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From: "William L. Thomson Jr." <wlt@...>
Subject: Re: Tax return and accounting discrepancies
Date: Wed, 23 Mar 2011 16:18:32 -0400
On Wed, 2011-03-23 at 15:07 -0500, Dale wrote:
>
> My questions would be this, if these things are not filed, are there 
> penalties for not filing them?

Yes, the IRS can impose penalties in many different forms. Usually
varies on a case by case basis. But if/when the IRS gets involved, you
lose most all control. They tell you how things will be, and that is
that. Its very bad, I have some clients going through this, and believe
me, the Foundation does not want this.

> Who gets those penalties, the individual or the organization itself? 

Thats a good question, I know for a fact the organization would. However
there could be some personal responsibility as well for officers. Its a
NPO so its a bit different than a for profit in that regard. Where
principles in a for profit can be held liable for their actions. But
that does tend to vary based on the type structure of the for profit
entity, C corp, S corp, LLC, partnership, sole proprietor, etc.

> How much would those be if there is one?

Not sure, typically its based on income, amount you would have paid in
taxes, etc. But a NPO does not file a tax return, for normal purposes.
It does so just to show accounting to the govt, prove its not a for
profit entity. There would not be any back taxes owed, or compounded
penalties, interest, etc for that.

But it very well could effect 501c3 status, or possible cause Gentoo to
lose NPO status entirely. Also New Mexico could act on their own and
revoke the charter. There are two entities to comply with, state and
federal.

> I remember Gentoo going through all this a few years back.  Is this 
> happening again?  Is it even worse this time?

Its worse, because that was likely me back then. However this stuff was
never accomplished in 08, and only more years have passed since. The
mess has only gotten bigger, and more years to go back and report/file
on.

Its really not good all around, and needs to be top priority and the
first task the new board works on till accomplished. Then procedures and
processes need to be put into place, to ensure this NEVER happens again!

For anyone who wants to do the leg work and research the matter. I will
help out with the following links.

http://www.irs.gov/charities/
http://www.tax.newmexico.gov/Businesses/How-Do-I/Pages/Start-Registera-Non-Profit.aspx


-- 
William L. Thomson Jr.
Obsidian-Studios, Inc.
http://www.obsidian-studios.com



Replies:
Re: Tax return and accounting discrepancies
-- William L. Thomson Jr.
References:
Tax return and accounting discrepancies
-- William L. Thomson Jr.
Re: Tax return and accounting discrepancies
-- Rich Freeman
Re: Tax return and accounting discrepancies
-- William L. Thomson Jr.
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Updated Jun 18, 2012

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