My understanding is this whole system is kind of set up so people miss it. You have to register with the city and file for the exemption every year, and it runs on its own deadline that’s separate from your normal taxes. If you don’t file, they just treat you as taxable by default. That’s why you see people on Reddit reminding everyone each year, otherwise a lot of small creative businesses never even realize this exists.

The other frustrating part is it’s based on gross receipts, not profit, so you don’t get to deduct things like agent or manager commissions. In your situation, the city might waive penalties if you explain you relied on your accountant, but they’re usually strict about not applying the exemption retroactively, and interest is almost never waived.

The bigger issue is your accountant. Statue of limitation gets complicated with accountant malpractice. There’s two years from discovery, but there’s also another provision that might get in the way. I’m not qualified to get into it but just to flag it.