Guides

Tax Court's $25,000 Frivolous-Position Penalty: The IRC 6673 Guide

The Tax Court can add up to $25,000 to your bill for a frivolous position or a case run for delay. What triggers IRC 6673, what does not, and how to avoid it.

Liam Williams

Liam Williams

— 35 min read
Share

Somewhere in the IRS's answer to your petition, in a letter from the IRS attorney, or in an order from the judge, there is a sentence that mentions "section 6673" and "$25,000." Or you have not filed yet, and you are thinking about filing a petition mainly because it stops the IRS from assessing and collecting for a while.

Either way, this is the guide. IRC Section 6673 is the one provision in a Tax Court case that can make your bill bigger than the notice of deficiency, and it works differently from every other penalty on this site: the judge decides it, not the IRS, and it goes into the court's decision. The filing fee is $60; the exposure here is $25,000.

Two things get people here. The first is the one everybody has heard of: arguing that wages are not income, that the tax is voluntary, that you are not a "person" the Code reaches.

The second is quieter, and it catches ordinary petitioners with ordinary disputes: running the case in a way the judge reads as delay. Continuances obtained on a promise you do not keep, records you say exist but never produce, refusing to talk to the IRS attorney, filing papers about anything except the tax. In a September 2026 opinion the court penalized a petitioner who did not dispute his income and whose contested merits issue came down to missing receipts, because his conduct "when viewed in the aggregate" was "primarily for delay." That trap gets as much room here as the tax-protester one.

Keep it in proportion. The National Taxpayer Advocate's 2025 Annual Report to Congress ranks the frivolous-issues penalty as the ninth most frequent issue in Tax Court opinions for individual taxpayers in FY 2025, tied with the fraud penalty at 8 opinions. In courts of appeals opinions for individual taxpayers that year it was the most frequent issue, in a tie, at 6 of 46. For scale, over 16,000 petitions are filed in a year. If you have a genuine dispute and you run the case normally, this penalty is not aimed at you.

The Tax Court does not publish how many penalties it imposes, so the NTA's opinion counts are the only public measure, and they undercount: the category bundles § 6673 with the appellate sanctions and counts only opinions that reached the merits, not bench opinions or orders. Around 89% of petitioners represent themselves, and every penalized petitioner in the 2025 and 2026 opinions cited below did, one of them a tax lawyer.

Where To Start, Depending on What You Are Holding

What Section 6673 Is

The statute is short. Section 6673(a)(1) provides:

Whenever it appears to the Tax Court that—
(A) proceedings before it have been instituted or maintained by the taxpayer primarily for delay,
(B) the taxpayer's position in such proceeding is frivolous or groundless, or
(C) the taxpayer unreasonably failed to pursue available administrative remedies,
the Tax Court, in its decision, may require the taxpayer to pay to the United States a penalty not in excess of $25,000.

Four things follow from the text alone.

Three independent triggers. Delay, a frivolous or groundless position, or an unreasonable failure to use the IRS's own remedies (an Appeals conference, or a collection due process hearing) before litigating. Any one is enough. Trigger (C) is the least used: the 2023-2026 opinions cited in this guide all rest on (A), (B), or both, and we found no recent opinion resting on (C) alone. It is still live, but read the word "unreasonably." Petitioning straight from a notice of deficiency without asking for an Appeals conference first is routine, and Chief Counsel generally refers a docketed case to Appeals after the answer anyway (How To Settle Your Tax Court Case covers that referral), so skipping a pre-petition conference is not by itself trigger (C). It is meant for the petitioner who had a real administrative route open, such as a CDP hearing, and refused it without reason.

"May," and "not in excess of." The penalty is discretionary and there is no minimum. In the 2025-2026 cases in the table below, the amounts start at $1,000.

Per taxpayer, per case. The $25,000 is a ceiling for each case, not a lifetime total, and a petitioner with several dockets can be penalized in each. In Nis Family Trust v. Commissioner, 115 T.C. 523 (2000), discussed below, the court imposed $25,000, $5,000 and $500 across three dockets, and the IRS's own summary of the case law describes a 2014 memorandum opinion imposing $25,000 "for each of the taxpayer's consolidated cases." For spouses or other co-petitioners on one petition, the IRS's litigation manual tells its attorneys that separate penalties "should not be asserted against each of the petitioners in the absence of compelling evidence," and that an aggregate above $25,000 against multiple petitioners needs the advance approval of the Associate Chief Counsel.

"In its decision." The penalty is part of the Tax Court's decision, entered by the judge. It is not an IRS assessment that the court reviews. The IRS's own manual says so: under IRM 20.1.10.8.1.2, "The IRS does not assert the IRC 6673(a) penalty," and per IRM 8.20.7.22.10 a section 6673(a)(1) penalty "is not asserted against the taxpayer in any notice issued by the IRS."

"Whenever it appears to the Tax Court." The court can act on its own, with no request from the IRS. In Leyshon v. Commissioner, T.C. Memo. 2015-104, a pro se case, the court explained: "The statute does not by any means make the IRS the gatekeeper of this issue but rather authorizes the penalty '[w]henever it appears to the Tax Court that' the litigation is frivolous or dilatory." The court has imposed the penalty on its own motion at the end of a trial (Rader v. Commissioner, 143 T.C. 376 (2014)) and in a later case where the IRS raised the possibility but never moved (Rader v. Commissioner, T.C. Memo. 2017-209).

