We were just hit with a $2250 fine by the IRS for failure to
file the Club taxes on time. We had a miscommunication on
who was supposed to file it. When the IRS notified us (Dec)
we filed immediately. Now they have sent us the fine and
state that it's for May - Sept at $50 per member, per month.
Does anyone know if this is able to be appealed or should we
just take it as an expensive lesson?
Thanks, John.

Grant Alchemy Investment Club

Rip,

Is there any way a club member can check on the status of a filing? It seems that I have seen this issue posted a few times. A double check by a club member to ensure filing seems like a good, procedural practice to avoid a nasty hassle with the IRS.

Jeff

---- Rip West <ripwest@comcast.net> wrote:

> In all cases with which I am familiar, clubs were successful in getting this assessment waived. It is important to try to find someone to talk to by telephone, rather than protesting in writing. You should emphasize that (1) all members reported their k1 information timely on their 1040s, and (2) you are a poor struggling investment club, not familiar with the requirements of the IRS, and (3) the fine is way out of proportion to the amounts involved. Again stress that the IRS is out no money because of the inadvertent failure to file timely.

>A double check by a club member to ensure filing seems like a
> good, procedural practice to avoid a nasty hassle with the IRS.

Or, having a transparent system will do the trick. We balance the bank and
broker accounts to the penny every month in order to make year-end audits
quicker. We have two members assist the treasurer with the audit AND
completing, printing and assembling the returns. They are in the envelopes
and stamped before we all leave. One of us usually runs them to the post
office on the way home. We email K-1s to the members and report when the
taxes have been completed and mailed.

It's a shame to learn this the hard way. I feel badly for John and other
clubs who face this issue. Dealing with the IRS is not fun. I'll think
good thoughts for a positive outcome.

Lynn Ostrem, Vice President and Education Chair
Crow River Investment Club
garbagecop@gmail.com
www.bivio.com/crowriver

Well, THANNNNNNNK YOU !!!
I called the IRS and after waiting 10 minutes on hold, they
removed the fine entirely. WOW !!! You guys rock! I
think that there would have been a good chance of our club
falling apart after 5 years if it had not been for your
help. Thanks again.

John
Grant Alchemy Investment Club



Rip West wrote:
> John,
> &nbsp;
> In all cases with which I am familiar, clubs were
> successful in getting this assessment waived. It is important to try to find
> someone to talk to by telephone, rather than protesting in writing. You should
> emphasize that (1) all members reported their k1 information timely on their
> 1040s, and (2) you are a poor struggling investment club, not familiar with the
> requirements of the IRS, and (3) the fine is way out of proportion to the
> amounts involved. Again stress that the IRS is out no money because of the
> inadvertent failure to file timely.
>
> Rip West
> Saint Paul,
> MN

My investment club just started and we are still in the
process of organizing it. I was told that it was required
for a investment club to file the first year but was
optional after that. I assume that is not true by these
emails. Can someone clear this up for me? I assume that
the club's filing is just to report the gains/losses to the
IRS.