Yikes. We just received a letter from the IRS saying our tax returns are incomplete and they (the IRS) do not consider our taxes filed until they have all of the information needed to process it.

Sad thing is, we hired a CPA to do our taxes. He has his own business and is no way affiliated with our PTO or school (no kids at the school, isn't a friend of someone at the school, etc.). We decided to hire a professional because no one knew how to do taxes for a non-profit, and since we were a new organization in 2004, we wanted to make sure we were doing everything right! We hired this particular CPA because he said he does taxes for about 8 other non-profit groups.

Anyway, the law says the IRS can charge us a $20 per day penalty for incomplete tax returns (or 5% of our total income, whichever is less). Do you think they'll come after us? Has anyone here ever had to pay penalties to the IRS? What is our CPA's liability in this matter?