A Short History

Congress created the penalty in 1954 as "damages" of up to $500 for a proceeding brought "merely for delay." The 1982 amendments raised the cap to $5,000 and added the frivolous-or-groundless trigger; 1986 added trigger (C); and in 1989 Congress raised the cap to $25,000 and renamed the award a "penalty." (The amendment history is on the "Notes" tab of the Cornell page, not the default view.) The cap has been $25,000 since 1990 and has never been indexed for inflation.

Supervisory Approval Does Not Apply

If you have read The Penalty Defense That Costs You Nothing: § 6751(b), do not reach for it here. In Williams v. Commissioner, 151 T.C. 1 (2018), a pro se case, the court held that the written-supervisory-approval requirement of IRC Section 6751(b)(1) "was not intended as a broad restraint mechanism on the Federal judiciary" and "does not apply to the Tax Court when it imposes penalties under section 6673(a)(1)." A judge's decision needs no IRS supervisor's signature.

Section 6673(a)(2) Is for Lawyers

Subsection (a)(2) is a separate sanction on "any attorney or other person admitted to practice before the Tax Court" who "has multiplied the proceedings in any case unreasonably and vexatiously." It is measured by the excess costs the conduct caused, not by a fixed cap, and it does not apply to a self-represented petitioner. It matters to you in one way: hiring someone to make a frivolous argument does not move the risk off you.

Frivolous, Groundless, or for Delay: What the Words Mean

The standard definition comes from the Seventh Circuit in Coleman v. Commissioner, 791 F.2d 68 (7th Cir. 1986): "A petition to the Tax Court, or a tax return, is frivolous if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law." Both halves matter. An argument is frivolous only if it runs against established law and offers no reasoned case for changing it.

The test is objective. Coleman again: "The inquiry is objective. If a person should have known that his position is groundless, a court may and should impose sanctions." And on sincerity: "An obtuse belief--even if sincerely held--is no refuge, no warrant for imposing delay on the legal system and costs on one's adversaries." Believing the argument is not a defense. The Tax Court adopted the Coleman test word for word in Nis Family Trust v. Commissioner, 115 T.C. 523 (2000) and has applied it ever since.

Groundless is the plainer word. In Delgado v. Commissioner, T.C. Summary Opinion 2023-8, the court gave the dictionary meaning: "'Groundless' means 'lacking a basis or a rationale.'" (A summary opinion comes from a small tax case and is not precedent under IRC Section 7463(b); it is cited here for the definition and, later, for its facts.)

Delay is about you, not the argument. Coleman drew the line between the two main triggers: the "primarily for delay" test "is a subjective inquiry, the latter is objective; either will support a penalty." A perfectly non-frivolous position can still draw the penalty if the judge concludes the case was brought or kept going mainly to put off paying. The word doing the work is "primarily." A genuine dispute does not turn into delay because you are also glad the assessment is on hold; the question is what the case is mainly for, and the judge answers it from how you run it. That is the delay trap, covered below.

The purpose behind all three, in the Tax Court's standard sentence from Takaba v. Commissioner, 119 T.C. 285 (2002), citing Coleman: "The purpose of section 6673 is to compel taxpayers to think and to conform their conduct to settled principles before they file returns and litigate."

Is Your Argument on the List?

There is a list, in two places, and it is worth checking before you file anything.

The IRS's "Truth About Frivolous Tax Arguments"

The IRS maintains a document called The Truth About Frivolous Tax Arguments (the current edition is dated March 2022; the page was last reviewed in October 2025). Section I groups the general arguments into five categories, each followed by the case law rejecting it; Section II covers the arguments made in collection due process cases; Section III covers the penalties, including this one.

Read its own warning about its limits: "This document, including the relevant legal authorities cited, is not intended to provide an exhaustive list of frivolous tax arguments. Merely because a frivolous argument is not included in this document does not mean that it is not frivolous."

Notice 2010-33

For the sibling penalty on frivolous returns and submissions (covered below), IRC Section 6702(c) requires the IRS to publish a list of positions it has identified as frivolous. The current list is Notice 2010-33, with 46 numbered positions, and as of September 2026 no later notice has replaced it. It is sixteen years old, and its own catch-all extends it: positions "which on their face have no basis for validity in existing law, or which have been deemed frivolous in a published opinion of the United States Tax Court or other court of competent jurisdiction" are treated the same way. So the courts' published opinions are part of the list.

The Recurring Losers

Every one of these has been rejected in published opinions, usually many times. All appear either in the IRS document or in the cases cited in this guide:

  • Wages, salaries or compensation for services are not "income."
  • The taxpayer is not a "person," "individual," "citizen" or "taxpayer" within the meaning of the Code, or is a citizen of a state and not of the United States.
  • Only federal employees, residents of the District of Columbia, or people with "foreign" income owe tax (the "861 argument," rejected in Takaba).
  • The income tax is voluntary; the Sixteenth Amendment was not properly ratified; the tax is an unconstitutional direct tax.
  • The IRS or the Tax Court is a private corporation, or the Thirteenth Amendment forbids the tax.
  • "Show me the law," demands for a signed assessment certificate, or demands for the birth certificates, oaths or credentials of the judge and IRS staff.
  • Payment by "bonded promissory note" or other invented instruments.
  • Demands for enormous sanctions against the IRS as a substitute for a merits argument.

