You Can Write a Successful Reasonable Cause Letter to the IRS

Using My Five-Step System

form 990 late filing penalty removal book cover

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You’re probably reading this because you’ve received a penalty from the IRS for filing your nonprofit organization’s Form 990 late.

Maybe you filed late for one year. Maybe you haven’t filed for a couple of years.

The late filing penalties can sometimes be steep enough to put you out of business.

Luckily, the IRS has given you an escape hatch. It’s called “reasonable cause.”

If you can show that you have reasonable cause for filing late, the IRS will waive / abate the penalties. That’s what the law says:

Reasonable Cause Exception

No penalty shall be imposed under this subsection with respect to any failure if it is shown that such failure is due to reasonable cause.


How I Can Help You

I will show you how to develop and structure a letter to the IRS, using their own definitions of reasonable cause, to show how your circumstances demonstrate reasonable cause.

I’ve written, reviewed, or assisted in the writing of hundreds of successful abatement request letters and have developed this 5 step system for writing an effective reasonable cause letter.

Many people will ask “Can’t I just write a letter explaining that we didn’t know we had to file? Now we know, so we won’t be late again.”

Yes, you can write that kind of letter. Sometimes it will work. Sometimes it won’t–especially if there are multiple years involved or if you have a reason for filing late that you aren’t sure will be good enough, or if you can’t articulate a good reason for being late.

Let’s face it, not everyone is good at writing logical, organized, grammatically correct explanations that conform to the IRS definitions of reasonable cause.

If you had confidence in your ability to do so, you probably wouldn’t be here reading this would you?

Don’t you agree that it is better to write a properly structured letter that lays out all the facts and circumstances, quotes the applicable law, and makes it EASY for the IRS to see how you qualify for penalty relief?

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I received the following message via my contact form on January 19, 2011: “Message: $70,000 penalties for not filing for 4 years (2005 thru 2008). What are my chances of getting the penalties dropped?”
I answered her via email and assured her that she had a very good chance. She purchased my ebook.
On April 9, 2011, I received this follow-up email from her: “David, Thank you so much for your help. Please let everyone know that your information is legitimate. I sent the letter I wrote in separate envelopes for each of the years I had penalties 2005, 2006, and 2007. The three together came up to $70,000.00. I received a letter for each one, two were for $10,000.00 each and one for $50,000.00 all were abated. I received all the answers on the same day. Thank you for responding to my email questions before I even bought your book. I was looking for a miracle and I found it in the information you were willing to share at such a reasonable cost. Dorothy.
March 8, 2011 Testimonial
I purchased your publication titled “Form 990 Penalty Relief Manual” a few months ago, and with the help of your publication, we were able to get $46,600 in failure to file penalties waived! This entity was formed about 15 years ago and had never filed a 990. We filed the last three years, one on time and 2 late. This was the penalty on 2 years filed late. (The entity went over the $1mil revenue mark in the second late year, so the penalty max was higher.)
Thanks for your guidance! —from M.H., a professional advisor.

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5 Step System to Writing a Penalty Abatement Letter

With my 5 step system I can save you time and money. I can help you feel confident that you’ve written the best letter you can and haven’t missed any reason that will help you convince the IRS that you deserve abatement.

Isn’t this information available on the internet for free? No, it isn’t. There is SOME guidance on various websites as to how to write a reasonable cause letter. Some of it is fairly good, but incomplete. Some of it is downright wrong and will hurt your chances of success. You can search the web all week and you still won’t find the step-by-step guidance that I give you based on my experience.

How much is your time worth? If you are a really good writer and have some experience with developing an argument based on facts and circumstances and if you carefully study the relevant code sections, you could write an effective reasonable cause letter. But it would take you the better part of a day (or more),  especially if there are multiple years involved and multiple reasons why the returns were late.

And how confident will you be when you’ve dropped that envelope off at the post office (you are using certified mail to the IRS, right?) that you’ve left no stone unturned, no question unanswered?

I’ve been selling my Form 990 Penalty Abatement Manual online as an ebook since 2008. It has helped hundreds of CPA’s, attorneys, and nonprofit directors obtain relief from hundreds of thousands of dollars of IRS late filing penalties. The price of the book had always been $37.

