Gentoo Archives: gentoo-nfp

From: Rich Freeman <rich0@g.o>
To: "William L. Thomson Jr." <wlt@××××××××××××××××.com>
Cc: gentoo-nfp@l.g.o
Subject: Re: [gentoo-nfp] Tax return and accounting discrepancies
Date: Sat, 26 Mar 2011 01:56:36
Message-Id: AANLkTikGNRYLHfXvsrambTFn2D9M8nmY3_1L4b6ksT4v@mail.gmail.com
In Reply to: Re: [gentoo-nfp] Tax return and accounting discrepancies by "William L. Thomson Jr."
1 On Fri, Mar 25, 2011 at 2:30 PM, William L. Thomson Jr.
2 <wlt@××××××××××××××××.com> wrote:
3 > The IRS is slow, but you can prod them, and an experienced CPA or
4 > otherwise in this matter, should be able to deal with most things
5 > relatively quickly. Though most anything dealing with the government is
6 > slow. But the IRS really is not bad, if you do things correctly.
7
8 So, I would definitely consult with professionals before doing
9 anything, but from the little reading I've been able to do so far it
10 seems like organizations can go ahead and start filing taxes like they
11 are exempt before they get official recognition as such.
12
13 Now, I'm sure that makes you subject to penalties/etc if it turns out
14 you aren't exempt. However, I doubt it costs a dime more than what
15 you'd be subject to for not filing taxes at all once they catch up
16 with us (and unless we're raking in a lot of cash after expenses that
17 may not actually be much - it looks to me that unless criminal charges
18 are filed the liability is whatever we'd pay in taxes anyway, interest
19 at a rate that isn't that bad, and a penalty of up to 25% more - so
20 you basically pay what you should have paid all along plus enough of a
21 fine to make it not worth your while to delay). As others have said I
22 doubt criminal charges are likely unless somebody is pocketing funds
23 or using the organization to launder money or something - if you pay
24 your penalties the IRS is probably happy to cash the check and wait
25 for your next return.
26
27 The terminology used in the IRS publications/etc is "recognition of
28 tax-exempt status." The logic is that tax-exempt organizations are
29 tax-exempt by virtue of law, and not because they are certified as
30 such (tax deductions for contributors are probably a different story).
31 So, basically you're just asking the IRS to acknowledge what is
32 already true.
33
34 That said, I have no doubts that issues from the past will make
35 getting this recognition more difficult. Even so, the sooner we get
36 squeaky-clean with the paperwork the sooner we can move back in that
37 direction. I'm sure the IRS looks differently at an application by an
38 organization that has had the forms in on time for 5 years in a row
39 than one that is struggling to show compliance, regardless of the
40 history of either.
41
42 I've been slowly working my way through the IRS website as their
43 publications aren't actually all that bad and of course they are
44 official. If somebody is aware of a good place to find trustworthy
45 tips/etc for NFPs/etc let me know.
46
47 Rich

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Re: [gentoo-nfp] Tax return and accounting discrepancies "William L. Thomson Jr." <wlt@××××××××××××××××.com>