Instructions For Form 990-Pf - Return Of Private Foundation Or Section 4947(A)(1) Nonexempt Charitable Trust Treated As A Private Foundation - Internal Revenue Service - 2010 Page 22
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32Line 1b. If you answered “Yes” to any of
modified by Rev. Proc. 2009-32, 2009-28
understanding or expectation that any
the questions in 1a, you should answer
I.R.B. 142, for more information.
person will directly or indirectly pay these
“Yes” to 1b unless all of the acts engaged
premiums.
A grant from a nonoperating
in were “excepted” acts. Excepted acts
foundation may be a taxable expenditure
Report the premiums it paid and the
are described in Regulations sections
if made to any other supporting
premiums paid by others, but treated as
53.4941(d)-3 and 4 or appear in Notices
organization (including a functionally
paid by the private foundation, on Form
published in the Internal Revenue Bulletin
integrated Type III), if a disqualified
8870 and pay the excise tax (which is
relating to disaster assistance.
person of the private foundation controls
equal to premiums paid) on Form 4720.
the supporting organization or any of its
Line 2b. Taxes on failure to distribute
For more information, see Form 8870
supported organizations. Check “Yes” on
income. If you answer “No” to question
and Notice 2000-24, 2000-17 I.R.B. 952
Line 5a(4) if you made such a grant. See
2b, attach a statement explaining:
(Notice 2000-24, 2000-1 C.B. 952).
•
Notice 2006-109, 2006-51 I.R.B. 1121, as
All the facts regarding the incorrect
Line 7a. Answer “Yes” if the foundation
modified by Rev. Proc. 2009-32, 2009-28
valuation of assets, and
was a party to a prohibited tax shelter
•
I.R.B. 142, for more information.
The actions taken (or planned) to
transaction (“PTST”) as described in
comply with section 4942(a)(2)(B), (C),
Under section 4955, a section
section 4965(e) at any time during the tax
and (D) and the related regulations.
501(c)(3) organization must pay an excise
year.
tax for any amount paid or incurred on
Line 3a. A private foundation is not
Prohibited tax shelter transaction. In
behalf of or opposing any candidate for
treated as having excess business
general, prohibited tax shelter transaction
public office. The organization must pay
holdings in any enterprise if, together with
means any listed transaction and any
an additional excise tax if it does not
related foundations, it owns 2% or less of
prohibited reportable transaction.
correct the expenditure timely.
the voting stock and 2% or less in value
Listed transaction. A listed transaction,
of all outstanding shares of all classes of
A manager of a section 501(c)(3)
within the meaning of Code section
stock. (See “disqualified person” under
organization who knowingly agrees to a
6707A(c)(2), is a transaction that is the
General Instruction C.) A similar
political expenditure must pay an excise
same as, or substantially similar to, any
exception applies to a beneficial or profits
tax unless the agreement is not willful and
transaction that has been specifically
interest in any business enterprise that is
there is reasonable cause. A manager
identified by the Secretary in published
a trust or partnership.
who does not agree to a correction of the
guidance as a tax avoidance transaction
political expenditure may have to pay an
For more information about excess
for purposes of Code section 6011.
additional excise tax.
business holdings, see the Instructions for
Prohibited reportable transaction.
A section 501(c)(3) organization will
Form 4720.
Prohibited reportable transaction means
lose its exempt status if it engages in
Line 4. Taxes on investments that
any confidential transaction or any
political activity.
jeopardize charitable purposes. In
transaction with contractual protection (as
A political expenditure that is treated
general, an investment that jeopardizes
defined under regulations prescribed by
as an expenditure under section 4955 is
any of the charitable purposes of a private
the Secretary) (see Regulations section
not treated as a taxable expenditure
foundation is one for which a foundation
1.6011-4(b)(3) and (4)) which is a
under section 4945.
manager did not exercise ordinary
reportable transaction (as defined in
For purposes of the section 4955 tax,
business care to provide for the long-and
section 6707A(c)(1)).
when an organization promotes a
short-term financial needs of the
If the answer to this question is
candidate for public office (or is used or
foundation in carrying out its charitable
“Yes,” the foundation must also file
controlled by a candidate or prospective
purposes. For more details, see the
Form 8886-T.
candidate), amounts paid or incurred for
regulations under section 4944.
Line 7b. Answer “Yes” if the foundation
the following purposes are political
Line 5. Taxes on taxable expenditures
answered “Yes” to 7a, and it had net
expenditures:
and political expenditures. In general,
•
income or received proceeds attributable
Remuneration to the individual (or
payments made for the activities
to the PTST during the tax year.
candidate or prospective candidate) for
described on lines 5a(1) – (5) are taxable
speeches or other services,
If the foundation answers “Yes” to
expenditures. Go to
•
Travel expenses of the individual,
both lines 7a and 7b, it may be required
charities/foundations/article/
•
Expenses of conducting polls, surveys,
to file Form 4720 and pay tax with respect
0,,id=137250,00.html.
or other studies, or preparing papers or
to each PTST. The foundation’s
Except as discussed below, a grant by
other material for use by the individual,
managers also may be required to file
•
a private foundation to a public charity is
Expenses of advertising, publicity, and
Form 4720 and pay tax with respect to
not a taxable expenditure if the private
fundraising for such individual, and
the relevant PTSTs.
•
foundation does not earmark the grant for
Any other expense that has the primary
any of the activities described in lines
Part VIII. Information
effect of promoting public recognition or
5a(1) – (5), and there is no oral or written
otherwise primarily accruing to the benefit
About Officers, Directors,
agreement by which the grantor
of the individual.
foundation may cause the grantee to
Trustees, Foundation
See the regulations under section
engage in any such prohibited activity or
4945 for more information.
Managers, Highly Paid
to select the grant recipient.
Line 5b. If you answered “Yes” to any of
Employees, and
Grants made to exempt operating
the questions in 5a, you should answer
foundations (as defined in section
“Yes” to 5b unless all of the transactions
Contractors
4940(d)(2) and the instructions to Part VI)
engaged in were “excepted” transactions.
are not subject to the expenditure
Excepted transactions are described in
Line 1. List of officers, directors,
responsibility provisions of section 4945.
Regulations section 53.4945 and appear
trustees, etc. List the names,
in Notices published in the Internal
A grant from a nonoperating
addresses, and other information
Revenue Bulletin relating to disaster
foundation may be a taxable expenditure
requested for those who were officers,
assistance. For example, see IRS Pub.
if made to a Type III supporting
directors, and trustees (or any person
3833, Disaster Relief.
organization (as defined in 4943(f)(5))
who had responsibilities or powers similar
that is not a functionally integrated
Line 6b. Check “Yes” if, in connection
to those of officers, directors, or trustees)
supporting organization (as defined in
with any transfer of funds to a private
of the foundation at any time during the
4943(f)(5)(B)). Check “Yes” on Line 5a(4)
foundation, the foundation directly or
year. Each must be listed whether or not
if you made such a grant. See Notice
indirectly pays premiums on any personal
they receive any compensation from the
2006-109, 2006-51 I.R.B. 1121, as
benefit contract, or there is an
foundation. Give the address at which
-22-
Form 990-PF Instructions
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