Why the Court Will Not Argue With You

If you raise one of these, do not expect a reasoned rebuttal. In Wnuck v. Commissioner, 136 T.C. 498 (2011), a pro se wages case, the Tax Court devoted an opinion to explaining why it usually declines to refute frivolous anti-tax arguments point by point, invoking the Fifth Circuit's line from Crain v. Commissioner, 737 F.2d 1417 (5th Cir. 1984), which it quotes in two places: "We perceive no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit." Its reasoning: the supply of such arguments is effectively unlimited, answering one only invites the next, and anyone willing to do even basic internet research would find the authorities rejecting them.

The court had imposed $1,000 in its bench opinion at trial. When Mr. Wnuck asked it to vacate the decision and reconsider, repeating the same arguments, it denied reconsideration and raised the penalty to $5,000.

The same expectation of basic research applies to non-lawyers. In Fonda v. Commissioner, T.C. Memo. 2025-60, the court said of a pro se petitioner: "Although he is not a lawyer, had he made even a modest inquiry using an internet search engine he would have found the copious authorities refuting his stance." The penalty was $7,500.

One modern variant deserves its own warning: arguments or citations generated by an AI tool and filed without checking them. Tax Court Calls Out AI-Fabricated Citations. Pro Se Filers Are Next. covers the court's response, and every filing you sign carries the Rule 33(b) certification discussed next.

What Is Not Frivolous

This is the section most readers need. Losing is not frivolous. Being wrong is not frivolous. The primary sources draw the line clearly.

Rule 33(b). When you sign a petition or any other pleading, you certify that "to the best of the signer's knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; and that it is not presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation." A good-faith argument to change the law is expressly allowed. That is the Rule's version of Coleman's "reasoned, colorable argument."

Weak is not frivolous. The Fifth Circuit in Crain, the same opinion the courts quote for refusing to engage, was careful to add that the courts must stay open to everyone who invokes the law in good faith, and that an appeal lacking merit is not always, or even often, frivolous.

Missing receipts are not frivolous. In Sprouse v. Commissioner, T.C. Memo. 2026-80, decided September 2, 2026, the court said it directly: "Lack of substantiation alone does not warrant a section 6673 penalty." Mr. Sprouse was penalized for other reasons, covered below, but not for losing his deductions.

The IRS's own restraint rule. The Chief Counsel Directives Manual, the instructions to the IRS attorneys who litigate in Tax Court, tells them in CCDM 35.10.2.1.1: "where a case raises new issues or raises them in a novel way, or where a case raises a colorable claim in good faith, the penalty should not be claimed." The same section says the IRS "must avoid taking any position that may have the appearance of an attempt by the Service to inhibit or discourage citizens from resorting to the courts when they are in good faith raising a colorable challenge to the Commissioner's determination," and that "the penalty should not be claimed in any case where there is doubt as to whether the facts warrant the penalty."

Making the IRS prove its case is not frivolous. In Wheeler v. Commissioner, 127 T.C. 200 (2006), the pro se petitioner was penalized $1,500 for frivolous liability arguments, yet in the same opinion he defeated two additions to tax because the IRS failed to meet its burden of production. The court noted that "his success is not attributable to any meaningful effort on his part," but the additions still fell. Holding the IRS to its burden (Burden of Proof in Tax Court) is legitimate litigation; it just does not cancel out frivolous arguments made alongside it.

A real dispute with a bad argument attached. Leyshon lists as one of its amount factors that "a taxpayer whose only arguments are frivolous may be deserving of a greater penalty than a taxpayer who had a bona fide dispute but tacked on frivolous arguments." That is leniency on amount, not immunity; the same passage says a taxpayer with a real dispute is not immune from the penalty.

A Working Contrast

Ordinary positions, even when they lose Positions the courts have called frivolous
"I had reasonable cause for filing late" (the § 6651 guide) "I was not required to file because the tax laws do not apply to me"
"The unreported income figure is wrong; here are my bank records" "The deposits are not income because wages are not income"
"My child lived with me more than half the year" "I am not a 'person' or 'individual' under the Code"
"The IRS's substitute for return does not meet § 6020(b)" (a winning argument in Cabirac v. Commissioner, 120 T.C. 163 (2003) and in Wheeler, sitting next to a penalized liability argument in each) "The IRS is a private corporation with no authority"
"The regulation's plain text supports my reading" "Show me the law that makes me liable"
"The court should reconsider its precedent, and here is why" "The Sixteenth Amendment was never ratified"
"The IRS did not meet its burden of production on the penalty" "The judge and the IRS attorney must produce their oaths and birth certificates"

The left column can lose every time and never draw a penalty. The right column has drawn penalties or warnings in every case in this guide where it appeared.

The Delay Trap for Ordinary Petitioners

Trigger (A) needs no frivolous argument. It asks whether the case was "instituted or maintained by the taxpayer primarily for delay," and the court answers by looking at how you ran the case. Decided cases show what that means in practice.

