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Nonprofit Taxpayers: What to Do If You Haven’t Filed Tax Returns in Years—A Complete Guide to Accounting, Bookkeeping, Compliance, and Avoiding IRS Scrutiny

By Mike Habib, EA – Los Angeles, CA

Introduction

If you’re a nonprofit leader, board member, or bookkeeper, you know your mission is to serve the public good. But what happens when your organization falls behind on IRS filings? Maybe you didn’t realize you had to file, or perhaps you were overwhelmed by other priorities. Now, you’re worried about penalties, losing tax-exempt status, or even an IRS audit.

You’re not alone. Many nonprofits—especially smaller ones—struggle with tax compliance. The good news? With the right knowledge and support, you can get back on track, protect your organization, and focus on your mission.

As an Enrolled Agent (EA) and founder of Mike Habib, EA, a Los Angeles, CA-based tax firm serving clients nationwide (including Americans abroad), I specialize in helping nonprofits resolve tax problems, represent them before the IRS and state agencies, and set up robust accounting and compliance systems.

This comprehensive FAQ will answer your most pressing questions about nonprofit tax compliance, accounting, bookkeeping, and how to avoid IRS scrutiny—even if you haven’t filed in years.

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If you’re searching for a tax expert in Los Angeles who can help you navigate the maze of IRS and state tax issues, look no further than Mike Habib, EA. Whether you’re dealing with an audit, back taxes, or just want to optimize your tax planning, Mike brings over two decades of experience, a national reach, and a personal touch that sets him apart.

In this comprehensive FAQ-style guide, we’ll explore how Mike Habib’s Los Angeles-based tax firm helps individuals, businesses, and even Americans living abroad resolve their tax problems and plan for a financially sound future.

Who Is Mike Habib, EA?

Mike Habib is a federally licensed Enrolled Agent (EA)—a designation granted by the IRS to tax professionals who demonstrate expertise in taxation and are authorized to represent taxpayers before the IRS. With over 20 years of experience, Mike has helped thousands of clients resolve complex tax issues, defend audits, and stay compliant with federal and state tax laws.

He’s not just a tax preparer—he’s a tax advocate, a negotiator, and a trusted advisor who works directly with the IRS, California Franchise Tax Board (FTB), Employment Development Department (EDD), and California Department of Tax and Fee Administration (CDTFA).

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Transfer Pricing International Tax Controversy: An In-Depth FAQ

  • Transfer pricing is the method by which multinational enterprises (MNEs) set prices for transactions between related entities across borders, directly impacting how profits are allocated and taxed in different countries.
  • Controversies arise due to differing national rules, the risk of profit shifting, double taxation, and disputes over the “arm’s length” standard.
  • Recent developments (including OBBB, effective July 4, 2025) and ongoing OECD initiatives are reshaping the landscape, with increased scrutiny, new compliance requirements, and evolving dispute resolution mechanisms.

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Los Angeles CDTFA Audit & Collection Representation: How Mike Habib, EA Can Help You Navigate the Process

Navigating a California Department of Tax and Fee Administration (CDTFA) sales & use tax audit or collection process can be daunting, especially for businesses and individuals unfamiliar with the complexities of California’s tax laws. Whether you’re facing a sales tax audit, use tax audit, or collection action, having an experienced tax professional by your side can make all the difference. At Mike Habib, EA, we specialize in CDTFA audit and collection representation, offering tailored solutions to protect your rights and minimize your tax liabilities.

In this article, we’ll explore the ins and outs of CDTFA audits and collections, answer frequently asked questions, and explain how our Los Angeles-based tax firm can help you achieve the best possible outcome.

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Running a small business in Southern California is a rewarding yet challenging endeavor. Among the many responsibilities that small business owners face, payroll employment tax compliance is one of the most critical—and often one of the most stressful. Payroll tax issues, particularly those related to Form 941, can lead to significant financial and operational challenges if not addressed promptly. However, the IRS provides several options for relief, including installment plans, penalty abatement, and other programs designed to help small businesses resolve their tax debt.

In this comprehensive guide, we’ll explore the most common payroll tax issues SoCal small businesses face, the options available for resolving employment Form 941-related problems, and strategies for navigating IRS processes effectively. Whether you’re a small business owner or a tax professional, this article will provide actionable insights to help you address payroll tax challenges with confidence.

Understanding Payroll Taxes and Form 941

What Are Payroll Taxes?

Payroll employment taxes are federal taxes that employers are required to withhold from their employees’ wages and remit to the IRS. These taxes include:

  1. Federal Income Tax Withholding: Based on the employee’s W-4 form.
  2. Social Security and Medicare Taxes (FICA): Both the employer and employee contribute to these taxes.
  3. Federal Unemployment Tax (FUTA): Paid solely by the employer to fund unemployment benefits.

Payroll taxes are considered “trust fund taxes,” meaning the employer is holding these funds in trust for the government. Failure to remit these taxes can result in severe penalties, including personal liability for business owners under the Trust Fund Recovery Penalty (TFRP).

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Trust Fund Recovery Penalty (Section 6672): Frequently Asked Questions

Expert guidance from Mike Habib, EA – Specializing in IRS tax representation and audit defense

What is the Trust Fund Recovery Penalty? 1153 letter?

