or impede the
administration of Federal tax laws.
(B) Specified submission
The term "specified submission" means -
(i) a request for a hearing under -
(I) section 6320 (relating to notice and opportunity for
hearing upon filing of notice of lien), or
(II) section 6330 (relating to notice and opportunity for
hearing before levy), and
(ii) an application under -
(I) section 6159 (relating to agreements for payment of
tax liability in installments),
(II) section 7122 (relating to compromises), or
(III) section 7811 (relating to taxpayer assistance
(3) Opportunity to withdraw submission
If the Secretary provides a person with notice that a
submission is a specified frivolous submission and such person
withdraws such submission within 30 days after such notice, the
penalty imposed under paragraph (1) shall not apply with respect
to such submission.
(c) Listing of frivolous positions
The Secretary shall prescribe (and periodically revise) a list of
positions which the Secretary has identified as being frivolous for
purposes of this subsection. The Secretary shall not include in
such list any position that the Secretary determines meets the
requirement of section 6662(d)(2)(B)(ii)(II).
(d) Reduction of penalty
The Secretary may reduce the amount of any penalty imposed under
this section if the Secretary determines that such reduction would
promote compliance with and administration of the Federal tax laws.
(e) Penalties in addition to other penalties
The penalties imposed by this section shall be in addition to any
other penalty provided by law.