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who agreed to the expenditure and who knew

otherwise primarily accruing to the benefit of

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

that it was a taxable expenditure. Foundation

the individual.

lobbying activities.

managers whose participation was not willful

Initial tax on organization or foundation.

Exceptions. These taxes are not imposed on

and was due to reasonable cause are not liable

The initial tax on the organization or foundation

a private foundation (whose lobbying

for the tax. Any foundation manager who took

is 10% of the amount involved.

expenditures may be subject to the tax on

part in the expenditure and is liable for the tax

taxable expenditures). These taxes also are

Initial tax on organization managers or

must pay the tax. The maximum total amount

not imposed on any organization for which a

foundation managers. An initial tax of 2

of tax on all foundation managers for any one

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

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

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

of the lobbying expenditures or that was not

any one expenditure) is imposed on any

foundation manager is liable for tax on a

eligible to make a section 501(h) election.

manager who agrees to an expenditure,

taxable expenditure, all those foundation

knowing that it is a political expenditure, unless

Tax on organization. A tax of 5% of the

managers are jointly and severally liable for the

the agreement is not willful and is due to

lobbying expenditures is imposed on the

tax.

reasonable cause.

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

Specific Instructions

revoked because of excess lobbying activities.

Any manager who agreed to the

Tax on organization managers. A tax of 5%

expenditure must pay the tax.

Part I. Complete this part for all taxable

of the lobbying expenditures is also imposed

expenditures. Enter in column (f) the number

Specific Instructions

on any manager who willfully and without

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

reasonable cause consented to the lobbying

Part I. Complete this part for all political

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

expenditures, knowing that they would likely

expenditures.

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

result in the organization no longer qualifying

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

under section 501(c)(3).

foundation managers who agreed to make the

managers who took part in making the political

There is no limit on the amount of this tax

expenditures listed in Part I. See Initial tax on

taxable expenditure. See Initial Tax on

that may be imposed against either the

organization managers or foundation

Foundation Managers on page 6. If more than

organization or its managers. Any organization

one foundation manager is listed in column (a),

managers above.

manager who agreed to the expenditure must

each is individually liable for the entire tax in

If more than one manager is listed in

pay the tax.

connection with the expenditure. However, the

column (a), each is individually liable for the

foundation managers who are liable for the tax

entire amount of tax on the expenditure.

Specific Instructions

may prorate the payment among themselves.

However, the managers who are liable for the

Part I. Complete this part for all disqualifying

Enter in column (c) the tax each foundation

tax may prorate payment among themselves.

lobbying expenditures.

manager will pay.

Enter in column (c) the tax each manager will

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

Carry the total amount in column (d) for

pay.

organization managers who took part in

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

Carry the total amount in column (d) for

column (e).

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

If more than one organization manager is

Schedule G—Tax on Excess

listed in column (a), each is individually liable

Political Expenditures

Lobbying Expenditures

for the entire amount of tax in connection with

the expenditure. However, the managers who

Requirement. Schedule G must be completed

General Instructions

are liable for the tax may prorate payment

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

among themselves. Enter in column (c) the tax

Requirement. Complete Schedule F if you

elected to be subject to the limitations on

each manager will pay.

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

lobbying expenditures under section 501(h)

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

Carry the total amount in column (d) for

and that made excess lobbying expenditures

if you entered an amount of political

each organization manager to page 1, Part

as defined in section 4911(b).

expenditure in question 81a, Part VI of Form

II-A, column (g).

Except as noted below, follow the line

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

instructions on Schedule G.

Form 990-EZ.

Affiliated groups. If you are a nonelecting

Schedule I—Initial Taxes on

Political expenditures. These include any

member of an affiliated group, you are not

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

Excess Benefit Transactions

required to file Form 4720.

organization that participates or intervenes in

(including the publication or distribution of

If you are an electing member of an

General Instructions

affiliated group and are filing a separate return,

statements) any political campaign on behalf

enter on line 1 the amount from Schedule A

of, or in opposition to, any candidate for public

Requirement. Complete Schedule I for any

office. The tax is imposed even if the political

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

Excess benefit transaction in which an

line 43. Enter on line 2 the amount from

expenditure gives rise to a revocation of the

Applicable organization provides an Excess

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

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

benefit to a Disqualified person. These terms

column (b), line 44.

These taxes apply in the case of both public

are discussed below.

charities and private foundations. When tax is

If you are an electing member of an

Applicable organization. In general, an

imposed under this provision in the case of a

affiliated group and are included in a group

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

private foundation, however, the expenditure in

return, enter on line 1 your share of the excess

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

question will not be treated as a taxable

grassroots lobbying expenditures of the

organization.

expenditure under section 4945.

affiliated group, and on line 2 your share of the

Also, an applicable organization includes

excess lobbying expenditures of the affiliated

For an organization formed primarily to

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

group. Take these amounts from the schedule

promote the candidacy or prospective

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

of excess lobbying expenditures that must be

candidacy of an individual for public office (or

any time during a five-year period ending on

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

that is effectively controlled by a candidate or

the date of an excess benefit transaction (the

See the instructions for Schedule A (Form 990

prospective candidate and is used primarily for

lookback period).

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

such purposes), amounts paid or incurred for

lobbying provisions, including how to figure the

Initial taxes. Excise taxes are imposed under

any of the following purposes are deemed

taxable amount.

section 4958 on each excess benefit

political expenditures:

•

transaction. If an organization manager

Remuneration to the candidate or

receives an excess benefit from an excess

prospective candidate for speeches or other

Schedule H—Taxes on

benefit transaction, the manager may be liable

services;

•

for the tax on disqualified persons and the tax

Travel expenses of the individual;

Disqualifying Lobbying

•

on the organization manager. See Abatement

Expenses of conducting polls, surveys, or

on page 3 for information on abatement,

other studies, or preparing papers or other

Expenditures

refund, or relief from this tax.

material for use by the individual;

•

Expenses of advertising, publicity, and

Tax on disqualified persons. The tax is

General Instructions

fundraising for such individual; and

25% of the excess benefit and is paid by any

•

Any other expense which has the primary

Requirement. Schedule H must be completed

disqualified person who improperly benefited

effect of promoting public recognition or

by certain organizations whose section

from the excess benefit transaction.

-7-

Form 4720 Instructions

Instructions For Form 4720 - Return Of Certain Excise Taxes On Charities And Other Persons - Department Of The Treasury - 2004 Page 7

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