Now I offer even greater value. After fielding hundreds of questions over the last three years, I now want to offer a higher level of guidance to address many of the questions and issues you will encounter when writing a reasonable cause letter. So I’ve developed this website to offer  my printed desk reference, my ebook,  copies of successful letters and a valuable, time-saving template to use. I’m also now offering my services at a very reasonable price to analyze your situation, review your letter, and help you make changes that will increase your chances for success.

I’m now offering 3 different price options, depending on your needs and budget.

Here’s what my materials include:

  • I walk you through each of the 5 steps necessary for crafting an effective penalty abatement letter.
  • I provide you with access to actual letters I’ve written that were successful in having tens of thousands of dollars in penalties abated.
  • I provide to you the actual text and cites for IRS code sections, Treasury Regulations, and other IRS guidance I use.
  • I provide a template to use to start your own letter (if you wish to use it).
  • I provide advice on how, when, and why to call the IRS about your penalty.
  • I provide access to my updated and revised Form 990 Penalty Abatement Manual that I’ve been selling to directors, CPA’s, attorneys and professional advisers.
  • I tell you what works, and what doesn’t.
  • I offer a 60-day 100% money back guarantee if I don’t save you time and/or money, and help you write a better letter.

Here’s what I DO NOT offer:

I cannot guarantee that the IRS will abate your penalty. I wish I could, but I have no control over the IRS, nor do I know what your specific circumstances are. No one can guarantee that the IRS will abate your penalty.

October 29, 2010                    Testimonial
“The IRS dropped all $22,000 in fines! Thank you so much for writing this informative and well-written book, and thanks for all of your assistance with writing the penalty abatement request letter — we could not have done it without you. You really know your stuff, and it’s clear that you really care about helping non-profits. Thanks, David!” – Patrick, Austin TX

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Let Me Help You Get Relief!

The fact that you are here now reading this indicates that you are different than most people; you don’t want to re-invent the wheel. You want to take advantage of my knowledge and experience to give yourself the best chance possible to get out of paying those penalties.

I’ve dealt with all kinds of situations and I can show you how to organize your facts into an letter that:

  • Is easy to read,
  • Makes logical sense,
  • Doesn’t leave critical questions unanswered,
  • Conforms to the Law, Treasury Regulations and other authoritative guidance from the IRS.
  • Is proven to get results when reasonable cause exists.

Know When to Call In the Experts

How much time have you already spent searching the internet looking for advice, for sample letters, for anything that will tell you what to do? I’d sure hate to be in the position of having to figure out which definition of “reasonable cause” applies to the late filing of Form 990 without having all the experience I have. It would almost be like rolling dice. Some web sites recommend that using certain “buzzwords” is the key to success. Sure, like the IRS was just born yesterday! Good luck with that!

If you write your own letter from scratch, how confident will you be that you covered all the bases and really made the best case for abatement? Or will you be saying to yourself, “I wonder if I should have mentioned “x” or “y?”

No matter what the case, there’s no guarantee that the IRS will ultimately abate your penalties. Just like if you learn how to be a strong swimmer, there’s no guarantee you won’t drown in a raging flood one day. But doesn’t knowing how to swim dramatically increase your chances of not drowning? Wouldn’t you feel better knowing your kids took swimming lessons and know how to swim?

Wouldn’t you rather get help from someone who’s been down this road a hundred times before?

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More Testimonials

All of these testimonials are real and were completely unsolicited. They speak for themselves.

Received  November 16, 2010
“Dear Mr. McRee, When I nervously opened the IRS envelope today, I could not believe my eyes! In the amount owed box, this word appeared in capital letters: NONE! We owe nothing! Thanks to you and your e-book, the IRS adjusted our penalty of $2156.95 to nothing!

Thank you for your clear, practical and accurate advice. I had previously written the IRS about the penalty.Their response was the penalty would stand. In researching what in the world to do in the face of their response and dreading the severe impact the loss of a large amount of money would have on our little non-profit charity, I came across your website and e-book. I wasn’t too sure if a second letter to the IRS about the same penalty would do any good, but your encouragement gave me a little sliver of hope. I pieced together a letter based on your examples and verbiage and miracle of all miracles- it worked!

This was the best money I have spent in a long, long time and I highly recommend to others- do not hesitate; buy this book, follow the advice and I believe you will have a greater opportunity for a successful penalty abatement too. Thank you again, Cindy.”

