Wouldn't one have to waive one's 5th Amendment protection against self-incrimination in order to provide a reason? In other words, isn't a written, signed explanation of why, by definition, basically a signed confession? Does this make it impossible to get an abatement without incriminating oneself?
Thanks for watching the video, Gene. I guess the short answer to your question is yes. To expand, it would be reasonable to argue that the act of filing Form 990, or any tax return is in itself an act of self-incrimination. Engaging in a financial transaction by some method other than the exchange of cash is an act of self-incrimination since you are leaving a paper trail or electronic trail which can and will be used against you should the need arise. By filing a late or incomplete return, you've already sent your signed confession, which was used to impose the penalty. So the choice is to pay the penalty, or make your case for abatement as provided for by law. You've already been assessed the penalty, so what would be the down side of providing a reasonable cause explanation? The penalty amount is provided by statute, so the IRS can't increase the penalty based on the fact that your reason is lousy. If you volunteer information in your letter that would put you on the hook for additional penalties, then yes, that could be a problem. But that's why I recommend hiring an expert. Dealing with the IRS can be perilous, even in the best of circumstances.
NonprofitTaxHelp thanks for the reply. Wait, not all statements are self-incriminating are they? Only statements that are admissions of guilt of a crime, right? If I say I took my coffee black this morning, it's not a self-incriminating statement, because there's no crime. But if I say "this is the amount of the tax I owe", then that's self-incriminating? Meaning paying taxes is a crime?
Thank you! This was extremely helpful ☺️🙏🏽
Wouldn't one have to waive one's 5th Amendment protection against self-incrimination in order to provide a reason? In other words, isn't a written, signed explanation of why, by definition, basically a signed confession? Does this make it impossible to get an abatement without incriminating oneself?
Thanks for watching the video, Gene. I guess the short answer to your question is yes. To expand, it would be reasonable to argue that the act of filing Form 990, or any tax return is in itself an act of self-incrimination. Engaging in a financial transaction by some method other than the exchange of cash is an act of self-incrimination since you are leaving a paper trail or electronic trail which can and will be used against you should the need arise. By filing a late or incomplete return, you've already sent your signed confession, which was used to impose the penalty. So the choice is to pay the penalty, or make your case for abatement as provided for by law. You've already been assessed the penalty, so what would be the down side of providing a reasonable cause explanation? The penalty amount is provided by statute, so the IRS can't increase the penalty based on the fact that your reason is lousy. If you volunteer information in your letter that would put you on the hook for additional penalties, then yes, that could be a problem. But that's why I recommend hiring an expert. Dealing with the IRS can be perilous, even in the best of circumstances.
NonprofitTaxHelp thanks for the reply. Wait, not all statements are self-incriminating are they? Only statements that are admissions of guilt of a crime, right? If I say I took my coffee black this morning, it's not a self-incriminating statement, because there's no crime. But if I say "this is the amount of the tax I owe", then that's self-incriminating? Meaning paying taxes is a crime?