Penalty Abatement for Non Profit 990’s We can get penalties abated! Because of no fault of the board members or directors tax forms and tax returns do not get filed. I found myself in this dilemma not long ago. An accountant did not file 990 tax returns and the accountant moved and he would not respond to our request to help on a situation he created. This is where I was able to fully resolve the problem. This responsibility belonged to someone else and now you have to deal with the penalties and interest due to someones failure. I cannot tell you how many times this happens.
Most individuals are doing a very kind act serving as a guiding member of a charity or non profit and the next thing you know, you are whacked with penalties and interest from the IRS. This situation will have a damaging effect on the charity or non- profit.
As a member of the board you can ask the IRS to reduce some or all of the penalties and interest they may be assessing. Some of the most common penalties non profits face are: failure to file penalties, failure to pay penalties, late filing penalties. According to the IRS, penalty relief falls into four categories;
Reasonable Cause,
Statutory Exceptions,
Administrative Waiver,
Correction of Service Error.
Most cases involving Not for Profit companies fall under the Reasonable Cause Sections. The IRS does have pity on non- profit corporations.When I worked as a former Agent with the IRS it was part of my job to examine cases for the possible abatement of these penalties. There is a specific avenue to take when asking IRS for this request. Follow some of these tips:
1. Have your case fully documented
2. Get supporting affidavits from other individuals involved with the problem.
3. Sign your affidavit under penalties of perjury, look more official
4. Make sure the time line of the failure to preform matches the penalty period.
It would be in your best to hire Fresh Start Tax and let former IRS Agents resolve this matter. It will be money well spent. See our home page and contact me directly.
I am a former IRS agent and have been asked this question hundreds of times through the internet and in forums I teach. I have processed hundreds of Offers in Compromise. You may file as may Offers in Compromise as you wish. Have at it!
As a matter of fact, if the first Offer in Compromise gets rejected, use the information on why they rejected the Offer, fix the problem and send it in again. More than 75% of the time, the second Offer is accepted.
Without question former IRS Agents, Revenue Officers can save you a lot of time and money to get your OIC through the first time. Beware, Caution, Beware,Caution…. The IRS may keep the money you sent in the first time, so if rejected you could lose your money. It’s best to contact a tax professional.
Know Your Rights
You have rights as a taxpayer when dealing with the IRS.
* Publication 1, Your Rights as a Taxpayer
* Protecting Taxpayer Rights, Fact Sheet
* The Taxpayer Bill of Rights 2, as passed by Congress
* Taxpayer Bill of Rights II, IRS Training Publication
* Low Income Taxpayer Clinics , Access to Representation Your Civil Rights Are Protected
Under no circumstances will the Internal Revenue Service tolerate discrimination by its employees, grantees, contractors, and/or subcontractors. NO ONE shall be excluded from participating in, be denied the benefits of, or be subject to discrimination because of: race, color, sex, national origin, disability, reprisal, or age in programs or activities funded by the Department of Treasury – Internal Revenue Service.
Taxpayer Advocate Service The Taxpayer Advocate Service (TAS) is an IRS program that provides an independent system to assure that tax problems, which have not been resolved through normal channels, are promptly and fairly handled.
Notices What should you do if you receive a notice from the IRS?
* Understanding your notice
* Topic – IRS notices Your Rights to Representation
Learn more about granting power of attorney.
You are entitled to similar protection of confidentiality with respect to tax advice given by a federally authorized tax practitioner as with an attorney.
Every taxpayer is entitled to have access to representation. The Low Income Tax Clinic grant program is designed to help accredited academic institutions and non-profit organizations provide low to no-cost tax assistance (such as representing the taxpayer during an audit or tax collection effort) and/or tax outreach to taxpayers for whom English is a second language. Click here for IRS Grant Program Information. Examination
We accept most taxpayer’s returns as filed. If we inquire about your return or select it for examination, it does not suggest that you are dishonest. The inquiry or examination may or may not result in more tax. To learn about your rights during the examination process, and for information about how audits are conducted;
* Examination of Returns, Appeal Rights, and Claims for Refunds – Publication 556
* Market Segment and Specialization Program (MSSP) Appeal Rights
It is your right to appeal any action taken by the IRS to change your account.
