Certified Fraud Examiner Practice 2025 - Free Practice Questions and Study Guide

The term that describes a tax return that is incorrect or lacks sufficient information is "frivolous tax return." This classification applies when a taxpayer submits a return that either does not contain enough information to support the tax figures provided or is based on arguments deemed by the IRS as without merit. A frivolous tax return might assert deductions or credits that are not applicable or refuse to comply with established tax laws.

This serves as a means for the IRS to identify returns that are not constructed in good faith or follow the necessary legal framework, thereby protecting the integrity of the tax system. The repercussions for submitting a frivolous tax return can include penalties and the potential for further scrutiny from tax authorities.

In contrast, a term like "exempt tax return" would refer to returns filed by individuals or entities that qualify for certain tax exemptions, while "invalid tax return" may suggest a return that cannot be processed due to lack of proper signatures or forms, but it does not specifically address the issue of incorrectness or insufficient information. "Misclassified tax return" implies an error related to the categorization of income or deductions, which may not encompass the broader scope of inaccuracies present in a frivolous return.