Received August 2, 2010

I purchased your book by downloading it. It is a great investment! I used it to draft a letter for my client who had received a penalty in the amount of $6,000 for not filing their 2007 990 on time. …Well it worked. They received a waiver for the $6,000 penalty and they are thrilled. So this really helped them, and I am now the hero…Thank you so much for your invaluable help.  Monica

Received June 28, 2010

I am just following up with you on the outcome of the penalty abatement letter. We received a notice (CP210) abating all penalties! Thank you again for your guidance and assistance in reviewing my letter. Have a great day!  Cindy

Received April 16, 2010
Just wanted to let you know that you can add [our organization] to your list of satisfied customers who received abatement from the IRS.  We just received two letters notifying us that both penalties have been waived.  Can’t tell you how much we appreciate your assistance with this.  You were a huge life saver. From Mike K., Treasurer of a youth sports organization.

Received July 16, 2009
Thank you, thank you, thank you.

I received penalty abatements for both clients.  Before reading your book, I was about to give up and just pay the penalties.  The oversight that gave rise to the penalty was mine.  There was no one else to blame.  I couldn’t even blame the stress of the tax season.  Your book changed my outlook on the situation and provided me with everything I needed to write 2 effective penalty removal requests.

One last thank you for the personal advise and email response to my questions.  Believe it or not, that alone was worth the price of the book. From Al.

Received April 2, 2009

Just wanted to let you know I received two letters from the IRS today abating over $10,000 in penalties. Thanks for your help, the information I received to write the letter requesting the abatement was extremely valuable. Thanks again. From Mark in NY.

Received August 25, 2008:

” Mr. McRee, thanks to you and your treatise on Form 990 penalty abatement, I’ve been successful in getting $37,400 in penalties abated! I seem short on words, but it’s a tremendous feeling opening up the letter from the IRS, searching for the Amount You Owe box and seeing NONE. Let’s see $37,400 divided by the price of the book is about a 1,000 time return on the cost of your book.  It’s a great service you’ve provided for charities like ours. Have a great day.  I know I will.” from John J.

Received March 12, 2008:

“Your site was a life saver!  I worked for cpa firms before and have written these letters before for corp/individuals, but your info was so much more comprehensive.  I have done so many 990s but never had this penalty assessed before as they were always on time, and was shocked at the amount.  Wow, you learn something new every day…”
from the Treasurer of a Parent Teacher Association

Received October 29, 2008:

“Before I purchased your “IRS Form 990 Penalty Abatement” I wrote what I believed was a reasonable letter to have the penalty abated. It was rejected. I incorporated some of the language you spell out and it was abated. My client is very happy with the results and I am both very happy and impressed. This is my most cost effective purchase EVER! Thanks, Donald V., CPA NYC

Received February 20, 2009:

First of all I want to thank you. I just talked to the IRS today and they have abated penalties for 2005 and 2006!!! 2007 is under review and should also be abated. Your book was wonderful and really helped me with the correct language. It was the best money our organization has ever spent.

Thank you very much for your advice.  You have been very helpful to our organization.  You really do provide a useful service to people who need it very much.  I hope you understand what that means to organizations like us.      From Steve, a professional advisor involved with a tax-exempt organization.

The Value You Will Receive

How much is your IRS penalty? $2,000? $5,000? $30,000? More? If your penalty was $5,000, and you spent $1,000 to successfully get penalty abatement, you’ve gotten quite a nice return on your investment haven’t you? Where else could you invest $1,000 and get $5,000 back in just a few weeks?

If you could find an investment that paid 20% per year (good luck!), and you invested $1,000, it would take almost NINE YEARS to turn that initial investment of $1,000 into $5,000!

But I’m not suggesting that you invest anywhere near $1,000.

I offer a price point as low as $47 for the materials you need to learn how to write a successful letter to the IRS.

So, which is more important to you right now? Saving $47, or significantly improving your chances of not paying penalties to the IRS?

If your penalties are abated, will the $47 have been money well spent?

Join the hundreds of others who have written a successful letter and had their penalties abated!

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image: David McRee, CPA

David McRee, CPA


If you’re still not sure if this is for you, click here for more information about me and my Form 990 penalty abatement resources.

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