* Topic – Your Appeal Rights
* Appeals Division Collection Process
Learn about the process IRS may follow to collect overdue taxes, including a summary of your rights and other important information about the collection process.
* Pub 594, The IRS Collection Process
* Topic: Tax Collection
* Frequently Asked Questions
* Collection Financial Standards
* Form 9465 – Installment Agreement Request Innocent Spouse
The Reform Act of 1998, broadened the relief from joint liability available to spouses who file joint returns.
Fresh Start Tax is comprised of Former IRS Agents, Managers and Instructors. The staff also includes CPA’S, tax attorneys and former Managers with the Department of Revenue. Our company are experts in the field of tax and tax resolution. We are licensed to practice in all 50 States. We are fast, affordable and put a premium on communication with our client. Our firm has the highest rating given out by the Better Business Bureau. We have a combined 140 years Federal and State experience.
IRS Distributions, Early IRA Withdrawals 10% Additional Tax Question: How do I calculate the minimum amount that must be withdrawn from my IRA after age 70 1/2? Answer: Chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs), gives a complete explanation of how to calculate this amount. As a general rule, follow these guidelines:
The minimum distribution for each year is computed by dividing the IRA account balance at the close of business December 31 of the preceding year by the life expectancy. The life expectancy is determined by using one of three tables found in IRS Publication 590. You will find the applicable tables below:
Table I will be is used by beneficiaries when there is a sole owner.
Table II will be used for use by owners who have spouses who are more than 10 years younger.
Table III is generally for use by unmarried owners and owners who have spouses who are not more than 10 years younger and owners whose spouses are not sole beneficiaries. Note that federal lawmakers waived the 2009 minimum distribution requirement and, as a result minimum distributions for tax year 2009 are not required. Call us for any questions, or check the IRS. Gov website.
Wish I had a dollar for every time some asked me this question. Will IRS Abate my Interest?
Let’s finds out what the IRS Code Section says about the issue.
The law requires the Internal Revenue Service to charge” interest” on any tax that is not paid by the return due date under Internal Revenue Code Section 6601. The IRS Restructuring and Reform Act of 1998, however, requires the Internal Revenue Service to notify taxpayers of the proposed discrepancies of their tax returns within a 18 months of the original filing date in order to charge” normal interest”. IRS has to adjust the interest charge if they make initial contact after that period of time .
The federal law allows the Internal Revenue Service to reduce or remove interest on tax increases attributable to errors or delays we made in the performance of ministerial acts (Tax Reform Act or 1986 – Ministerial Act provision).
The key question to be answered is what is a “ministerial act”. A ministerial is a procedural, mechanical, or processing act that does not involve the exercise of judgment and occurs even though you did everything we required you to do. If you believe you qualify for abatement of interest based on this provision, you should include your reasons in your response if you are trying to abate interest.
The law does not permit the Internal Revenue Service to reduce or remove interest for reasonable cause. Reasonable cause only applies to penalties and refers to an acceptable explanation of circumstances that prevented you from paying the tax when it was due.
The bottom line, unless you can prove that the IRS did something extraordinary to delay the processing of your case, you have a little chance of getting the abatement of interest. It is not that they do not wish to help, the law does not allow them to do otherwise.
Before you start getting all excited about getting your Offer in Compromise accepted, understand the process. Depending on what IRS office works your case, the time issue will change how fast your case is worked and closed.
For example, 92 percent of offers processed by our Centralized Offer in Compromise sites are currently closed within six months or less. Holtsville NY is the primary center 72 percent of offers worked in our field groups are currently closed in nine months or less (this is up from 59 percent in 2005).
Hiring a solid tax resolution company will move your Offer through much quicker. As former IRS Agents, we know the people to call.
Let Fresh Start Tax 1-866-700-1040 take care of your problem.
