Thank you for your interest in getting more information about my Form 990 penalty abatement letter resources. Allow me to explain a bit about how I came to develop this system and how it can help you.
Years ago I worked for a CPA firm with a large nonprofit client base. From time to time we were contacted by organizations that found themselves being charged a penalty for late-filing by the IRS. I gained quite a bit of experience writing reasonable cause abatement request letters. After I left the firm, I found that I had become well-known in the area for my experience with nonprofit organizations, and I received quite a few referrals. So I continued my penalty abatement work, gradually developing a systematic approach. I realized that there were organizations, CPA’s and attorneys all over the country who needed help seeking penalty abatement for nonprofits, so I wrote a 37 page e-book.
I’ve been selling the e-book online since 2007. Since I first put it online, the book has grown from 37 pages to 75 pages. And I now offer a letter template that is very helpful, as well as sample letters that were actually successful in having penalties abated.
It’s not magic, although some of my clients would say it is. It’s just a systematic, organized approach to writing a penalty abatement request to the IRS based on the Internal Revenue Code, Treasury Regulations, and other published guidance on what the IRS will accept as “reasonable cause” for filing late.
Who Am I
My name is David McRee. I’ve been licensed to practice in Florida as a Certified Public Accountant since 1997. I worked from 1996 to 2003 for a St. Petersburg firm that specialized in nonprofits. My job was to prepare Form 990 for our clients. In 2003, our firm was purchased by a very large regional firm which also had a large nonprofit client base. In 2005 I left the firm and public accounting.
Since leaving the firm I’ve been an active contributor to the Taxalmanac.org forum for tax professionals. This is a forum hosted by Intuit (yes, the same company that produces TurboTax) for professionals to seek advice and input from other professionals on tax issues. I post under the name “CPAdavid,” and I’ve contributed over 500 answers in the area of nonprofit formation and tax compliance.
Not long after leaving the CPA firm, I began to get calls from people who knew me and needed help with applications for tax-exempt status, for Form 990 preparation, and for penalty abatement work.
The most rewarding work came from helping nonprofit organizations get out of paying ridiculously high penalties, simply because the were late filing their tax returns. I knew that there must be thousands of small nonprofits across the country that needed help. So I decided to write an instruction manual to teach nonprofit organizations how to write their own reasonable cause letter. I’ve been selling the manual as an e-book on my website for several years as well as offering phone consultations and advice via email. From time to time an organization prefers that I write the letter for them.
One thing that surprised me is that at least 75% of people who have purchased my e-book manual are CPA’s and attorneys, including professionals from some very high profile firms.
What I’ve noticed over the years from the questions people ask is that most of the questions and requests are similar, and the mistakes I see people make share some common elements. So now, along with the e-book, I’m also providing sample letters that were successful, and by popular request I’m including a letter template that organizations can use to help structure their letter to the IRS. I also have a blog on this web site where I’ll be sharing important changes in the law as well as successes and failures of abatement letters, and helpful tips.
Answers to a few common questions:
Q. Can we get abatement if we’ve been late for several years in a row?
A. Yes, absolutely. I’ve seen organizations that didn’t file for 10 years get abatement. However, keep in mind that the rules changed with the 2006 Tax Act. Starting with tax years that began in 2007, if your organization did not file for three years in a row, it has AUTOMATICALLY lost its tax exempt status. Example: Your organization was formed in 2000. It filed as required in all years from 2000 through and including 2006. But it forgot to file in 2007, 2008, and 2009. The organization has lost its tax exempt status and will have to re-apply to get it back.
Another example: Your organization was formed in 1990. It filed tax returns as required from 1990 through and including 2001. Then there was a change of directors and management and the organization fell on hard times and could not afford a bookkeeper, so the bookkeeping was performed by a volunteer. The organization forgot to file a tax return from 2002 through 2008, but did discover its delinquency and filed its 2009 Form 990 on time. In this case, it did not violate the 3-year non-filing rule after 2006, but does have multiple delinquencies before that. Can it get abatement for the late filed returns from 2002 through 2008? Yes, absolutely. As long as it can successfully show that there was reasonable cause for the late filing.
Q. Have you ever had someone ask for their money back after purchasing your book?
A. Yes, several times, and I always issued a refund immediately. The first refund I gave was to a woman who had payroll tax penalties in her for-profit corporation. She ordered the book before she realized it was for nonprofits.
The second refund I gave was to a CPA, who, after downloading the book, decided it did not address his specific fact pattern. Several weeks later he wrote back and asked me to bill him for the book again because after reading it more carefully he realized it was exactly what he needed.
The third refund I gave was to a man who said he thought he was buying a printed book, even though I made it abundantly clear that I was selling an e-book. I didn’t feel the refund was warranted, but I gave it to him anyway. I’m confident you will find my resources to be worth far more than what you are paying for them.
I’m here to help you. If my materials are not helpful to you, I don’t want your money.
Q. What if our request for abatement is denied?
A. If the IRS denies your request for abatement, you are entitled to an appeal. The IRS includes instructions on how to request an appeal along with its letter denying your abatement request. Getting face-to-face with an appeals officer can often improve your chances for abatement, so don’t consider that to be a bad thing. I don’t generally get involved with the appeals process because 99% of my clients are in other states. My service is generally limited to helping you write the best reasonable cause letter you possibly can, given your facts and circumstances.
Q. What do you charge to write the letter for us?
A. Generally my fee for writing a reasonable cause letter starts at $400. All fees must be paid in advance via personal or business check.
Q. How do you write the letter for us?
A. First I interview you to get all the facts. I ask you to send me a copy of any IRS notices and a copy of any written communication you’ve sent to the IRS. Then I write a draft of the letter and email it to you. It is important that you read the draft letter carefully to make sure that I’ve not misrepresented any facts. Once you’ve approved the letter, I sign it and send it certified mail to the IRS. There may be instances when this process may be slightly more complicated, and there may be situations when I’ll need a Power of Attorney to enable me to speak to the IRS on the phone regarding the facts of your situation.