New 501c3

[Bjorn]

Aloha,

A group has been around for about 25 years. This past March a member filed for 5013c and the IRS approve us.

My concern is we never filed a 990.

Gross Revenes were between 50-95k each year.

Issue. There are pretty big penalties for not filing, correct??. I just did not know. Do they ever waive these types of things if you come forward before they "catch" you.

What is the best practice from an EXPERIENCED accountant for this matter?

Should I just file 2006 and then quickly file 2007 in January and try to appeal the 2006 penalty? OR, do I need to go back and file all open years.

Thank you so much in advance. Mahalo.

Bjorn

[Uncle Sam]

New 501(c)(3)

How were these non filings for 25 years NOT CAUGHT when submitting the 1023 application?
The form asks for prior year financial information as well as future projections.

[joanmcq]

If you were not a 501(c)(3) before this last march (I'm assuming 2007), why would you be required to file a 990?

[John of PA]

I agree

I agree with Joanmcq. A loosly formed informal organization is not required to file a 990. Of course the counterpart is there is no legal protection of the officers if the organization is sued.

[Uncle Sam]

501c3

If the group acted as an exempt organization, advertised contributions to be tax deductible, gone over the gross proceeds threshhold, provided a service that qualifies as tax exempt, then it SHOULD HAVE inquired about this 25 years ago - but since you can't correct 25 years of harm now, the best thing to do is ask the IRS unit that granted the exemption what the best course of action is.
In addition - the State Attorney General's office should now be contacted, as you more likely than not would have to register and do an annual filing.

[JON]

Why would

you get an exemption if you were a "loosly formed informal organization"? What do you file as then.

A long time ago a "booster club" came to me with a mess. They had stopped, forgot, to file 990s for about 5 years. I should not have agreed to help the friend, but we filed everything and spent 3 years arguing, pleading, over penalties. We finally got to appeals and they said OK forget the penalties. Now that I am old(er) I have not offerred to help any not for profits. They have become a bigger business and they need to find people who specialize in them.

As the IRS has said most penalties are for abuse of the system, not one time mistakes.

Good luck.