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Except as noted below, follow the

is also imposed on any manager who

Initial taxes. Excise taxes are

line instructions on Schedule G.

willfully and without reasonable cause

imposed under section 4958 on each

consented to the lobbying expenditures,

excess benefit transaction. If a

Affiliated groups. If you are a

knowing that they would likely result in

manager receives an excess benefit

nonelecting member of an affiliated

the organization no longer qualifying

from an excess benefit transaction, the

group, you are not required to file Form

under section 501(c)(3).

manager may be liable for the tax on

4720.

disqualified persons and the tax on the

There is no limit on the amount of

If you are an electing member of an

organization manager. See Abatement,

this tax that may be imposed against

affiliated group and are filing a separate

earlier, for information on abatement,

either the organization or its managers.

return, enter on line 1 the amount from

refund, or relief from this tax.

Any organization manager who agreed

Schedule C (Form 990 or 990-EZ), Part

to the expenditure must pay the tax.

Tax on disqualified persons. The

II-A, column (a), line 1h. Enter on line 2

tax is 25% of the excess benefit and is

the amount from Schedule C (Form 990

Specific Instructions

paid by any disqualified person who

or 990-EZ), Part II-A, column (a), line

improperly benefited from the excess

1i.

Part I. Complete this part for all

benefit transaction.

disqualifying lobbying expenditures.

If you are an electing member of an

Tax on organization managers. If

affiliated group and are included in a

Part II. Enter in column (a) the names

tax is imposed on a disqualified person

group return, enter on line 1 your share

of all organization managers who took

for any excess benefit transaction, then

of the excess grassroot lobbying

part in making disqualifying lobbying

tax is also imposed on any manager

expenditures of the affiliated group, and

expenditures listed in Part I. See Tax

who knowingly participated in the

on line 2 your share of the excess

on organization managers above.

excess benefit transaction. The tax is

lobbying expenditures of the affiliated

If more than one organization

10% of the excess, not to exceed

group. Take these amounts from the

manager is listed in column (a), each is

$20,000 for each transaction.

schedule of excess lobbying

individually liable for the entire amount

expenditures that must be attached to

Additional tax on the disqualified

of tax in connection with the

Schedule C (Form 990 or 990-EZ). See

person. If the initial tax is imposed on

expenditure. However, the managers

the instructions for Schedule C (Form

an excess benefit transaction and the

who are liable for the tax may prorate

990 or 990-EZ), Part II-A, for a

transaction is not corrected within the

payment among themselves. Enter in

discussion of the lobbying provisions,

taxable period, then any disqualified

column (c) the tax each manager will

including how to figure the taxable

person involved shall be liable for an

pay.

amount.

additional tax equal to 200% of the

Carry the total amount in column (d)

excess benefit.

for each organization manager to Part

Schedule H—Taxes on

This additional tax is abated

II-A, column (g).

(refunded if collected) if the excess

Disqualifying Lobbying

benefit transaction is corrected within

the correction period (defined in

Schedule I—Initial Taxes

Expenditures (Section

Question B, under Specific Instructions

on Excess Benefit

4912)

for Page 1, earlier).

Transactions (Section

Taxable period. Taxable period

General Instructions

means the period beginning with the

4958)

date on which the excess benefit

Requirement. Schedule H must be

transaction occurs and ending on the

completed by certain organizations

General Instructions

earlier of:

whose section 501(c)(3) status is

1. The date a notice of deficiency

revoked because of excess lobbying

Requirement. Complete Schedule I

was mailed to the disqualified person

activities.

for any Excess benefit transaction in

for the initial tax on the excess benefit

which an Applicable organization

Exceptions. These taxes are not

transaction, or

provides an Excess benefit to a

imposed on a private foundation

2. The date on which the initial tax

Disqualified person. These terms are

(whose lobbying expenditures may be

on the excess benefit transaction for

discussed below.

subject to the tax on taxable

the disqualified person is assessed.

expenditures). These taxes also are not

Applicable organization. In

imposed on any organization for which

general, an applicable organization is

Excess benefit transaction. An

a section 501(h) election was in effect

any section 501(c)(3) (except a private

excess benefit transaction is any

at the time of the lobbying expenditures

foundation), 501(c)(4), or 501(c)(29)

transaction in which:

or that was not eligible to make a

organization.

1. An excess benefit is provided by

section 501(h) election.

Also, an applicable organization

the organization, directly or indirectly to,

Tax on organization. A tax of 5% of

includes any organization that was a

or for the use of, any disqualified

the lobbying expenditures is imposed

section 501(c)(3) (except a private

person, or

on the organization whose section

foundation), 501(c)(4) or 501(c)(29)

2. The amount of any economic

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

organization at any time during a

benefit provided to, or for the use of, a

excess lobbying activities.

five-year period ending on the date of

disqualified person is determined in

Tax on organization managers. A

an excess benefit transaction (the

whole or in part by the revenues of the

tax of 5% of the lobbying expenditures

lookback period).

organization and violates the private

-13-

Form 4720 Instructions

Instructions For Form 4720 - Return Of Certain Excise Taxes - Department Of The Treasury - 2011 Page 13

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