Sprouse: Delay Without a Protester Argument

Mr. Sprouse, representing himself, faced a $217,478 deficiency from unreported income and unsubstantiated rental deductions. On the merits the case was ordinary: he did not dispute the unreported income, he lost the deductions for lack of records, and the accuracy-related penalty was sustained. The § 6673 penalty came from conduct:

  • He refused to take part in a Branerton conference (the informal exchange of facts and documents before trial, described in What Happens After You File Your Tax Court Petition) or in settlement talks until he had a lawyer.
  • The court granted continuances on the understanding that he was looking for one. In his third motion for continuance he "stated that he did not begin looking for counsel until August 2025."
  • He filed a "Notice of Discovery Demand" seeking birth certificates for "the clerk of court, the judge, and any of the DOJ staff employees."
  • At trial he said records existed that would support his deductions; the court held the record open for two weeks after trial so he could file them. He filed none. Instead he filed a document purporting to rescind his signature from his amended return and a document styled as an application for a writ of prohibition.

The court's conclusion: "Petitioner prolonged the proceedings without good cause and lacked candor with the Court," and "when viewed in the aggregate, petitioner's conduct was primarily for delay." The penalty was $2,500, with a warning that frivolous positions or unnecessary delay in any future appearance "may result in a higher penalty."

The Conduct Catalogue

Leyshon's list of factors includes one, labelled "Burden," that reads like a list of what not to do. A taxpayer "who refuses to communicate with his opponent or with the Court, or who refuses to admit or to stipulate facts that he later is unable to dispute, or who resists a well-grounded motion by means of sham disputes of fact that later prove meritless, or who files frivolous motions of his own" consumes resources the court will count against him.

Each item has a case behind it:

  • Refusing to stipulate and ignoring orders. In Goff v. Commissioner, 135 T.C. 231 (2010), a pro se collection case, the court listed the conduct: "she refused to enter into a stipulation of facts and disobeyed our order to submit a pretrial memorandum. She did not comply with the briefing schedule we set." It could "see no reason for this case other than delaying respondent's collection of tax liabilities and penalties for the 11 years in issue," and imposed $15,000. Refusing to stipulate is handled first through the deemed-admission procedure in Rule 91(f) (The Stipulation of Facts in Tax Court: Rule 91 Explained); it becomes § 6673 material when it is part of a pattern. Skipping the pretrial memorandum the standing pretrial order requires is the same kind of evidence.
  • Not cooperating on the numbers. In Rader, 143 T.C. 376, the petitioner would not "cooperate with respondent in reconstructing the income from his plumbing business," and his testimony and brief were "consistent with an intent to delay the collection of income taxes due and owing." The court raised the penalty on its own at the end of trial: $10,000.
  • Process arguments with no merits case. In Delgado, the petitioners (who were represented) disputed a $5,795 CP2000 deficiency purely on procedural grounds. The court found they had "no arguments on the merits" and ordered them to show cause why it should not penalize them "for instituting or maintaining this proceeding primarily for delay by advancing groundless process-related arguments."
  • Motions after you have lost. In Wnuck, the court explained that a motion to vacate its decision had the effect of pushing back the deadline for a notice of appeal, and with it the date the IRS could assess the tax, and it treated the motion as filed primarily for delay as well as frivolous. A post-decision motion that repeats what the court already rejected is delay in its purest form.
  • Continuances on a promise. Takaba noted that the petitioner "has delayed this case by asking for a continuance after having been warned accurately by respondent's counsel that his arguments were frivolous." Sprouse adds continuances obtained to find counsel that nobody was looking for. The standard for continuances is in Common Tax Court Motions and How To Respond.

Filing Just To Stop the Clock

A timely petition does suspend assessment and collection under IRC Section 6213(a) for as long as the case is pending (How IRC § 6213 Protects You While Your Tax Court Case Is Pending). That protection exists for people with something to litigate. A petition filed within the 90 days window with no dispute behind it, followed by silence, is the textbook case of trigger (A). It usually ends in a dismissal for failure to prosecute under Rule 123(b), which operates as a decision against you on the merits, with the penalty request riding on the same motion.

If the number is right and the problem is that you cannot pay it, the Tax Court is the wrong tool: a petition with nothing behind it ends in a decision against you, not a deferral. The collection alternatives exist for that situation: an installment agreement, currently not collectible status, or an offer in compromise, compared in How To Resolve Your IRS Tax Debt. If you do have a dispute, How To File Your Tax Court Petition is where to start, and the case then has to be run, not parked.

How the Penalty Actually Gets Raised

You will see it coming, in one of five ways. The IRS's playbook is public, in CCDM 35.10.2.1 and 35.10.2.1.1.

