Hey Josh,
Thank you for reaching out to us!
By default, users are not able to create new categories/tags from the front end form with Community Events.
I would recommend proposing this feature in our User Voice page to let us know.
Other users can then up-vote it, giving us a great idea of how much demand there might be (or, if you can find a suitable existing request, you can in turn up-vote that).
If you have any other questions at all please feel free to let me know and I’d be happy to help as best I can!
Cheers,
Patricia