Dear Western Friend: In the time since I wrote the article about my frivolous filing penalty with the IRS, there have been some new developments. I would like to share the end of the story. I thought it had ended in August of 2012 when I agreed to pay a $500 penalty instead of the $5000 penalty. I was blue about this, but did feel that it was the best decision considering the situation.
In September 2010, I received a letter from the IRS, which said that I had to pay a “frivolous filing penalty” of $5000 for my action of withholding some of the money I owed for my 2009 taxes. “We have determined that the purported tax return you sent is frivolous and your position has no basis in law.” Frivolous.