  1. In the answer, or an amended answer. The CCDM says the claim "should be affirmatively pleaded at the earliest possible time." If the answer asks for a § 6673 penalty, the IRS's position is that Rule 37 requires you to file a reply. Rule 37(a) gives you 45 days from the date of service of the answer to reply, or 30 days to file a motion directed at the answer; if you do neither, the IRS will move under Rule 37(c) to have the factual allegations supporting the penalty deemed admitted. Deny the facts you dispute, specifically. What Happens After You File Your Tax Court Petition walks through the reply.
  2. By written motion, attached to a dispositive motion. A written motion for the penalty "must be made in conjunction with another dispositive motion, such as a motion for judgment by default or dismissal for failure to prosecute, a motion for summary judgment, or a motion to dismiss for failure to state a claim upon which relief can be granted." So the penalty request arrives with a motion that could end your case (Common Tax Court Motions and How To Respond explains how to answer each). In Cabirac the IRS moved for sanctions before trial; in Sullivan v. Commissioner, T.C. Memo. 2025-92, it asked for the penalty alongside summary judgment.
  3. Orally, at calendar call or trial. "An oral motion may be made at a calendar call." In Wheeler, Williams and Supinger v. Commissioner, T.C. Memo. 2025-93, the request came at trial. What To Expect at Your Tax Court Trial covers the day itself.
  4. By the court's own order to show cause. An order to show cause directs you to explain, in writing or at a hearing, why the court should not do something. In Leyshon and Delgado the court issued one on the penalty without any IRS request.
  5. Before you ever file. The CCDM allows IRS attorneys to warn a taxpayer "at the prepetition stage," for example "in a letter sent with the statutory notice of deficiency," and to send letters referring to prior cases where a petitioner "continues to assert frivolous arguments." In Williams, IRS counsel sent two written warnings before trial, then moved at trial. If a warning arrived with your 90-day letter, it counts.

What a Warning Looks Like

The court's warnings are not subtle. In Fonda, a September 2024 order denying a discovery motion warned that if the petitioner continued "to maintain a frivolous or groundless position or continue[d] to maintain this proceeding primarily for delay, ... this Court may impose the maximum section 6673 penalty," and the court "reiterated that warning on two subsequent occasions." In Morino v. Commissioner, T.C. Summary Opinion 2024-12, a non-precedential small-case opinion, the court issued a written order after a conference call directing the petitioner's attention to section 6673(a), then interrupted the trial to warn him again. In Christiansen v. Commissioner, T.C. Memo. 2025-67, the warning was in the order accepting the case for decision on stipulated facts.

If "section 6673" appears in any order in your DAWSON docket, the court is telling you something.

Who Has To Prove It

A penalty claim is "new matter," so under Rule 142(a) the IRS bears the burden of proof on it. The CCDM tells its attorneys that "the respondent must be prepared to discharge the burden of proof in every case in which the penalty claim is asserted," while noting that the standard "is not as high as that in a fraud case" and that the amount is for the court alone. The penalty issue also "may be compromised in the settlement of a case": a pending request can be resolved as part of a settlement, and the CCDM requires the decision document to say either that there is no penalty due or that there is one, in a stated amount.

The Warning-First Pattern and What To Do When Warned

Here is the most useful fact in this guide: the Tax Court very often warns before it penalizes, and stopping after the warning has, in case after case, meant no penalty at all.

Warned and Spared

  • Pierson v. Commissioner, 115 T.C. 576 (2000), the case that first held the penalty available in a collection due process case, declined to impose it partly because the court had not "previously provided unequivocal warning," and then gave one: "we regard this case as fair warning to those taxpayers who, in the future, institute or maintain a lien or levy action primarily for delay or whose position in such a proceeding is frivolous or groundless."
  • Funk v. Commissioner, 123 T.C. 213 (2004) dismissed the case on the pleadings and said the court "will consider imposing such a penalty should he return to the Court and advance similar arguments in the future."
  • Morino (2024): two warnings inside the case, arguments continued, but "Since this is Mr. Morino's first time proceeding before this Court, we will not impose a penalty now."
  • Thody v. Commissioner, T.C. Memo. 2026-30: frivolous arguments about "income" from a petitioner already convicted of tax evasion, and still, "Because this is Mr. Thody's first case before our Court, we will not impose a penalty at this time."
  • Sullivan and Hillman v. Commissioner, T.C. Memo. 2025-84, both 2025 collection cases, both ended in a warning rather than a penalty, Sullivan even though the IRS had asked for one.

The IRS's own litigation manual for collection due process cases, CCDM 35.3.23, acknowledges the pattern: it tells its attorneys that the Tax Court has in some cases declined to impose the penalty where the taxpayer had no prior warning, and to tell the court about every prior warning when asking for one.

The National Taxpayer Advocate saw the same pattern in its 2018 review of a year of § 6673 opinions: "In three cases, taxpayers prevailed when the IRS asked the court to impose a penalty. In most of these cases, the court warned the taxpayers not to bring similar arguments in the future." It added that the court "can be lenient when it is the taxpayer's first court appearance."

Stopping Works, Even Late

Sanders v. Commissioner, T.C. Memo. 2023-71 involved deficiencies totaling $1,566,802 and fraudulent-failure-to-file additions. The pro se petitioner "repeatedly asserted these arguments despite warnings that he risked a section 6673 penalty" throughout the pretrial stage. Then: "because petitioner refrained from advancing frivolous arguments at trial, this Court will not impose a section 6673 penalty."

Supinger shows both sides of the same mechanic. Mr. Supinger had already been penalized $5,000 in an earlier case, where the court told him that an unequivocal commitment to drop the arguments could reduce the amount. In another of his cases, filed later but resolved first, he filed a motion to dismiss stating, "Petitioner hereby rescinds all frivolous arguments that he has made in the past"; the court "took petitioner's words disclaiming his prior arguments at face value, gave no further consideration to imposing a penalty," and dismissed that case with prejudice.

