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Any period in which a deficiency

the organization in a financial position

A personal benefit contract is (to the

cannot be assessed under section

not worse than that in which it would be

transferor) any life insurance, annuity,

6213(a) because a petition to the Tax

if the disqualified person had been

or endowment contract that benefits

Court for redetermination of the

dealing under the highest fiduciary

directly or indirectly the transferor, a

deficiency is pending, not extended by

standards.

member of the transferor’s family, or

any supplemental proceeding by the

any other person designated by the

Tax Court under section 4961(b),

transferor (other than an organization

If, when the return is filed, the

regarding whether correction was

described in section 170(c)).

foundation, entity, managers,

made, and

self-dealers, disqualified persons,

For more information, see Notice

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Any other period the IRS determines

donors, donor advisors, or related

2000-24, which is on page 952 of

is reasonable and necessary to correct

persons have corrected any acts or

Internal Revenue Bulletin 2000-17 at

the taxable event.

transactions resulting in liability for tax

under Chapter 42, answer “Yes” to

The taxable event will be treated as

Line 11

question B and give the following

occurring:

information separately for each

Enter the charitable remainder trust’s

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For the tax on failure to distribute

correction:

unrelated business taxable income on

income, on the first day of the tax year

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Schedule and item number of the act

line 11. Charitable remainder trusts

for which there was a failure to

or transaction that has been corrected,

must attach a schedule that shows how

distribute income,

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A description of the act or transaction

their unrelated business taxable income

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For the tax on excess business

that resulted in the tax,

was computed. The excise tax imposed

holdings, on the first day on which there

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A detailed description of the

on a charitable remainder trust is equal

were excess business holdings, or

correction made,

to the trust’s unrelated business taxable

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In any other case, on the date the

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The amount of any political

income.

event occurred.

expenditure recovered,

Attached schedule. Charitable

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Description of safeguards to prevent

Generally, the term “correction” has

remainder trusts may use Form 990-T

future political expenditures, and

the following meanings.

as the attached schedule. If the trust

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The date of correction.

uses Form 990-T as the attached

1. Section 4941 (Schedule A)

schedule, complete Form 990-T as

Undoing the transaction to the extent

For any acts or transactions the

follows:

possible, but in any case placing the

foundation, entity, managers,

private foundation in a financial position

self-dealers, disqualified persons,

1. Write “ATTACHMENT TO FORM

not worse than that in which it would be

donors, donor advisors, or related

4720” at the top of page 1.

if the disqualified person were dealing

persons have not corrected, give the

2. Enter the trust’s name under

under the highest fiduciary standards.

following information separately for

“Name of organization” and complete

2. Section 4942 (Schedule B)

each act:

item D and E at the top of page 1.

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Making sufficient qualifying distributions

Schedule and item number of the act

3. Complete Parts I and II. If a line

to compensate for deficient qualifying

or transaction that has not been

does not apply, leave it blank.

distributions for a prior tax year.

corrected,

4. Complete any of the Schedules

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3. Section 4943 (Schedule C)

A description of the act or

on Form 990-T or other forms or attach

Action that results in the foundation no

transaction, and

a schedule as required by any line on

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longer having excess business holdings

A detailed explanation of why

which an entry is made for Parts I and

in a business enterprise.

correction has not been made and what

II. Also, attach any schedule as may be

4. Section 4944 (Schedule D) An

steps are being taken to make the

required on any Schedule on Form

investment is considered to be removed

correction.

990-T or other form that you are

from jeopardy when the investment is

required to complete. However, if

If you are correcting deficient

sold or otherwise disposed of, and the

Schedule D (Form 1041) is required, do

distributions under section 4942 where

proceeds of such sale or other

not complete Part V of Schedule D

an election under section 4942(h)(2)

disposition are not investments that

(Form 1041).

was filed with the IRS, provide a copy

jeopardize the carrying out of the

5. Enter the amount from line 34 of

of the election. See the instructions for

foundation’s exempt purposes.

Form 990-T on Part I, line 11 of Form

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

5. Section 4945 (Schedule E)

4720. Do not complete Parts III-V or the

for more information.

a. Recovering part or all of the

signature area of Form 990-T.

expenditure to the extent recovery is

Part I

If you do not complete a Form 990-T

possible, and where full recovery is not

as the attached schedule, then attach a

possible, such additional corrective

Line 8

schedule with the same information as

action as is prescribed by regulations,

Form 990-T and its Schedules (as

If the organization has an entry

discussed above) including all the

b. Obtaining or making the report in

on this line, it must also file

TIP

information that must be attached to

question for a case that fails to comply

Form 8870.

Form 990-T and its Schedules, such as

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

other forms and attachments. Be sure

(expenditure responsibility).

Enter the total of all premiums paid

to enter the amount shown as unrelated

6. Section 4955 (Schedule F)

by the organization on any personal

business taxable income on Part I, line

Recovering part or all of the

benefit contract if the payment of

11 of Form 4720.

expenditure to the extent recovery is

premiums is in connection with a

possible, establishment of safeguards

transfer for which a deduction is not

Part II-A

to prevent future political expenditures,

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

and where full recovery is not possible,

Also, if there is an understanding or

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

such additional corrective action as is

expectation that any person will directly

addresses, and taxpayer identification

prescribed by the regulations.

or indirectly pay any premium on a

numbers of all persons who owe tax in

7. Section 4958 (Schedule I)

personal benefit contract for the

connection with the foundation or

Undoing the excess benefit to the

transferor, include those premium

organization, whether as managers,

extent possible and taking any

payments in the amount entered on this

self-dealers, disqualified persons,

additional measures necessary to place

line.

donors, donor advisors, or related

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Form 4720 Instructions

Instructions For Form 4720 - Instructions For Return Of Certain Excise Taxes - Department Of The Treasury - 2010 Page 5

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