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the foundation, a tax of 2

% of the

4. Expenses of advertising, publicity, and

expenditure will be imposed on any foundation

fundraising for such individual; and

Schedule H—Taxes on

manager who agreed to the expenditure and

5. Any other expense which has the

Disqualifying Lobbying

who knew that it was a taxable expenditure.

primary effect of promoting public recognition

Foundation managers whose participation was

or otherwise primarily accruing to the benefit of

Expenditures

not willful and was due to reasonable cause

the individual.

are not liable for the tax. Any foundation

General Instructions

manager who took part in the expenditure and

Initial Tax on Organization or Foundation.

is liable for the tax must pay the tax. The

Requirement. Schedule H must be completed

The initial tax on the organization or foundation

maximum total amount of tax on all foundation

by certain organizations whose section

is 10% of the amount involved.

managers for any one taxable expenditure is

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

$5,000. If more than one foundation manager

Initial Tax on Organization Managers or

lobbying activities.

is liable for tax on a taxable expenditure, all

Foundation Managers. An initial tax of 2

Exceptions. These taxes are not imposed on

those foundation managers are jointly and

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

a private foundation (whose lobbying

severally liable for the tax.

any one expenditure) is imposed on any

expenditures may be subject to the tax on

manager who agrees to an expenditure,

taxable expenditures). These taxes also are

Specific Instructions

knowing that it is a political expenditure, unless

not imposed on any organization for which a

the agreement is not willful and is due to

Part I. Complete this part for all taxable

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

reasonable cause.

expenditures. Enter in column (f) the number

of the lobbying expenditures or that was not

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

eligible to make a section 501(h) election.

Any manager who agreed to the

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

Tax on Organization. A tax of 5% of the

expenditure must pay the tax.

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

lobbying expenditures is imposed on the

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

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

Specific Instructions

revoked because of excess lobbying activities.

foundation managers who agreed to make the

Part I. Complete this part for all political

taxable expenditure. See Initial Tax on

Tax on Organization Managers. A tax of 5%

Foundation Managers on page 6. If more

expenditures.

of the lobbying expenditures is also imposed

than one foundation manager is listed in

on any manager who willfully and without

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

column (a), each is individually liable for the

reasonable cause consented to the lobbying

managers who took part in making the political

entire tax in connection with the expenditure.

expenditures, knowing that they would likely

expenditures listed in Part I. See Initial Tax on

However, the foundation managers who are

result in the organization no longer qualifying

Organization Managers or Foundation

liable for the tax may prorate the payment

under section 501(c)(3).

Managers above.

among themselves. Enter in column (c) the tax

There is no limit on the amount of this tax

each foundation manager will pay.

that may be imposed against either the

If more than one manager is listed in

organization or its managers. Any organization

Carry the total amount in column (d) for

column (a), each is individually liable for the

manager who agreed to the expenditure must

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

entire amount of tax on the expenditure.

pay the tax.

column (e).

However, the managers who are liable for the

tax may prorate payment among themselves.

Specific Instructions

Enter in column (c) the tax each manager will

Schedule F—Initial Taxes on

pay.

Part I. Complete this part for all disqualifying

lobbying expenditures.

Political Expenditures

Carry the total amount in column (d) for

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

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

organization managers who took part in

General Instructions

making disqualifying lobbying expenditures

listed in Part I. See Tax on Organization

Requirement. Complete Schedule F if you

Managers above.

Schedule G—Tax on Excess

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

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

If more than one organization manager is

Lobbying Expenditures

if you entered an amount of political

listed in column (a), each is individually liable

expenditure in question 81a, Part VI of Form

for the entire amount of tax in connection with

Requirement. Schedule G must be completed

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

the expenditure. However, the managers who

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

Form 990-EZ.

are liable for the tax may prorate payment

elected to be subject to the limitations on

among themselves. Enter in column (c) the tax

lobbying expenditures under section 501(h)

Political Expenditures. These include any

each manager will pay.

and that made excess lobbying expenditures

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

as defined in section 4911(b).

Carry the total amount in column (d) for

organization that participates or intervenes in

each organization manager to page 1, Part

(including the publication or distribution of

Except as noted below, follow the line

II-A, column (g).

statements) any political campaign on behalf

instructions on Schedule G.

of, or in opposition to, any candidate for public

office. The tax is imposed even if the political

Affiliated Groups. If you are a nonelecting

Schedule I—Initial Taxes on

expenditure gives rise to a revocation of the

member of an affiliated group, you are not

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

Excess Benefit Transactions

required to file Form 4720.

These taxes apply in the case of both public

If you are an electing member of an

charities and private foundations. When tax is

General Instructions

affiliated group and are filing a separate return,

imposed under this provision in the case of a

enter on line 1 the amount from Schedule A

Requirement. Complete Schedule I for any

private foundation, however, the expenditure in

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

excess benefit transaction in which an

question will not be treated as a taxable

line 43. Enter on line 2 the amount from

applicable organization provides an Excess

expenditure under section 4945.

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

benefit to a Disqualified person.

For an organization formed primarily to

column (b), line 44.

Applicable organization. In general, an

promote the candidacy or prospective

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

candidacy of an individual for public office (or

If you are an electing member of an

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

that is effectively controlled by a candidate or

affiliated group and are included in a group

organization.

prospective candidate and is used primarily for

return, enter on line 1 your share of the excess

such purposes), amounts paid or incurred for

Also, an applicable organization includes

grassroots lobbying expenditures of the

any of the following purposes are deemed

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

affiliated group, and on line 2 your share of the

political expenditures:

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

excess lobbying expenditures of the affiliated

any time during a five-year period ending on

1. Remuneration to the candidate or

group. Take these amounts from the schedule

the date of an excess benefit transaction (the

prospective candidate for speeches or other

of excess lobbying expenditures that must be

lookback period).

services;

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

2. Travel expenses of the individual;

See the instructions for Schedule A (Form 990

Initial taxes. Excise taxes are imposed under

3. Expenses of conducting polls, surveys,

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

section 4958 on each excess benefit

or other studies, or preparing papers or other

lobbying provisions, including how to figure the

transaction. If an organization manager

material for use by the individual;

taxable amount.

receives an excess benefit from an excess

-7-

Form 4720 Instructions

Instructions For Form 4720 - Return Of Certain Excise Taxes On Charities And Other Persons -Department Of The Treasury - 2002 Page 7

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