990 Abatement Request Denied

Hi Everyone,

Looking for anymore suggestions on getting two years of non-film by penalties abatements approved by the IRS for a non profit client. She did not file 2021 or 2022 990s. No real excuse, except she runs the dog rescue herself and didn’t realize how serious filing taxes were. (Eye roll here). Anyways, she came to the firm I work for help and to get her 23 return complete (which I did), but the abatement request the firm owner (CPA) put in was denied for not establishing reasonable cause or show due diligence. The firm really has zero experience with nonprofits and I handle all the returns for them now since I have 10 yrs of experience with nonprofits. However, never dealt with one that failed to file, so now looking for any other experience you guys have possibly had.

The firm sent a client letter in along with our abatement request. The executive director of rescue wrote the failure to file was due to COVID hardships which caused disruptions in being able to access information needed to file their tax returns in a timely manner. And also the loss of two volunteers who handled the finances.

Now, if I was the IRS and I read that, I would also deny them. But, we are trying to work for our client and get the abatement approved without lying of course, but perhaps explaining things in a different way? Any ideas?

The nonprofit has negative operating revenue and gross revenue is about $500k a year. It’s a dog rescue. She owes $11,239 in penalties for 2021 and another $4k for 2022.

Appreciate ideas in advance.