In the case reported at T.C. Memo. 2025-93, where the IRS had asked for $10,000, he abandoned most of his arguments after a warning at trial but kept one, then ignored a later order inviting him to drop it. He paid $10,000, and the court expressly gave him credit "for abandoning his other frivolous arguments after receiving this Court's warning at trial." A full retraction cost nothing. A partial one cost $10,000.

Leyshon builds the same idea into its factors: a taxpayer who "retracts his frivolous positions and makes a credible undertaking (either on the record at a hearing or in writing in response to an order to show cause or in another filing) to comply with the tax laws in the future" may earn a reduction.

Warnings Travel

A warning does not have to come from this judge in this case. Leyshon: "Such warnings may have come from the IRS, from the Court in a prior case, or from the Court in the case at issue. A taxpayer who ignores or defies such warnings may be deserving of a greater penalty." In Christiansen, the warning that counted was issued in the petitioner's earlier case, thirteen days before he filed his brief in the new one. In Williams, the IRS attorney's two letters counted.

If You Have Been Warned

The cases point to the same short list. It is what the spared petitioners did that the penalized ones did not.

  1. Withdraw the argument in writing. A filing that says you no longer rely on the position and will not raise it again is what Supinger's dismissed case and Leyshon's factor 11 describe. Do it before the next deadline, not after.
  2. Answer the order to show cause on its merits. Mr. Leyshon responded to his show-cause order by re-filing the same arguments. Address the question the order asks: why the penalty should not be imposed.
  3. Stipulate what you cannot dispute. In Aubuchon v. Commissioner, T.C. Memo. 2026-87 that cooperation was the one reason the court gave for not going higher.
  4. Stop the side filings. Motions for reconsideration, recusal, discovery of the judge's credentials, sanctions against the IRS: each is counted as burden.
  5. Put the penalty request into any settlement. The CCDM says the penalty issue "may be compromised in the settlement of a case," and the decision document then states either that no penalty is due or a fixed amount. If you are settling the tax (How To Settle Your Tax Court Case), settle the § 6673 request with it.

Can you just drop the case? Not by itself. Walking away leads to the Rule 123(b) dismissal described above, entered as a decision against you, and a bare dismissal does not answer a pending penalty request. What the court rewarded in Supinger's dismissed case was a motion to dismiss that expressly retracted the arguments; it took the retraction at face value and imposed nothing. If you want out, retract in the same filing.

How the Judge Sets the Amount

Leyshon lists twelve considerations and then cautions that "These 12 facts are not a checklist that the Court has used or must use before imposing a penalty." In reader's terms:

  1. Prior cases. Have you litigated the same thing before?
  2. Prior warnings. From the IRS, from the court in an earlier case, or in this one.
  3. Prior penalties. Did an earlier penalty fail to deter?
  4. Non-frivolous arguments. Did you have a real dispute too, or only frivolous ones?
  5. Protest. Was the case a vehicle for objecting to the tax laws rather than litigating your liability?
  6. Amount at issue. More tax at stake, larger penalty.
  7. Your background. "Someone with less education or sophistication may be less able to discern frivolousness in an argument and less blameworthy"; someone with more education or relevant experience "may be deserving of a greater penalty."
  8. Burden. The conduct catalogue above.
  9. Conduct. Disruptive or contemptuous behavior toward the court.
  10. Other harm. Whether you have already suffered other consequences.
  11. Future compliance. A credible retraction and undertaking.
  12. Punishment and deterrence. Whether the amount will actually change behavior.

Amounts Imposed on Self-Represented Petitioners, 2025-2026

Case What raised or lowered it Penalty
French v. Commissioner, T.C. Memo. 2025-57 Warned at a summary-judgment hearing; the court denied the IRS's motion and continued the case so the couple could find counsel; they returned without counsel and repeated the arguments. $1,000, with a warning of "a much more severe penalty" next time
Christiansen (2025) Warned in a prior case and in this one; repeated the arguments in briefs. $1,000, "a greater penalty may be imposed"
O'Connor v. Commissioner, T.C. Memo. 2025-42 A tax lawyer representing himself; eight unfiled years; more than 1,000 pages filed. Lower "because petitioner raised his frivolous arguments only on brief, he did not in this case receive a warning." $2,000
Marin v. Commissioner, T.C. Memo. 2026-79 Stipulated the receipts, argued they were not "income"; warned at trial, then filed a brief repeating the arguments. "Despite multiple warnings, petitioner continued." $2,500
Sprouse (2026) Delay conduct only; no protester argument on the merits. $2,500
Aubuchon (2026) Warned in a prior case and "more than once" at a hearing; "respectful and well spoken" but "unabashed"; stipulated "to the fullest extent" and submitted the case on stipulated facts. $5,000, "his final warning"
Fonda (2025) At least 25 pretrial orders and a discovery hearing; a written warning in September 2024, repeated twice more; arguments continued in motions and at trial. $7,500
Supinger (2025) Prior $5,000 penalty; partial retraction; ignored an order inviting him to drop the last argument. $10,000, warned of "the full $25,000"

The maximum is real. In Nis Family Trust, decided in 2000 against represented petitioners, the court imposed $25,000 in one docket, $5,000 in a second and $500 in a third "on account of instituting and maintaining these proceedings primarily for delay and taking frivolous and groundless positions," and ordered counsel to pay $10,643.75 under (a)(2). Aubuchon cites per curiam Fifth Circuit decisions from June and July 2026 affirming $25,000 penalties against one repeat litigant. And the same National Taxpayer Advocate 2018 review found that the courts of appeals had upheld every § 6673 penalty in the cases it analyzed since June 2005.

