Certain arguments made by taxpayers in the past have been determined to have no validity in the law and, thus, are deemed to be “frivolous.” As such those who continue to advance them can be subject to a penalty of $5,000. There is an IRS list of 46 frivolous arguments. New to the list are the following:
Reporting income when actually or constructively received and deducting expenses when paid. Certain businesses may not use the cash method.