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responsibility described in section 4945(h).

any of the following purposes are deemed

lobbying provisions, including how to figure the

Pub. 578 has additional information on special

political expenditures:

taxable amount.

•

rules and exceptions to the definition of taxable

Remuneration to the candidate or

expenditures given above.

prospective candidate for speeches or other

services;

Schedule H—Taxes on

Initial tax on foundation. An initial tax of 10%

•

Travel expenses of the individual;

of each taxable expenditure is imposed on the

•

Disqualifying Lobbying

Expenses of conducting polls, surveys, or

foundation.

other studies, or preparing papers or other

Expenditures

Initial tax on foundation managers. When a

material for use by the individual;

•

tax is imposed on a taxable expenditure of the

Expenses of advertising, publicity, and

General Instructions

foundation, a tax of 2

% of the expenditure

fundraising for such individual; and

•

will be imposed on any foundation manager

Any other expense which has the primary

Requirement. Schedule H must be completed

who agreed to the expenditure and who knew

effect of promoting public recognition or

by certain organizations whose section

that it was a taxable expenditure. Foundation

otherwise primarily accruing to the benefit of

501(c)(3) status is revoked because of excess

managers whose participation was not willful

the individual.

lobbying activities.

and was due to reasonable cause are not liable

Initial tax on organization or foundation.

Exceptions. These taxes are not imposed on

for the tax. Any foundation manager who took

The initial tax on the organization or foundation

a private foundation (whose lobbying

part in the expenditure and is liable for the tax

is 10% of the amount involved.

expenditures may be subject to the tax on

must pay the tax. The maximum total amount

Initial tax on organization managers or

taxable expenditures). These taxes also are

of tax on all foundation managers for any one

foundation managers. An initial tax of 2

not imposed on any organization for which a

taxable expenditure is $5,000. If more than one

of the amount involved (up to $5,000 of tax on

section 501(h) election was in effect at the time

foundation manager is liable for tax on a

any one expenditure) is imposed on any

of the lobbying expenditures or that was not

taxable expenditure, all those foundation

manager who agrees to an expenditure,

eligible to make a section 501(h) election.

managers are jointly and severally liable for the

knowing that it is a political expenditure, unless

tax.

Tax on organization. A tax of 5% of the

the agreement is not willful and is due to

lobbying expenditures is imposed on the

Specific Instructions

reasonable cause.

organization whose section 501(c)(3) status is

revoked because of excess lobbying activities.

Any manager who agreed to the

Part I. Complete this part for all taxable

expenditure must pay the tax.

expenditures. Enter in column (f) the number

Tax on organization managers. A tax of 5%

designation from Form 990-PF, Part VII-B,

of the lobbying expenditures is also imposed

Specific Instructions

question 5a, or Form 5227, Part VI-B, question

on any manager who willfully and without

5a, that applies to the act; for example, “5a(1).”

reasonable cause consented to the lobbying

Part I. Complete this part for all political

expenditures, knowing that they would likely

expenditures.

Part II. Enter in column (a) the names of all

result in the organization no longer qualifying

foundation managers who agreed to make the

Part II. Enter in column (a) the names of all

under section 501(c)(3).

taxable expenditure. See Initial Tax on

managers who took part in making the political

Foundation Managers on page 6. If more than

expenditures listed in Part I. See Initial tax on

There is no limit on the amount of this tax

one foundation manager is listed in column (a),

that may be imposed against either the

organization managers or foundation

organization or its managers. Any organization

each is individually liable for the entire tax in

managers above.

connection with the expenditure. However, the

manager who agreed to the expenditure must

If more than one manager is listed in

foundation managers who are liable for the tax

pay the tax.

column (a), each is individually liable for the

may prorate the payment among themselves.

entire amount of tax on the expenditure.

Specific Instructions

Enter in column (c) the tax each foundation

However, the managers who are liable for the

manager will pay.

Part I. Complete this part for all disqualifying

tax may prorate payment among themselves.

lobbying expenditures.

Enter in column (c) the tax each manager will

Carry the total amount in column (d) for

pay.

each foundation manager to page 1, Part II-A,

Part II. Enter in column (a) the names of all

column (e).

organization managers who took part in

Carry the total amount in column (d) for

making disqualifying lobbying expenditures

each manager to page 1, Part II-A, column (f).

listed in Part I. See Tax on organization

managers above.

Schedule F—Initial Taxes on

Schedule G—Tax on Excess

If more than one organization manager is

Political Expenditures

listed in column (a), each is individually liable

Lobbying Expenditures

for the entire amount of tax in connection with

General Instructions

the expenditure. However, the managers who

Requirement. Schedule G must be completed

are liable for the tax may prorate payment

by eligible section 501(c)(3) organizations that

Requirement. Complete Schedule F if you

among themselves. Enter in column (c) the tax

elected to be subject to the limitations on

answered “Yes” to question 5a(2) and 5b of

each manager will pay.

lobbying expenditures under section 501(h)

Form 990-PF, Part VII-B. Complete Schedule F

and that made excess lobbying expenditures

Carry the total amount in column (d) for

if you entered an amount of political

as defined in section 4911(b).

each organization manager to page 1, Part

expenditure in question 81a, Part VI of Form

II-A, column (g).

990, or in question 37a, Part V, of

Except as noted below, follow the line

Form 990-EZ.

instructions on Schedule G.

Political expenditures. These include any

Affiliated groups. If you are a nonelecting

Schedule I—Initial Taxes on

amount paid or incurred by a section 501(c)(3)

member of an affiliated group, you are not

organization that participates or intervenes in

required to file Form 4720.

Excess Benefit Transactions

(including the publication or distribution of

If you are an electing member of an

statements) any political campaign on behalf

affiliated group and are filing a separate return,

General Instructions

of, or in opposition to, any candidate for public

enter on line 1 the amount from Schedule A

office. The tax is imposed even if the political

Requirement. Complete Schedule I for any

(Form 990 or 990-EZ), Part VI-A, column (b),

expenditure gives rise to a revocation of the

Excess benefit transaction in which an

line 43. Enter on line 2 the amount from

organization’s section 501(c)(3) status.

Applicable organization provides an Excess

Schedule A (Form 990 or 990-EZ), Part VI-A,

benefit to a Disqualified person. These terms

These taxes apply in the case of both public

column (b), line 44.

are discussed below.

charities and private foundations. When tax is

If you are an electing member of an

imposed under this provision in the case of a

Applicable organization. In general, an

affiliated group and are included in a group

private foundation, however, the expenditure in

applicable organization is any section 501(c)(3)

return, enter on line 1 your share of the excess

question will not be treated as a taxable

(except a private foundation) or any 501(c)(4)

grassroots lobbying expenditures of the

expenditure under section 4945.

organization.

affiliated group, and on line 2 your share of the

For an organization formed primarily to

excess lobbying expenditures of the affiliated

Also, an applicable organization includes

promote the candidacy or prospective

group. Take these amounts from the schedule

any organization that was a 501(c)(3) (except a

candidacy of an individual for public office (or

of excess lobbying expenditures that must be

private foundation) or 501(c)(4) organization at

that is effectively controlled by a candidate or

attached to Schedule A (Form 990 or 990-EZ).

any time during a five-year period ending on

prospective candidate and is used primarily for

See the instructions for Schedule A (Form 990

the date of an excess benefit transaction (the

such purposes), amounts paid or incurred for

or 990-EZ), Part VI-A, for a discussion of the

lookback period).

-7-

Form 4720 Instructions

Instructions For Form 4720 - Return Of Certain Excise Taxes On Charities And Other Persons - Department Of The Treasury - 2005 Page 7

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