Thinking of filing a frivolous tax return? Think again! The recently passed Tax Relief and Health Care Act of 2006 made several changes to the "frivolous tax submissions penalty" (Section 6702). Previously, the penalty for filing a frivolous tax return was only $500 and was not much of a deterrent. The new penalty has been increased from $500 to $5,000. This is a dramatic increase and should serve as a greater deterrent from filing a frivolous tax return. Also, the revised legislation gives the IRS the authority to determine what qualifies as a frivolous return. For more information on the new regulations click
here.