Three patterns run through the amounts:

  • Education raises it. Aubuchon (a Stanford doctorate and several companies founded), O'Connor ("Those with specialized expertise should expect that we may hold them to a higher standard"), Hillman (a warning that notes the petitioner's "legal education").
  • Cooperation and courtesy lower it. Aubuchon: "We decline to impose a higher amount for one reason. Petitioner's cooperation with respondent in stipulating 'to the fullest extent,' see Rule 91(a)(1), and agreeing to submit these cases fully stipulated under Rule 122 tempers our view of his otherwise exasperating conduct." Wheeler: "we recognize that petitioner was courteous at trial and that he made a flawed attempt to cooperate."
  • No warning in this case lowers it; ignoring one raises it. O'Connor and the 2017 Rader opinion were both reduced because no in-case warning was given; Rader notes that the $2,000 "is less than the prior sec. 6673(a)(1) penalties" for that reason and because the IRS never moved. Wnuck went from $1,000 to $5,000 for repeating the arguments after the warning.

After the Decision

The penalty is entered "in its decision," so it appears on the decision document, above the judge's signature. The CCDM's model language: "That there is a penalty due from petitioner pursuant to I.R.C. § 6673(a)(1) in the amount of $[amount]."

Assessment. Section 6673 sits in the Code's subchapter on assessable penalties, and IRC Section 6671(a) provides that such penalties "shall be paid upon notice and demand by the Secretary, and shall be assessed and collected in the same manner as taxes." After the decision, IRS staff assess it from a copy of the court's order (IRM 20.1.10.8.1.2: "Assessed and collected in the same manner as tax," under penalty reference number 643). It is posted to a civil-penalty account (MFT 55 for individuals, per IRM 8.20.7.22.10), dated to the month of the court's order, and, in the words of IRM 20.1.10.8.1.1, "not tied to the tax years before the Court." If you pull your transcripts looking for it, ask for the civil-penalty module; it will not be on the income-tax account for the years you litigated.

Collection. IRM 25.3.5.5 says there is no assessment deadline for a § 6673(a) penalty, but that "an assessment must be made before administrative collection actions (e.g., filing a Notice of Federal Tax Lien or issuing a levy) can be taken." Once assessed it "may be collected, upon notice and demand, as a tax," with the normal 10 years collection statute running from the assessment, and the ordinary tools apply: liens and levies. Because it is collected in the same manner as a tax, the ordinary collection alternatives apply to it as they would to an assessed tax, even though abatement does not: an installment agreement, currently not collectible status, or an offer in compromise. How To Resolve Your IRS Tax Debt compares them.

No abatement. IRM 20.1.10.8.1.3, titled "Penalty Relief," is one sentence: "The taxpayer must take a judicial appeal to the appropriate court." There is no reasonable-cause request, no First Time Abate, no Form 843 for this penalty, because the IRS did not impose it. Everything in How To Request IRS Penalty Abatement is beside the point here. Asking the same judge to reconsider is not a route either: in Wnuck, a motion to vacate that repeated the rejected arguments raised the penalty from $1,000 to $5,000.

Interest. Under IRC Section 6601(e)(2)(A), interest on an assessable penalty runs "only if such assessable penalty ... is not paid within 21 calendar days from the date of notice and demand therefor," and then only from the notice-and-demand date. Read literally, that means paying within 21 days of the IRS's bill avoids interest on the penalty entirely, and interest never runs from the decision date. (That is the statute's rule for assessable penalties generally; we found no IRS guidance addressing § 6673 specifically.) The notice and demand is the IRS's first bill after assessment; What Happens After Your Tax Court Decision explains when to expect it, and How Interest Works on Your IRS Tax Debt covers the interest rules generally.

Appeal. The penalty is part of the decision, so it goes up with the rest of the case under IRC Section 7482(a)(1), and the courts of appeals review it deferentially, for abuse of discretion. Two cautions.

First, § 7482(c)(4) lets the appeals court add a second penalty where the appeal itself "was instituted or maintained primarily for delay" or the position on appeal "is frivolous or groundless." What Happens After Your Tax Court Decision covers that provision and the appellate sanctions rule.

Second, if you elected small tax case procedures, the decision cannot be appealed at all under § 7463(b), so an S-case penalty has no review route. The penalty still applies there: the court considered one and issued a warning in Morino, an S case, and the CCDM says it "may be raised in 'S' or regular cases." Small Case or Regular Case: Which Should You Choose? weighs that trade. For an S-case petitioner, the retraction before decision described above is the only lever there will ever be.

The Sibling Penalty: Section 6702 and Collection Due Process Cases

A different penalty with a similar name causes constant confusion. IRC Section 6702 is the IRS's penalty, assessed without any court: $5,000 for a frivolous return under § 6702(a), and $5,000 for a "specified frivolous submission" under § 6702(b), which covers a CDP hearing request, an installment agreement application, an offer in compromise, or a taxpayer assistance order request that is based on a listed position or "reflects a desire to delay or impede the administration of Federal tax laws."

