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Column (f). Enter for each person

charged for each act of self-dealing

listed in column (a) the tax on political

Schedule A—Initial

between a disqualified person and a

expenditures from Schedule F, Part II,

private foundation for each year or part

Taxes on Self-Dealing

column (d), that the individual took part

of a year in the taxable period. Any

in as an organization or foundation

disqualified person (other than a

(Section 4941)

manager.

foundation manager acting only as

such) who takes part in the act of

Column (g). Enter for each person

General Instructions

self-dealing must pay the tax.

listed in column (a) the tax on

Requirement. All organizations that

Initial taxes on foundation managers.

disqualifying lobbying expenditures

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

When a tax is imposed on a foundation

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

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

manager for an act of self-dealing, the

that the individual took part in as an

question 1b or 1c in Part VI-B of Form

tax will be 5% (2

% for acts that took

organization manager.

5227, must complete Schedule A.

place in a tax year beginning before

Column (h). For each person listed in

Complete Parts I, II, and III of Schedule

August 18, 2006) of the amount

column (a), enter the sum of:

involved in the act of self-dealing for

A only in connection with acts that are

1. Taxes that person owes as a

each year or part of a year in the

subject to the tax on self-dealing.

disqualified person, from Schedule I,

taxable period. However, the total tax

Paying the tax and filing a Form

Part II, column (d), and

imposed for all years in the taxable

4720 is required for each year or part of

2. Tax on excess benefit

period is limited to $20,000 ($10,000 for

a year in the taxable period that applies

transactions in which the organization

acts that took place in a tax year

to the act of self-dealing. Generally, the

manager participated knowing that the

beginning before August 18, 2006) for

taxable period begins with the date on

transaction was improper, from

each act of self-dealing. The tax is

which the self-dealing occurs and ends

Schedule I, Part III, column (d).

imposed on any foundation manager

on the earliest of:

•

who took part in the act knowing that it

The date a notice of deficiency is

Column (i). Enter for each person

was self-dealing except those

mailed under section 6212, in

listed in column (a) the tax on the entity

foundation managers whose

connection with the initial tax imposed

manager who approved or otherwise

participation was not willful and was

on the self-dealer,

caused the entity to be a party to a

•

due to reasonable cause. Any

The date the initial tax on the

prohibited tax shelter transaction from

foundation manager who took part in

self-dealer is assessed, or

Schedule J, Part II, column (d).

•

the act of self-dealing must pay the tax.

The date correction of the act of

self-dealing is completed.

Column (j). Enter for each person

Specific Instructions

listed in column (a) the tax on taxable

Self-dealing. Self-dealing includes any

Part I. List each act of self-dealing in

distributions from sponsoring

direct or indirect:

•

Part I. Enter in column (d) the number

organizations maintaining donor

Sale, exchange, or leasing of

designation from Form 990-PF, Part

advised funds from Schedule K, Part II,

property between a private foundation

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

column (d) that the individual took part

and a disqualified person (see

VI-B, question 1a, that applies to the

in as a manager.

definitions in Form 990-PF instructions),

•

act. For example, “1a(1)” or “1a(4).”

Lending of money or other extension

Column (k). For each person listed in

Part II. Enter in column (a) the names

of credit between a private foundation

column (a), enter the:

of all disqualified persons who took part

and a disqualified person,

1. Tax imposed on a donor, donor

•

in the acts of self-dealing listed in Part

Furnishing of goods, services, or

advisor, or related person, from

I. If more than one disqualified person

facilities between a private foundation

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

took part in an act of self-dealing, each

and a disqualified person,

2. Tax on each fund manager who

•

is individually liable for the entire tax in

Payment of compensation (or

agreed to the making of a distribution of

connection with the act. But the

payment or reimbursement of

a prohibited benefit from Schedule L,

disqualified persons who are liable for

expenses) by a private foundation to a

Part III, column (d) that the individual

the tax may prorate the payment

disqualified person,

took part in as a manager.

•

among themselves. Enter in column (c)

Transfer to, or use by or for the

the tax to be paid by each disqualified

benefit of, a disqualified person of the

A person’s liability for tax as a

person.

income or assets of a private

manager, self-dealer, disqualified

foundation, and

Carry the total amount in column (d)

person, donor, donor advisor, or related

•

Agreement by a private foundation to

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

person, under sections 4912, 4941,

make any payment of money or other

column (c).

4944, 4945, 4955, 4958, 4966, and

property to a government official (go to

Part III. Enter in column (a) the names

4967 is joint and several. Therefore, if

of all foundation managers who took

more than one person owes tax on an

index.html for more information), other

part in the acts of self-dealing listed in

act as a manager, self-dealer,

than an agreement to employ or make

Part I, and who knew that they were

disqualified person, donor, donor

a grant to that individual for any period

acts of self-dealing (except for

advisor, or related person, they may

after the end of government service if

foundation managers whose

apportion the tax among themselves.

that individual will be ending

participation was not willful and was

However, when all managers,

government service within a 90-day

due to reasonable cause).

self-dealers, donors, donor advisors,

period.

related persons, or disqualified persons

If more than one foundation

Exceptions to self-dealing. Go to

who are liable for tax on a particular

manager took part in the act of

transaction under sections 4912, 4941,

self-dealing, knowing that it was such

index.html for a description of acts that

4944, 4945, 4955,4958, 4966, or 4967

an act, and participation was willful and

are not considered self-dealing.

pay less than the total tax due on that

not due to reasonable cause, each is

transaction, then the IRS may charge

Initial taxes on self-dealer. An initial

individually liable for the entire tax in

the amount owed to one or more of

tax of 10% (5% for acts that took place

connection with the act. But the

them regardless of the tax

in a tax year beginning before August

foundation managers liable for the tax

apportionment shown on this return.

18, 2006) of the amount involved is

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 - 2006 Page 6

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