The CP283 is a penalty notice for late-filed exempt organization returns (Form 990, 990-EZ, or 990-PF). The penalty is $20 per day for each day the return is late, up to the lesser of $10,000 or 5% of the organization's gross receipts. For organizations with gross receipts over $1 million, the penalty increases to $100 per day, up to $50,000.
Why This Penalty Matters
Beyond the financial penalty, failing to file Form 990 has a more devastating consequence. If an exempt organization fails to file for three consecutive years, its tax-exempt status is automatically revoked under IRC Section 6033(j). Automatic revocation means the organization loses its exemption, donations are no longer tax-deductible for donors, and the organization must reapply for exempt status through a new Form 1023 or 1024. Reinstatement is expensive, time-consuming, and not guaranteed.
Penalty Abatement
First-Time Abatement applies to exempt organization penalties. If the organization filed on time and stayed compliant for the past three years, FTA can remove the penalty for one late period. Request FTA by calling the number on the CP283.
Reasonable cause abatement is also available. Common reasonable cause arguments for exempt organizations include transition of leadership (new treasurer or board members), reliance on a volunteer who didn't understand the filing requirement, loss of records due to natural disaster or computer failure, and organizational restructuring that disrupted normal operations.
Small Organization Exception
Organizations with gross receipts normally $50,000 or less may file Form 990-N (e-Postcard) instead of the full Form 990. The e-Postcard is free, takes about five minutes, and there's no penalty for filing it late. If your organization qualifies, switch to the e-Postcard to avoid future CP283 notices.
If your nonprofit received a CP283, call us at (813) 229-7100. We handle exempt organization compliance regularly.