Tax Filing Information

(This page was created & written by Patrick Parker, former treasurer & bookkeeper.)


CHEA is a 501(c)(3) tax-exempt non-profit, but we still have to file taxes every year. We can be fined and lose our tax-exempt status if we don't file taxes.

We file a Form 990. (We cannot file the 990-EZ, as our income is more than $100,000.)

The IRS might require us to file a Schedule A -- that form can be found here: . The Schedule A might be included in the 990.

Info on CHEA: (requires login: CHEA / sasona42)

Other good resources:

Due date

The deadline for filing federal tax returns for a nonprofit organization is four and a half months after the fiscal year end. Therefore, the filing deadline for the fiscal year (ending June 30) is November 15.

"The filing due date for annual returns and electronic notices is the 15th day of the 5th month after an organization’s tax year ends." -,,id=221600,00.html

Filing for an extension

If necessary, an automatic three-month extension can be filed, moving the deadline back to February 15. And if you still need more time, a final three-month extension can be filed, moving the deadline to May 15.

Just fill out a form 8868, available here:

How to File Taxes

You can save yourself time by keeping the check stubs organized and saving the PDFs of the bank statements every month. The CPA will also need the name and position of every board member for the previous year.

Bookkeeper & CPA Contact information

We pay a bookkeeper to get our books in order and then give the bookkeeper summaries to an accountant to file our taxes for us. The following professionals have assisted us and might be willing to continue to help us if we are nice to them:

Bookkeeper: Andrea Jenkinson-Saenz, A.M. Jenkinson & Associates Inc., 5601 Brodie Lane Suite 620-177, Austin, TX 78745, 512-358-7080., She charges a non-profit rate of $50/hr.

Accountant: Brian Dahlk, He is a co-oper, served on the NASCO Properties board, recommended by Jim Jones. He did a great job on 6 years of our taxes (in 2010). He'll do taxes for $150/year. Schedule As are $50.

We give our bank statements and check stubs to the bookkeeper, who creates bookkeeper summaries. We then send those bookkeeper summaries to the accountant, who files our 990s. Then we send the 990s to the IRS.

IRS Contact Information

Telephone Assistance for Exempt Organizations, Retirement Plan Administrators, and Government Entities: Toll-Free, 1-877-829-5500

Hours of Operation: Monday – Friday, 7:00 a.m. to 7:00 p.m. Central Time.,,id=96730,00.html

Revocation of Non-profit Status for Late Filing

We can lose our 501c3 non-profit status if we don't file for 3 consecutive years.

If we lose our non-profit status, it will take months to get it back, and we will be liable to pay taxes on our earnings during the time that we were "for-profit." We can also face serious penalties and fines.

From the IRS website: "The exempt status of an organization that does not file a required annual return or notice for three consecutive years is automatically revoked, effective as of the filing due date of the third year. The filing due date for annual returns and electronic notices is the 15th day of the 5th month after an organization’s tax year ends." -,,id=221600,00.html

Non-Profit Times article:

Fines for Late Filing

The IRS can charge $20/day, up to 5% of our yearly income (approximately $6,500), for each year that is filed late.

From the IRS website:

If an organization whose gross receipts are less than $1,000,000 for its tax year files its Form 990 after the due date (including any extensions), and the organization doesn't provide reasonable cause for filing late, the Internal Revenue Service will impose a penalty of $20 per day for each day the return is late. The maximum penalty is $10,000, or 5 percent of the organization's gross receipts, whichever is less.


IRS policies on penalty abatement

Information on late filing penalty abatement from the IRS Website:,,id=139227,00.html

(c) Showing of reasonable cause. (1) Except as provided in subparagraphs (3) and (4) of this paragraph (b), a taxpayer who wishes to avoid the addition to the tax for failure to file a tax return or pay tax must make an affirmative showing of all facts alleged as a reasonable cause for his failure to file such return or pay such tax on time in the form of a written statement containing a declaration that it is made under penalties of perjury.

{....} If the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, then the delay is due to a reasonable cause. A failure to pay will be considered to be due to reasonable cause to the extent that the taxpayer has made a satisfactory showing that he exercised ordinary business care and prudence in providing for payment of his tax liability and was nevertheless either unable to pay the tax or would suffer an undue hardship (as described in §1.6161–1(b) of this chapter) if he paid on the due date.


Penalty Abatement Advice

Here's an e-book we bought to help us: IRS late filing penalty abatement e-book by David McRee.pdf

For a fee, McRee can help us write a letter. His email is

Notes on the e-book:

General Info:

The Letter:

Other Steps:

Email from David McRee:

David McRee <> wrote:

You've struck the correct tone in your letters but the argument is weak. Nevertheless, since this is your first instance of noncompliance the IRS is likely to abate. Note that the penalties are statutorily defined and cannot be "reduced." A recent court case decided that the IRS has no authority to reduce the penalty. They only have authority to abate / waive the penalty if reasonable cause exists.

I think you'll find everything you need in my book to write a much stronger letter.

You need to tie everything into a timeline:

Be sure that in each letter you point out that you filed all four years (or however many) delinquent and filed them all as soon as you found out they were late. Make sure that whoever is reading your letter understands that these are not four separate instances, but are all related to your not knowing a return was due.

If I were the IRS, your first letter would cause me to ask: was the first return late because a responsible person was sick? Or because the organization didn't know about the filing requirement? If the organization didn't know, then the illness was irrelevant since it was unlikely the return would not have been filed anyway. Not a fatal flaw, but you should be more clear in the letters that follow.

You should be able to get abatement for all years with no problem.

David McRee, CPA

$22,000 in IRS fines

In August 2010, we received letters from the IRS informing us of fines for $4,720 and $4,300 for late filing, and then we received even more fines for 2 more years, for a total of $22,000.

Here is a PDF of the letter from the IRS: IRS letter to CHEA re $4700 fine for late filing.pdf

Here's a copy of the penalty abatement letter sent to the IRS, which resulted in all $22,000 in fines being dropped: Penalty abatement letter to IRS 9-4-10 re $22,000 fines.doc

Here's the letters from the IRS dropping our fines: IRS letters dropping fines.pdf

$5,600 in IRS fines

In August 2011, we received a notice of a $5,600 fine for late filing of an old tax year which somehow had been overlooked.

SasonaWiki: TaxFilingInformation (last edited 2019-06-27 00:09:02 by TripleEntendre)