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jeopardize the carrying out of the

an election under section 4942(h)(2)

Specific Instructions for

foundation’s exempt purposes.

was filed with the IRS, provide a copy

5. Section 4945 (Schedule E) —

of the election. See the instructions for

Page 1

Form 990-PF, Part XIII, lines 4b and 4c

a. Recovering part or all of the

for more information.

expenditure to the extent recovery is

Question B. To avoid additional taxes

possible, and where full recovery is not

and penalties under sections 4941

Part I

possible, such additional corrective

through 4945, 4955, and 4958, and in

action as is prescribed by regulations,

some cases further initial taxes on the

Line 8

foundation, organization, and related

If the organization has an entry

b. Obtaining or making the report in

persons, a foundation, organization,

TIP

question for a case that fails to comply

on this line, it must also file

disqualified person, or manager must

with section 4945(h)(2) or (3)

Form 8870.

correct the taxable event within the

(expenditure responsibility).

correction period. The taxable event is

Enter the total of all premiums paid

6. Section 4955 (Schedule F) —

the act, failure to act, or transaction that

by the organization on any personal

Recovering part or all of the

resulted in the liability for initial taxes

benefit contract if the payment of

expenditure to the extent recovery is

under these provisions.

premiums is in connection with a

possible, establishment of safeguards

transfer for which a deduction is not

Generally, the correction period

to prevent future political expenditures,

allowed under section 170(f)(10)(A).

begins on the date the event occurs

and where full recovery is not possible,

Also, if there is an understanding or

and ends 90 days after the mailing date

such additional corrective action as is

expectation that any person will directly

of a notice of deficiency, under section

prescribed by the regulations.

or indirectly pay any premium on a

6212, in connection with the second tier

7. Section 4958 (Schedule I) —

personal benefit contract for the

tax imposed on that taxable event. That

Undoing the excess benefit to the

transferor, include those premium

time is extended by:

extent possible and taking any

•

payments in the amount entered on this

Any period in which a deficiency

additional measures necessary to place

line.

cannot be assessed under section

the organization in a financial position

6213(a) because a petition to the Tax

not worse than that in which it would be

A personal benefit contract is (to the

Court for redetermination of the

if the disqualified person had been

transferor) any life insurance, annuity,

deficiency is pending, not extended by

dealing under the highest fiduciary

or endowment contract that benefits

any supplemental proceeding by the

standards.

directly or indirectly the transferor, a

Tax Court under section 4961(b),

member of the transferor’s family, or

regarding whether correction was

If, when the return is filed, the

any other person designated by the

made, and

foundation, entity, managers,

transferor (other than an organization

•

Any other period the IRS determines

self-dealers, disqualified persons,

described in section 170(c)).

is reasonable and necessary to correct

donors, donor advisors, or related

For more information, see Notice

the taxable event.

persons have corrected any acts or

2000-24, which is on page 952 of

transactions resulting in liability for tax

The taxable event will be treated as

Internal Revenue Bulletin 2000-17 at

under Chapter 42, answer “Yes” to

occurring:

•

question B and give the following

For the tax on failure to distribute

information separately for each

income, on the first day of the tax year

Part II-A

correction:

for which there was a failure to

•

Schedule and item number of the act

Columns (a) and (b). List the names,

distribute income,

•

or transaction that has been corrected,

addresses, and taxpayer identification

For the tax on excess business

•

A description of the act or transaction

numbers of all persons who owe tax in

holdings, on the first day on which there

that resulted in the tax,

connection with the foundation or

were excess business holdings, or

•

A detailed description of the

organization, whether as managers,

In any other case, on the date the

correction made,

self-dealers, disqualified persons,

event occurred.

•

The amount of any political

donors, donor advisors, or related

Generally, the term “correction” has

expenditure recovered,

persons, as shown in Schedules A, D,

•

the following meanings.

Description of safeguards to prevent

E, F, H, I, J, K, and L.

future political expenditures, and

1. Section 4941 (Schedule A) —

Column (c). For each person listed in

•

The date of correction.

Undoing the transaction to the extent

column (a), enter the sum of:

possible, but in any case placing the

For any acts or transactions the

1. Taxes that person owes as a

private foundation in a financial position

foundation, entity, managers,

self-dealer, from Schedule A, Part II,

not worse than that in which it would be

self-dealers, disqualified persons,

column (d), and

if the disqualified person were dealing

donors, donor advisors, or related

2. Tax for acts of self-dealing in

under the highest fiduciary standards.

persons have not corrected, give the

which the individual participated as a

2. Section 4942 (Schedule B) —

following information separately for

manager, from Schedule A, Part III,

Making sufficient qualifying distributions

each act:

column (d).

to compensate for deficient qualifying

•

Schedule and item number of the act

distributions for a prior tax year.

or transaction that has not been

Column (d). Enter for each person

3. Section 4943 (Schedule C) —

corrected,

listed in column (a) the tax on jeopardy

Action that results in the foundation no

•

A description of the act or

investments from Schedule D, Part II,

longer having excess business holdings

transaction, and

column (d), that the individual took part

in a business enterprise.

•

A detailed explanation of why

in as a foundation manager.

4. Section 4944 (Schedule D) — An

correction has not been made and what

investment is considered to be removed

Column (e). Enter for each person

steps are being taken to make the

from jeopardy when the investment is

listed in column (a) the tax on taxable

correction.

sold or otherwise disposed of, and the

expenditures from Schedule E, Part II,

proceeds of such sale or other

If you are correcting deficient

column (d), that the individual took part

disposition are not investments that

distributions under section 4942 where

in as a foundation manager.

-5-

Form 4720 Instructions

Instructions For Form 4720 - Return Of Certain Excise Taxes On Charities And Other Persons - Department Of The Treasury - 2006 Page 5

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