Yikes, that sucks! I would definitely see if you can get the fine reduced at least. Remember, this is the "kindler, gentler IRS"

Too funny that they can make an organization pay a penalty on taxes they are exempt from in the first place.

Thanks for the heads up though!!

Suzi

Just thought I'd share the latest in our efforts to do everything by the book. We got our 501(c)(3) last year, and filed our first 990EZ this fall. (That's the annual "informational return" that non profits file with the IRS.)

Anyway, although we owe no taxes, we just received a letter from the IRS stating we owe $2500 in penalties. Ouch!

In looking over the paperwork we sent in, it appears we missed the very first question. It's kind of hidden in the header above the name:

"For the 2000 calendar tax year or tax year beginning _____, 2000 and ending ________, 20__." Since we failed to put our fiscal year as June 1, 2000 - May 31, 2001, they have counted it as regular 2000 return due last April and subsequently tacked on daily late fees.

I'm sure with a little time and tact, I can get it sorted out. Overall, we've had good luck with the IRS. But I thought our experience might save someone else the trouble.