No joy filing 990-N epostcard

On Wed, 18 May 2011 12:28:47 EDT, "Adam H. Kerman" wrote Re No joy filing 990-N epostcard:

I've also had problems with the 990-N system. Spoke to the IRS several times, and it's always "..will be fixed soon..". Sent in letters, etc. Still not fix.

Going to our congressman now to see if he can help.

A few days ago, I received notice dated July 18, 2011, that my determination was revoked retroactive to November 15, 2010, the 15th day of the fifth month, for not having filed for three years.

Using the IRS contractor's Web site, I had filed the first electronic notice on October 12, 2010. IRS still showed the incorrect fiscal year, even though I'd written several times asking IRS to correct it. IRS advised me to file with the wrong fiscal year.

In February, 201l, IRS finally corrected their record of our fiscal year end. As quoted above, I attempted to use the IRS contractor Web site to file for 2009 but was unable to connect. An accountant took pity on me and filed 2009 electronic notice (June, 2010, year end) via Lacerte.

In a conversation with IRS, the woman claimed the system thinks that I had never filed within the initial three-year period, as the system shows that I changed the fiscal year, rather than IRS correcting it, even though I had explained in my letter asking IRS to correct the fiscal year that it was indeed a correction.

Let me tell you how electronic filing requirements have truly simplified my life.

I posted the story months ago of dealing with IRS on behalf of my organization that had its 501(c)(3) status automatically revoked by IRS due to error on their part.

The paperless 990-N filing system ends up not being paperless when IRS makes error after error after error. Then a significant amount of correspondence is required, and phone calls.

The organization informed IRS of its June year end on the application on Form 1023. The organization has never changed its year end. Nevertheless, IRS changed its record of the organization's year end to a calendar year on its own initiative.

The organization had no way to correct the year end by filing 990-N via the IRS contractor Urban Institute. IRS advised me over the telephone to ignore the fiscal year error and file anyway, which resulted in a 990-N for June, 2009, appearing as notice for calendar year 2009.

Note that IRS one-time filing relief to prevent automatic revocation had a deadline of October 15, 2010. I filed that notice (showing the wrong year end) prior to that date.

After I filed the first notice, I received correspondence from IRS that they had changed our year end. IRS, however, gave us a short fiscal year ending June, 2011, rather than correct their error. Apparently this created a conflict in their system about fiscal years that prevented me from continuing to use the Urban Institute site to file further 990-Ns and would later result in automatic revocation.

I had a CPA file the 990-N for year ending June, 201, via Lacerte. IRS accepted the filing.

Shortly after the close of year ending June, 2011, the CPA attempted to file 990-N via Lacerte. This time it was rejected.

IRS then sent the organization notice dated July 18, 2011, that its

As I took the position that IRS had revoked 501(c)(3) status in error, I wrote a letter on August 3, 2011. I requested reinstatement, a correction of our fiscal years in their database so that no short year is shown, and a correction that we had filed notice for the year ending June, 2009.

The address I wrote to was

Internal Revenue Service M/S 6552

That is not the address to use when the organization is not taking the position that revocation was in error.

I attached receipts for the three notices filed (including the rejected notice), the copy of EO Update with the filing relief deadline, and IRS's determination letter acknowledging our June year end.

IRS's response was not timely. However, I was told on the phone, today, that we had been reinstated. I haven't received the letter yet.

The bad news is that, for the second time, IRS changed our fiscal year to a calendar year. This time, I had the Ogden call center send a memo to the correct people to change the calendar year, which should be done in 30 days, hah. The trouble is that if it's still not changed by June 30, 2012, any attempt to re-file the notice for the period ending June, 2011, will be rejected again.

Lessons learned:

It was a mistake on my part to file notice with the wrong year end. I should have used Lacerte the first time, as it would have allowed me to state the year end correctly, or I should have filed a paper return on Form 990.

IRS is hopeless about correcting its errors the first time they are brought to its attention. Anticipate additional correspondence.

I don't know what put the organization on the s*it list to begin with. I'm guessing it was the short fiscal year, but I really don't know.

Checking on line at the IRS Web site, the Publication 78 list (just names of entities) and automatic revocation lists are updated once a month. The January 23, 2012, update is not there, so our status is still show as revoked. Of course, I don't know if we were reinstated in time to be on this update. I may have to wait a month.

The Web site has a note that organizations that were revoked remain on the revocation list permanently, even after reinstatement. I hope that doesn't apply to us, as it was IRS's error. If it does, that will be still more correspondence.

It's not resolved.

After being in a retroactively revoked status for over seven months, IRS published on line a new list of organizations recognized as charitable (Publication 78). My organization is included in the list.

However, it continues to be listed on the automatic revocation list. I've been told that it'll be removed from that list on a future update.

If an organization becomes listed on the automatic revocation because it did indeed fail to file for three consecutive tax years, it remains on it.

IRS has not yet corrected its record of our year end.