The Trust Fund Recovery Penalty (TFRP) under Internal Revenue Code Section 6672 allows the IRS to personally assess business taxes against individuals deemed “responsible persons.” This penalty applies when a business fails to pay over employment taxes (federal income tax withholding, Social Security, and Medicare taxes withheld from employee paychecks).

The penalty is 100% of the unpaid trust fund taxes, making it one of the most severe penalties the IRS can impose. Unlike corporate debt, this penalty attaches directly to individuals, putting personal assets at risk.

Who Can the IRS Hold Responsible for Unpaid Payroll Taxes? 1153 letter?

The IRS can assess the TFRP against any person who:

  1. Was responsible for collecting, accounting for, or paying over the trust fund taxes, AND
  2. Willfully failed to ensure those taxes were paid

Importantly, you don’t need to have both responsibilities—either one can make you liable. The IRS interprets these requirements broadly, often targeting multiple individuals within an organization.

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Let’s be honest: seeing an IRS audit letter in your mailbox is a heart-stopping moment. Your palms get sweaty, your mind races, and a million questions flood your brain. What did I do wrong? Can I handle this myself? Is this going to ruin me?

Take a deep breath. You’re not alone, and an audit is not a foregone conclusion of doom. It’s a process—a complex, high-stakes process—but one that can be navigated successfully with the right guide.

In the sprawling, fast-paced economy of Los Angeles, from the creative industries in Hollywood to the tech startups in Silicon Beach and the countless small businesses that form the city’s backbone, the IRS is more active than ever. Facing them alone is like representing yourself in court; it’s possible, but rarely advisable.

This is where expert tax representation comes in, and in LA, one name consistently stands out: Mike Habib, EA (Enrolled Agent).

In this comprehensive FAQ, we’ll demystify the IRS audit process from start to finish and explain exactly how a dedicated, local expert like Mike Habib can be your strongest advocate, turning a moment of panic into a manageable, and often resolvable, situation.

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The skyline of Los Angeles is a testament to ambition, diversity, and relentless hustle. From the entertainment studios of Burbank to the tech startups in Silicon Beach, from the family-owned restaurants in East LA to the real estate moguls of Beverly Hills, this city thrives on a complex economic ecosystem. But with great opportunity comes great responsibility, especially when it comes to the intricate web of federal and state tax obligations.

In this labyrinth of forms, deadlines, codes, and government agencies, finding a guide you can trust is paramount. For countless individuals and businesses across Southern California, that guide is Mike Habib, an Enrolled Agent (EA) and the principal of his esteemed tax practice in Los Angeles, CA.

This comprehensive FAQ article is designed to demystify the world of tax preparation, planning, and problem resolution. We’ll explore why Mike Habib, EA, is consistently recognized as one of the best tax service providers in the region and how his expertise can protect your financial well-being.

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Tax issues in California can quickly become overwhelming. Between the IRS, the California Franchise Tax Board (FTB), the Employment Development Department (EDD), and the California Department of Tax and Fee Administration (CDTFA), taxpayers often feel trapped and unsure of their rights or options.

This FAQ article addresses the most common California tax problems—from unpaid back taxes and tax liens to bank levies and complicated residency disputes. We’ll also explain how Mike Habib, EA, a nationally recognized and BBB A+ rated Enrolled Agent, can represent you before the IRS and California taxing agencies to help resolve your tax matters effectively.

CA Tax Frequently Asked Questions (FAQ)

  1. What are the most common tax problems California residents face?

California taxpayers frequently encounter:

  • Unpaid back taxes (federal or state)
  • Tax liens filed against property or assets
  • Bank levies or wage garnishments
  • Residency disputes with the California FTB
  • Payroll and employment tax problems (EDD)
  • Sales and use tax audits (CDTFA)
  • Penalties and interest adding up over time

These problems often compound if ignored. Professional representation helps taxpayers protect their assets and negotiate the best possible outcome.

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For U.S. citizens and green card holders living abroad, managing taxes can feel like navigating a maze. The U.S. is one of the few countries in the world that taxes its citizens on their worldwide income, regardless of where they live. This means that even if you’ve left the U.S. and established a life overseas, you’re still required to file a U.S. tax return annually. Add to that the complexities of foreign income exclusions, tax credits, and reporting requirements like FBAR and FATCA, and it’s easy to see why so many expatriates feel overwhelmed.

Fortunately, the tax firm of Mike Habib, EA, specializes in helping U.S. expats manage their tax obligations with ease. With decades of experience in tax planning, preparation, and representation, Mike Habib, EA, provides personalized solutions to ensure compliance while minimizing tax liabilities. Whether you’re a digital nomad, a corporate employee working abroad, or a retiree enjoying life overseas, Mike Habib, EA, is your trusted partner for all things related to U.S. expat taxes.

Contact us today at 1-562-204-6700.

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Contact Information
Main Office
13215 Penn St #329
Whittier, CA 90602
Phone: 562-204-6700Toll Free: 877-788-2937Fax: 562-265-8622
There is a time for everything... a time to weep and a time to laugh, a time to mourn and a time to dance.
Ecclesiastes 3:1-4

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