Acknowledge errors
In addition to failing to file regularly or taking part in prohibited activities, nonprofits can trigger an IRS investigation with an innocent math or other filing preparation error. If you discover you’ve made a mistake, act quickly and get professional advice. The earlier you bring an error to the attention of your tax advisor, the easier it is to make right.
Also, make sure that you don’t brush off a potential compliance problem because you don’t understand it or don’t have time to deal with it. And don’t let embarrassment prevent you from taking the right steps. Innocent mistakes don’t have to reflect badly on your organization. Getting caught trying to sweep mistakes under the rug, however, can bring your judgment — not to mention your nonprofit’s reputation and funding — into question.
Consult your advisors
Tax advisors have experience working with the IRS, so listen carefully to your experts’ advice and follow their lead in amending any errors. These advisors can even accompany you if you need to meet with the IRS in person or by phone. Approach IRS meetings with an open mind and, once there, simply explain the facts. Don’t act defensive, assume the government is “out to get you” or engage in other hostile behavior.
By taking the proactive path and approaching the IRS before you receive a notice, you’ll find that the agency is likely to be more amenable to finding a solution. Taking the initiative can also speed up the process so that you can get back to running your organization.
Act immediately
Don’t put your organization at risk for interruptions, fines or censure. If you’re having trouble complying with IRS regulations, discover you’ve made a filing error or receive an IRS notice of audit or compliance check, contact us immediately. We can help you catch up, repair mistakes and, if necessary, apply for tax-exempt status reinstatement.
© 2023
For more helpful tax and accounting articles, or to sign up for our newsletter, please visit our KKB Insights page. If you have any questions, please contact us.
Getting a handle on inventory
/in Tax/by KKB CPAsFor retailers, manufacturers and many other businesses, a significant amount of working capital is tied up in inventory. What can your company do to lower its inventory carrying costs? Continue Reading Getting a handle on inventory
Keep these 3 issues in mind after you file your return
/in Tax/by KKB CPAsFor more helpful tax and accounting articles, or to sign up for our newsletter, please visit our KKB Insights page. If you have any questions, please contact us. Continue Reading Keep these 3 issues in mind after you file your return
Update on retirement account required minimum distributions
/in Tax/by KKB CPAsThe SECURE 2.0 law includes good news about required minimum distributions from tax-favored retirement accounts. But an earlier law contained some bad news for certain beneficiaries of inherited retirement accounts. Here are the rules. Continue Reading Update on retirement account required minimum distributions