I called the IRS today and was told the completed schedule had to be returned within 30 days of the date on the letter (which was Feb. 9). The Schedule A was pretty straight-forward. 2004 was our first accounting year, so page 3 was full of zeros! All I had to do was attach an explanation saying our organization was formed and began operating in 2004 so there's no income or other financial information to report prior to last year.
Anyway, I'll let you know if I hear back from the IRS. As far as our CPA--he's FIRED!
Your CPA doesn't sound like he has a clue. But, frankly, over the years we've often come up against "professionals" who knew less than our self-educated parents.
I guess that the non-profit arena is a niche both in accounting and in legal matters. But an accountant or lawyer shouldn't offer services in that area if they aren't up to speed on the rules and laws.
I'm sorry you had a bad experience, but glad you've found a way to resolve it.
The CPA we hired has had problems with our group being a 501(c)(3) charity, and he didn't include the Schedule A. I told him from the beginning the IRS designated our group a 501(c)(3) and we didn't come up with that all by ourselves! I even gave him our Determination Letter and he still maintains we're not "REALLY" a 501(c)(3). Whatever!
Anyway, when he initially filed our taxes, he filed an extension which expires Feb. 15 (tomorrow)! So hopefully, if it is postmarked the 15th, we should have no problems being late.
I'm "miffed" because we're under an Advance Ruling Period, and we don't need to tangle with the IRS our first financial year!
I agree that the IRS will help you work it out - that ultimately they are pretty good about working with non-profits. However, it may not be a quick or painless process.
We had a clerical error on ours (my fault) one year when I failed to check the "fiscal year" box - making it seem like we filed several months late. They assessed the penalty (scary-sounding letter) and it took about 6 months to resolve. They did finally waive the fee.
I always found the tax-exempt group of the IRS to be very friendly, helpful, responsive. The penalty group (who handles these matters) was a whole different world. I had many phone calls, letters, etc. - so it wasn't just one person or someone having a bad day. As I said, it did get resolved, but it took time and patience.
P.S. Definitely go back to the CPA with the problem. You paid for his services. He needs to make it right.
We have experience in dealing with the IRS. They really just want your tax return and will forgive the fine if you can justify what happened. Your CPA should take some responsibility for this!
Is your return actually late now? I think they won't start the fee clock until you've actually missed the deadline. Have you called the IRS? You might be able to suspend the fees if you demonstrate a good-faith effort to respond to the problem ASAP.
Intuitively, it seems your preparer shares some liabiilty especially if he is a CPA and was hired. Keep us posted....there's an important lesson for all of us in your experience.
