Form 990 Late-Filing Penalty of $50,000 Abated for Reasonable Cause

IRS Penalty Notice Form 990 late filing $50,000I’m very pleased that I was able to help a nonprofit client obtain relief from this $50,000 late-filing penalty.

The original penalty was caused by the client’s CPA failing to notify the IRS of an accounting year change. The error went undetected for a number of years, resulting in a mix-up in due dates.

By the time I was brought in, a levy was in place.

Consequences of slow and inadequate responses to IRS notices and demands were magnified by the IRS losing written communications from the client.

After many hours on the phone with the IRS EO and ACS,  and after a properly prepared reasonable cause letter with supporting documentation was received by the IRS, the levy was lifted and the penalty abated.

This case was a prime example of how a simple case that easily qualifies for abatement can become very tangled and very expensive if not handled promptly and properly.

Most CPA’s simply don’t have the experience or know-how to properly handle reasonable cause abatement requests for nonprofits. But they can learn.

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