I am involved with a 501(c)3 nonprofit and "we" (the nonprofit) apparently filed our Form 990 information return about 15 days late (according to the IRS). We received a notice that the return was filed 15 days late and that we were being fined or penalized $100/day ($1,500) for the late filing. The actual circumstances were slightly different because we did request an automatic 6-month extension of time to file the return (Form 1068). But, we later received a notice that our Form 1068 was filed past the filing deadline and that it therefore was rejected -- and the notice said to file the Form 990 return ASAP to avoid increasing penalties. At the time that we received that notice, we had already filed the Form 990 (about 8 days after the original filing deadline without any extension), so we didn't respond to that notice.
When we recently received the notice of the $1,500 late filing penalty in February, it said to pay that amount within 30 days -- which would have been in the beginning of March (this month). Instead, we wrote an "appeal" requesting a waiver of the penalties for various reasons including that we did in fact mail the Form 1068 extension request prior to the original filing deadline for the Form 990, even though the IRS said it was not postmarked by that date -- which is why they rejected the extension request.
Now, while the waiver/appeal request is still pending at the IRS, we received a notice about 10 days ago saying that if the $1,500 penalty is not paid by March 31, a lien will be placed on our assets. Yikes!, not much notice! They sent that to us via certified mail.
Our plan is to call the IRS tomorrow, explain the situation, and ask that they hold off on placing any liens while the waiver/appeal is being decided on their end. Obviously, if they cannot hold off on the lien, we will just pay the penalty -- which we can easily do. We have no intention or desire to not pay the penalty if the waiver/appeal request is denied -- we would just pay it.
But, we were stunned at how heavy-handed this notice of lien was for something that we were just recently told we owe. I would have thought some other type of collection or "overdue" notice would be sent to us first before going right to stating that a lien will be placed on our assets as of March 31.
I guess the question is, since they said (10 days ago) that a lien will be placed on our assets if they don't get the $1,500 by March 31, will they actually place such a lien on that date or a day or two later?
That just seems bizarre to us, and maybe we will just have to do the payment now no matter what while we wait for an response to our waiver/appeal request. We are just stunned by this heavy handed approach on such a minor issue and on such a short time frame.