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controlled entity. See the General

tax may prorate the payment among

information to cities, states, the District

Instructions for Schedule I for a

themselves. Enter in column (c) the tax

of Columbia, and U.S. Commonwealths

definition of those terms.

each manager will pay for each

or possessions to administer their laws.

distribution for which such manager

We may also disclose this information

Tax on donor, donor advisor, or

owes a tax.

to other countries under a tax treaty, to

related person. A tax of 125% of the

federal and state agencies to enforce

benefit resulting from the distribution is

Carry the total amount in column (d)

federal nontax criminal laws, or to

imposed on both the party who advised

for each donor, donor advisor, or

federal law enforcement and

as to the distribution (which might be a

related person to page 1, Part II-A,

intelligence agencies to combat

donor, donor advisor, or related party)

column (k).

terrorism. If you do not file this

and the party who received such

Part III. Enter in column (a) the names

information, you may be subject to

benefit (which might be a donor, donor

of all fund managers who agreed to

interest, penalties, and/or criminal

advisor, or related party). The advisor

make the distribution conferring the

prosecution.

and the party who received the benefit

prohibited benefit. If more than one

are jointly and severally liable for the

You are not required to provide the

fund manager is listed in column (a) for

tax.

information requested on a form that is

one distribution, each is individually

subject to the Paperwork Reduction Act

Tax on fund managers. If a tax is

liable for the entire tax for that

unless the form displays a valid OMB

imposed on a prohibited benefit

distribution. However, the fund

control number. Books or records

received by a donor, donor advisor, or

managers who are liable for the tax

relating to a form or its instructions

related person, a tax of 10% of the

may prorate the payment among

must be retained as long as their

amount of the prohibited benefit is

themselves. Enter in column (c) the tax

contents may become material in the

imposed on any fund manager who

each manager will pay for each

administration of any Internal Revenue

agreed to the distribution knowing that

distribution for which such manager

law. Generally, tax returns and return

it would confer a prohibited benefit. Any

owes a tax.

information are confidential, as required

fund manager who took part in the

Carry the total amount in column (d)

by section 6103.

distribution and is liable for the tax must

for each fund manager to page 1, Part

pay the tax. The maximum amount of

The time needed to complete and

II-A, column (k).

tax on all fund managers for any one

file this form will vary depending on

taxable distribution is $10,000. If more

Privacy Act and Paperwork

individual circumstances. The

Reduction Act Notice.

than one fund manager is liable for tax

estimated average time is:

on a taxable distribution, all such

We ask for the information on this form

Recordkeeping . . . . . .

55 hr., 0 min.

managers are jointly and severally

to carry out the Internal Revenue laws

liable for the tax.

of the United States. We need it to

Learning about the law

or the form . . . . . . . . .

ensure that you are complying with

16 hr., 18 min.

Exception. If a person engaged in an

these laws and to allow us to figure and

excess benefit transaction and received

Preparing the form . . .

23 hr., 30 min.

collect the right amount of tax. Certain

a prohibited benefit for the same

Copying, assembling,

individuals who owe tax under Chapter

transaction, the person is taxed under

and sending the form

41 or 42 of the Internal Revenue Code,

section 4958, and no additional tax is

to the IRS . . . . . . . . . .

1 hr., 36 min.

and who do not sign the Form 4720 of

imposed under section 4967 for the

the foundation or organization, must file

same transaction.

If you have comments concerning

a separate Form 4720 showing the tax

the accuracy of these time estimates or

Specific Instructions

owed and the name of the foundation

suggestions for making this form

or organization for which they owe tax.

simpler, we would be happy to hear

Part I. Complete this part for all

Sections 6001 and 6011 of the Internal

from you. You can write to the Internal

prohibited benefits.

Revenue Code require you to provide

Revenue Service, Tax Products

Part II. Enter in column (a) the names

the requested information if the tax

Coordinating Committee,

of all donors, donor advisors, and

applies to you. Section 6109 requires

SE:W:CAR:MP:T:T:SP, 1111

related persons who received a

you to provide your identifying number.

Constitution Ave. NW, IR-6526,

prohibited benefit. If more than one

Routine uses of this information include

Washington, DC 20224. Do not send

donor, donor advisor, or related person

disclosing it to the Department of

the tax form to this address. Instead,

is listed in column (a) for one

Justice for civil and criminal litigation

see Where To File on page 3.

distribution, each is individually liable

and to other federal agencies, as

for the entire tax for that distribution.

provided by law. We may disclose the

However, the donors, donor advisors,

or related persons who are liable for the

-15-

Form 4720 Instructions

Instructions For Form 4720 - Instructions For Return Of Certain Excise Taxes - Department Of The Treasury - 2010 Page 15

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