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“I had just about given up hope,” said Susan Onan-Swartz, Executive Director for BrickWays- a nonprofit located in Traverse City and member of the Michigan Nonprofit Association (MNA). BrickWays was nearly $20,000 in penalties because the IRS claimed they either didn’t receive their 2019 returns or paid them late. Onan-Swartz didn’t think their issues with the IRS would ever get straightened out.
But after Onan-Swartz reached out to MNA, she received a referral to the Congressman that represented their area, and Brickways’ troubles with the IRS were quickly resolved. “It was such a relief,” said Onan-Swartz. “I just could not believe that we were able to get the money back because I had just about given up hope. We felt so victimized, we're a nonprofit. Having $20,000 out there to the IRS was a really big deal.”
How the problem started
BrickWays has been a member of MNA since 2015. BrickWays’ mission is to improve the lives of those with physical and developmental disabilities by providing housing options, adapting to their individual needs, and maximizing their potential in ways that integrate their lives with the community around them.
“When we were filing in 2018, there was some notice that had come out that originally said we had to file electronically, but then they rescinded it because there wasn't really any format for us to follow to file electronically at that point. So, we were still paper filing. And then we started getting letters that they hadn't received our tax returns and at that point, we had about 3 organizations that had to file some version of the 990. It was multiple corporations that we were getting notices that [the IRS] hadn't received them. We were sending in multiple copies disputing the notice saying yes, we did send it. With our one property, our apartments, it got especially crazy, because they lost like the front page, or something got detached.”
“So, I actually had two separate sets of correspondence going on, somebody had my first file and then somebody else had my second file,” Onan-Swartz laughed. “I was going to lose my mind.”
“And then we started getting penalty notices. I mean, at one point, we had almost $20,000 out to the IRS in penalties for all the various corporations. Because you know, you have to pay it. You have to pay it upfront and then appeal. Because otherwise, they just keep adding and adding and adding. And then they threaten to take your property and everything.” Onan-Swartz clocked in a lot of time trying to fight this issue with the IRS. She wrote multiple letters and sent in multiple returns. She was tedious in her paperwork and kept track of all the correspondence. But once the COVID-19 pandemic began, she stopped getting a response.
“I got even more worried because then I was filing the 2020 tax returns, electronically at that point. All of a sudden, the system was saying, well, you haven’t filed your 2019 tax return. I'm like, oh no, we're going to have this whole thing, AGAIN.”
MNA steps in to help
Joan Gustafson is the external affairs officer at MNA. One of the groups she staffs is the MNA Public Policy Advisory Council. In addition to bi-monthly meetings, MNA sends out regular emails keeping the group updated on key public policy issues and civic and community engagement topics. Onan-Swartz is a member of the Council and when she received an email from Gustafson about nonprofits having problems with their tax returns and 990s, she reached out to Joan. “I told her my situation and Joan made some inquiries. Joan then connected me with Congressman Jack Bergman’s district office. And they were immediately on it.”
IRS troubles were resolved thanks to MNA’s advocacy
After a few months of working through the process, Brickways was able to resolve all of its outstanding issues with the IRS. Onan-Swartz is grateful to MNA for making the referral. “I'm sure they get tons of people reaching out to them and they don't have any way to sort of filter through what's legitimate and what isn't. But because Joan already had that background on the difficulties that the nonprofits were facing, and how widespread it was, she was able to add that credibility to the request.”
“It was such a relief”, said Onan-Swartz. “I just could not believe that we were able to get the money back because I had just about given up hope. There are a lot of repercussions beyond the fact of just being out of that money. A small corporation like us--can't get a response from the IRS if we don't have advocates. I'm a big supporter of MNA, and just so appreciative of all that they've done to help us.”
Michigan Nonprofit Association (MNA) serves the diverse nonprofit sector through advocacy, inclusive services, programming, and resources. We are champions for nonprofits and the communities they serve. If you would like to join our vast network of nonprofits or are interested in learning more about MNA, click here. To join Joan’s advisory council: click here.