Looking for a Form 4720 Templates? Download it for free!

Column (e). Enter for each person

total tax due on that transaction, then

description of acts that are not

listed in column (a) the tax on taxable

the IRS may charge the amount owed

considered self-dealing.

expenditures from Schedule E, Part II,

to one or more of them regardless of

Initial taxes on self-dealer. An initial

column (d), that the individual took part

the tax apportionment shown on this

tax of 10% of the amount involved is

in as a foundation manager.

return.

charged for each act of self-dealing

Column (f). Enter for each person

between a disqualified person and a

listed in column (a) the tax on political

private foundation for each year or part

expenditures from Schedule F, Part II,

Schedule A—Initial

of a year in the taxable period. Any

column (d), that the individual took part

disqualified person (other than a

Taxes on Self-Dealing

in as an organization or foundation

foundation manager acting only as

manager.

such) who takes part in the act of

(Section 4941)

self-dealing must pay the tax.

Column (g). Enter for each person

listed in column (a) the tax on

Initial taxes on foundation managers.

General Instructions

disqualifying lobbying expenditures

When a tax is imposed on a foundation

Requirement. All organizations that

from Schedule H, Part II, column (d),

manager for an act of self-dealing, the

answered “Yes” to question 1b or 1c in

that the individual took part in as an

tax will be 5% of the amount involved in

Part VII-B of Form 990-PF, or “Yes” to

organization manager.

the act of self-dealing for each year or

question 75b or 75c in Part VI-B of

part of a year in the taxable period.

Column (h). For each person listed in

Form 5227, must complete Schedule A.

However, the total tax imposed for all

column (a), enter the sum of:

Complete Parts I, II, and III of Schedule

years in the taxable period is limited to

1. Taxes that person owes as a

A only in connection with acts that are

$20,000 for each act of self-dealing.

disqualified person, from Schedule I,

subject to the tax on self-dealing.

The tax is imposed on any foundation

Part II, column (d), and

manager who took part in the act

2. Tax on excess benefit

Paying the tax and filing a Form

knowing that it was self-dealing except

transactions in which the organization

4720 is required for each year or part of

those foundation managers whose

manager participated knowing that the

a year in the taxable period that applies

participation was not willful and was

transaction was improper, from

to the act of self-dealing. Generally, the

due to reasonable cause. Any

Schedule I, Part III, column (d).

taxable period begins with the date on

foundation manager who took part in

which the self-dealing occurs and ends

the act of self-dealing must pay the tax.

Column (i). Enter for each person

on the earliest of:

•

listed in column (a) the tax on the entity

The date a notice of deficiency is

Specific Instructions

manager who approved or otherwise

mailed under section 6212, in

caused the entity to be a party to a

Part I. List each act of self-dealing in

connection with the initial tax imposed

prohibited tax shelter transaction from

Part I. Enter in column (d) the number

on the self-dealer,

•

Schedule J, Part II, column (d).

designation from Form 990-PF, Part

The date the initial tax on the

VII-B, question 1a, or Form 5227, Part

Column (j). Enter for each person

self-dealer is assessed, or

•

VI-B, question 75a, that applies to the

listed in column (a) the tax on taxable

The date correction of the act of

act. For example, “1a(1)” or “1a(4).”

distributions from sponsoring

self-dealing is completed.

organizations maintaining donor

Part II. Enter in column (a) the names

Self-dealing. Self-dealing includes

advised funds from Schedule K, Part II,

of all disqualified persons who took part

any direct or indirect:

column (d) that the individual took part

in the acts of self-dealing listed in Part

•

Sale, exchange, or leasing of

in as a manager.

I. If more than one disqualified person

property between a private foundation

took part in an act of self-dealing, each

Column (k). For each person listed in

and a disqualified person (see

column (a), enter the:

is individually liable for the entire tax in

definitions in Form 990-PF instructions),

•

connection with the act. But the

1. Tax imposed on a donor, donor

Lending of money or other extension

disqualified persons who are liable for

advisor, or related person, from

of credit between a private foundation

the tax may prorate the payment

Schedule L, Part II, column (d), and

and a disqualified person,

among themselves. Enter in column (c)

•

2. Tax on each fund manager who

Furnishing of goods, services, or

the tax to be paid by each disqualified

agreed to the making of a distribution of

facilities between a private foundation

person.

a prohibited benefit from Schedule L,

and a disqualified person,

•

Part III, column (d) that the individual

Carry the total amount in column (d)

Payment of compensation (or

took part in as a manager.

for each self-dealer to page 1, Part II-A,

payment or reimbursement of

column (c).

expenses) by a private foundation to a

Liability for tax. A person’s liability

disqualified person,

Part III. Enter in column (a) the names

for tax as a manager, self-dealer,

•

Transfer to, or use by or for the

of all foundation managers who took

disqualified person, donor, donor

benefit of, a disqualified person of the

part in the acts of self-dealing listed in

advisor, or related person, under

income or assets of a private

Part I, and who knew that they were

sections 4912, 4941, 4944, 4945, 4955,

foundation, and

acts of self-dealing (except for

4958, 4966, and 4967 is joint and

•

Agreement by a private foundation to

foundation managers whose

several. Therefore, if more than one

make any payment of money or other

participation was not willful and was

person owes tax on an act as a

property to a government official other

due to reasonable cause).

manager, self-dealer, disqualified

than an agreement to employ or make

person, donor, donor advisor, or related

If more than one foundation

a grant to that individual for any period

person, they may apportion the tax

manager took part in the act of

after the end of government service if

among themselves. However, when all

self-dealing, knowing that it was such

that individual will be ending

managers, self-dealers, donors, donor

an act, and participation was willful and

government service within a 90-day

advisors, related persons, or

not due to reasonable cause, each is

period.

disqualified persons who are liable for

individually liable for the entire tax in

tax on a particular transaction under

Exceptions to self-dealing. Go to

connection with the act. But the

sections 4912, 4941, 4944, 4945, 4955,

foundation managers liable for the tax

4958, 4966, or 4967 pay less than the

irm_07-027-015.html#d0e272 for a

may prorate the payment among

-6-

Form 4720 Instructions

Instructions For Form 4720 - Return Of Certain Excise Taxes On Charities And Other Persons - Department Of The Treasury - 2009 Page 6

Related Articles

Related forms

Related Categories