Are you wondering whether you or your organization has a good
enough excuse for filing your Form 990 late?
Will the IRS will accept your explanation and abate your late-filing penalties.
Following are actual situations where organizations or their CPA's had Form 990
late-filing penalties abated after using my method for writing a letter to
the IRS to have penalties removed. Naturally I give very limited descriptions so as not to give away the
identity of the organizations. Here are a few of the success stories:
Youth Sports Team - This was a new organization that inadvertently overlooked the filing of its
first two Form 990 returns.
Urban Health Clinic - Outside accountant left the country and never completed the bookkeeping
or tax returns for two years.
Low Income Housing Organization - Illness and hospitalization of Treasurer, high turnover of
volunteer financial officers. Multiple years delinquencies. Over $27,000 in penalties abated.
Lodge type organization - IRS said it did not receive any request for extension of time to
file. Organization's outside CPA maintained, successfully, that he/she did file a first extension request but
not the second one. Cited communication problems with the organization and lost mail, in addition to administrative
Music Association - Multiple years penalties. Volunteer responsible for filing Form 990
left without completing it. Missed deadlines. Took nearly a year to correct the delinquency. First abatement
request denied. $10,000 in penalties abated on appeal.
State Bar Association - This organization had an excellent history of filing on time. Turnover
in directors resulted in the return filing date being overlooked. Files damaged by storm compounded the
delay in filing. More than $8,000 in penalties abated.
PTA organization - All-volunteer organization was ignorant of the requirement to file Form
Family Support Center - CFO left the organization without preparing the Form 990 and without
requesting an extension of time to file.
Private Foundation - Didn't realize a separate extension of time to file is required for Form
Religious Education & Community Outreach Organization - Injury, illness and death of
one of the founders interrupted the ability of the organization to meet its filing obligations for several years.
Foreign Missionary Organization - This organization had a good filing history but suffered a
lapse in filing for several years because of a breakdown in communication between the volunteer responsible for the
returns and management. All-volunteer organization. More than $10,000 in penalties abated.
Museum - Multiple years delinquent. Severe financial distress, complete turnover in
directors and a misunderstanding of filing thresholds. More than $60,000 in penalties abated. (That's
right--sixty thousand dollars).
Religious Education Organization - Incompetent CPA failed to file extension requests, prepared
incomplete forms, failed to respond to IRS notices. Multiple years delinquencies. Tens of thousands in penalties
Small Yacht Club - Ignorance of the requirement to file Form 990. Discovered failure to file
when applying for a loan. More than $6,000 in penalties abated.
High School Booster Club - Ignorance of the filing requirement to file Form 990. Multiple years
delinquent. More than $20,000 in penalties abated.
Unknown Type - CPA forgot to file extension request for nonprofit client with previous history
of late filing. Initial request for abatement denied. All penalties abated on appeal.
Private Inner-City School - CPA firm conducting the audit never filed the Form 990 even though
continuing to promise they would. Finally after multiple IRS notices the executive director self-prepared and filed
the return. Late penalties were assessed. Faxed request for abatement was denied. Formal abatement request prepared
using my method resulted in abatement of the entire $20,000 penalty.
The problem most nonprofits and CPA's run into is that they simply don't realize all the reasons or "excuses"
that are available to them when requesting penalty abatement. That's where my nonprofit penalty abatement guidance comes in handy. I help you understand
which facts and circumstances related to your situation will help you argue for reasonable cause, and I help you
tie those facts and circumstances in with the Treasury regulations and published IRS guidance to build the
strongest case possible.
Many of the letters I've reviewed written by other people focus on reasons that the IRS really doesn't care
about, while failing to mention reasons that would almost guarantee abatement of penalties.
Get the information you need to write a successful reasonable cause
letter for your nonprofit.