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

Enter the organization’s name and

person’s compensation and the

the instructions for Schedule D of this

EIN on each sheet. Use sheets that are

disqualified person’s total

form.) Paying the tax and filing a Form

the same size as the form and indicate

compensation was reasonable. See the

4720 are required for each year or part

clearly the line of the printed form to

instructions to Schedule I on page 12

of a year in the taxable period that

which the information relates.

for information on excess benefit

applies to the act or investment.

transactions.

Generally, the taxable period begins

with the date of the act or investment

Organizations Organized

and ends with the date corrective action

Rounding Off to Whole

or Created in a Foreign

is completed, a notice of deficiency is

Dollars

mailed, or the tax is assessed,

Country or U.S.

whichever comes first.

You may round off cents to whole

Possession

dollars on your return and schedules. If

Similar rules apply for the initial tax

you do round to whole dollars, you

Report all amounts in U.S. currency

liability resulting from failing to distribute

must round all amounts. To round, drop

(state conversion rate used) and give

income (Schedule B) and from

amounts under 50 cents and increase

information in English. Report items in

acquiring excess business holdings

amounts from 50 to 99 cents to the next

total, including amounts and

(Schedule C). Thus, the initial tax

dollar. For example, $1.39 becomes $1

transactions from both inside and

liability for those taxes continues to

and $2.50 becomes $3.

outside the United States.

accrue until the date a notice of

deficiency is mailed, the violation is

If you have to add two or more

Sections 4941 through 4945 and

corrected, or the tax is assessed,

amounts to figure the amount to enter

section 4955 do not apply to foreign

whichever comes first.

on a line, include cents when adding

private foundations that receive

the amounts and round off only the

substantially all of their support (other

total.

than gross investment income) from

Completing the

sources outside the United States.

Schedules

These organizations must complete this

Penalties and Interest

form and file it in the same manner as

Before completing any of the schedules

There are penalties for failure to file or

other private foundations. However,

in this return, read the applicable

to pay tax. There are also penalties for

these organizations, as well as

instructions. If any completed schedule

willful failure to file, supply information

foundation managers and self-dealers,

shows taxes owed, enter them on page

or pay tax, and for filing fraudulent

do not have to pay any tax that would

1 of this return.

returns and statements, that apply to

otherwise be due on this return.

public charities, private foundations,

The instructions for Schedules A

managers, donors, donor advisors,

Tax Payments

through L describe acts or transactions

related persons, and self-dealers who

subject to tax under Chapter 42. Also,

are required to file this return. See

Managers, self-dealers, disqualified

go to

sections 6651, 7203, 7206, and 7207.

persons, donors, donor advisors, and

index.html for a list of exceptions that

Also, see section 6684 for penalties

related persons, paying tax on the

eliminate any tax liability that would

that relate to tax liability under Chapter

organization’s Form 4720 must pay with

otherwise be shown on Schedules A

42.

the return the tax that applies to them

and E. Do not complete Schedules A

as shown in Part II-A, page 1.

and E if exceptions apply to all the acts

Interest at the underpayment rate

Managers, self-dealers, disqualified

or transactions. In general, question A

established under section 6621 is

persons, donors, donor advisors, and

on page 1 and Schedules A, B, C, D,

charged for any unpaid tax. The

related persons, who file separate

interest on underpayments is in addition

and E do not apply to public charities.

Forms 4720 must pay the applicable

to any penalties.

However, for tax years beginning after

tax with their separate returns. When

August 17, 2006, Schedule C will apply

managers do not sign the

to some public charities including donor

Abatement

organization’s Form 4720 to report their

advised funds and certain supporting

own tax liability, the amount of tax they

See section 4962 for rules on

organizations that are treated as private

owe should not be entered in Part II-B,

abatement, refund, or relief from

foundations for purposes of section

line 1.

payment of first tier taxes under

4943. See the instructions for Schedule

sections 4942 through 4945, 4955, and

C for a description of the public

Payment by a private foundation of

4958. To request abatement, refund, or

charities to which section 4943 now

any taxes owed by the foundation

relief under section 4962, write

applies.

managers or self-dealers will result in

“Request for Abatement Under Section

additional taxes under the self-dealing

Before completing Schedule C,

4962” in the top margin of Form 4720,

and taxable expenditure provisions.

page 1.

determine whether the organization or

Managers and self-dealers should pay

donor advised fund has excess

taxes imposed on them with their own

holdings in any business enterprise. If

check or money order.

Initial Tax Liability

the organization or donor advised fund

Disqualified persons and entity

If you pay an initial tax on self-dealing

has holdings subject to the tax on

managers should pay taxes on excess

or on investments that jeopardize

excess business holdings, complete

benefit transactions that are imposed

charitable purpose (figured on

Schedule C for each enterprise.

on them with their own check or money

Schedules A and D of Form 4720,

Before completing Schedule D,

order. Any reimbursement of a

respectively) for tax year 2006, the

determine whether the investment was

disqualified person’s tax liability from

payment may not satisfy the entire tax

program related. If not, complete

excess benefit transactions by the

liability for an act of self-dealing or a

Schedule D for each investment for

organization will be treated as an

jeopardy investment. (For the definition

which you answered “Yes” to Form

excess benefit transaction subject to

of self-dealing, see the instructions for

the tax unless the organization included

Schedule A of this form; for the

990-PF, Part VII-B, question 4a or b, or

Form 5227, Part VI-B, question 4a or b.

the reimbursement in the disqualified

definition of jeopardy investment, see

-4-

Form 4720 Instructions

Instructions For Form 4720 - Return Of Certain Excise Taxes On Charities And Other Persons - Department Of The Treasury - 2006 Page 4

Related Articles

Related forms

Related Categories