Section 6702(b)(3) gives a way out: if the IRS notifies you that a submission is frivolous and you withdraw it within 30 days of the notice, the submission penalty does not apply. Section 6702(d) lets the IRS reduce the penalty where doing so would promote compliance.

§ 6702 § 6673(a)(1)
Who imposes it The IRS, by assessment The Tax Court, in its decision
What it penalizes A frivolous return or submission (CDP request, installment agreement, OIC, TAO request) A frivolous or dilatory court case
Amount $5,000 flat per return or submission (reducible) Up to $25,000, at the court's discretion
Where you fight it Pay part and sue for a refund in district court (in Coleman, the second taxpayer "paid 15% of the penalty and filed suit in the district court"), or in a CDP case when the IRS moves to collect it On appeal from the Tax Court decision

The two meet in collection due process cases. If your CDP hearing request (30 days from the notice; see Collection Due Process Hearings: Your Right To Challenge IRS Liens and Levies) raises a listed frivolous position, three things can happen:

  1. The request can be disregarded. Under IRC Section 6330(g), the IRS "may treat such portion as if it were never submitted and such portion shall not be subject to any further administrative or judicial review," and under § 6330(c)(4)(B) the issue cannot be raised at the hearing.
  2. The levy freeze can be lifted. Section 6330(e)(2) allows a levy to proceed during a Tax Court appeal "if the underlying tax liability is not at issue in the appeal and the court determines that the Secretary has shown good cause not to suspend the levy." The IRS's litigation manual for CDP cases directs its attorneys to consider that motion in levy cases used only as a forum for frivolous arguments or to delay collection.
  3. The § 6673 penalty applies in the Tax Court case. Goff was a CDP case about collecting tax and § 6702 penalties; the petitioner paid $15,000 more under § 6673. Pierson, Sullivan and Hillman, all CDP cases, ended in warnings.

The IRS's Section II page says plainly that the Tax Court "will impose sanctions pursuant to section 6673 against taxpayers who seek judicial relief based upon frivolous or groundless positions" in CDP cases.

If Someone Told You This Argument Works

Some readers arrive here because a preparer, a seminar, a website or a lawyer sold them the argument. It does not help.

In Takaba, the petitioner started pro se, then hired a lawyer who kept making the "861 argument." The court found the petitioner's claimed reliance on professional advice "unsubstantiated," imposed $15,000 on him under (a)(1), and ordered the lawyer to pay $10,500 under (a)(2) because "he both knowingly and recklessly made frivolous arguments, thus unreasonably and vexatiously multiplying these proceedings." The consolidated Nis Family Trust cases, where the $25,000 maximum fell on the individual petitioners, were litigated by counsel, and the lawyer paid costs too. The IRS's Section III page describes a 2014 Tax Court memorandum opinion as holding that the penalty "may be assessed against the taxpayer even when the taxpayer relied on the advice of an attorney."

The lesson is not that professionals are dangerous; it is that the test is objective and attaches to your position, whoever wrote it. A representative who signs your petition also signs the Rule 33(b) certification. If you want to know whether an argument is on the list before you pay for it, an LITC will tell you for free if you qualify. If a representative is running one of these arguments in your case right now, the retraction still has to come from you, in writing, whatever the representative advises (If You Have Been Warned).

What To Do Now

  1. Read every IRS filing and court order for "6673." In DAWSON, check the answer, any motion, and every order. If the phrase is there, treat it as the warning the cases describe.
  2. Test each argument against the two columns above. Ask: does established law reject this, and do I have a reasoned argument for changing it? If the honest answer is "the law is wrong and does not apply to me," stop.
  3. Run the case; do not run out the clock. Take the Branerton conference, exchange documents, stipulate what you cannot dispute, file the pretrial memorandum, and ask for a continuance only for a reason you can document. Sprouse was penalized on conduct alone.
  4. If the answer asks for the penalty, reply within 45 days. Rule 37(a) runs 45 days from service of the answer. Deny the specific factual allegations you dispute so they are not deemed admitted.
  5. If warned, withdraw in writing. Say so in a filing, before the next deadline. Sanders and Supinger's dismissed case show what that buys.
  6. If ordered to show cause, answer the question asked. Address why the penalty should not be imposed, not the argument the court has already rejected.
  7. If penalized, know the routes. No IRS abatement exists. The only review is an appeal of the whole decision, and none at all in an S case. Under the statute's general rule for assessable penalties, paying within 21 days of the notice and demand avoids interest on it.
  8. Get a second pair of eyes before the next filing. The LITC directory is the free option.

Get Help

The penalty exists to sort real disputes from the rest, and the best protection is to have a real dispute and run it like one. If your income is at or below 250% of the poverty line (about $39,900 for a one-person household, plus $14,200 for each additional member) and your dispute is at or below $50,000, a Low Income Taxpayer Clinic can represent you at no cost, and can tell you before you file whether an argument will be treated as frivolous. For paid options, see When and How To Get Professional Help With Your Tax Dispute.

Resources

Statutes:

Tax Court rules:

IRS guidance and data:

Cases cited:

Companion articles on TaxCourtHelp:

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax professional or attorney.

Read more

TaxCourtHelp.com is not affiliated with the United States Tax Court or any government agency. This site provides general information only and does not constitute legal or tax advice.