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IRS Abatement for tax penalty for failing to file F 940 for several years.

Port Washington, NY |

I am the treasurer of a 501c not for profit. The last treasurer did not file the 990EZ for 4 years. I filed all the late forms in August 2011, Recently, IRS is charging us >5k in penalties. We are a small HOA with only 60k revenue and same expenses (run community pool). I filed a 30 day extension. Should I pay the IRS and then file a F843? I don't really have a good excuse to write on the F843. I don't have reasonable cause? What has been your experience with negotiating with the IRS as a courtesy since it is a n 4 profit and there are no taxes owed. Thank u in advance 4 yr attention.

Attorney Answers 3


In most cases, you do require reasonable cause to abate penalties. Often, the IRS will give you a "first--timers" excuse for the first year. In the realm of small not-for-profits, I would take a shot. I would write in and request a penalty abatement. Throw in anything you can that looks like reasonable cause. If you want assistance, the Taxpayer Advocate may work with you. Consider contacting your local Taxpayer Advocate (which is part of the IRS).

Good luck.


Marty Davidoff,, 732-274-1600. This answer is provided for general information only. You should seek advice from an attorney or tax professional.

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You absolutely have to give it a shot. Draft a letter explaining the situation in detail and respectfully request an abatement of the penalty. Reasonable cause is in the eye of the reader and you may get an abatement. You will not know until you try. If it is denied you will only be in the same place you are now.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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Generally, if there has been a failure to file, there is a reason why the paperwork was not filed. That reason may be found to be reasonable cause. You don't know until you try.

I hope this helps.
Steven A. Leahy

Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.

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