Instructions For Form 990-Pf - Return Of Private Foundation Or Section 4947(A)(1) Nonexempt Charitable Trust Treated As A Private Foundation - Return Of Private Foundation Or Section 4947(A)(1) Nonexempt Charitable Trust Treated As A Private Foundation - Page 20
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31also means the creator of the trust
answer is “Yes” to question 1b, 1c, 2b,
4940(d)(2) and the instructions to Part VI)
(section 507(d)(2)).
3b, 4a, 4b, 5b, or 6b, complete and file
are not subject to the expenditure
Form 4720, unless an exception applies.
responsibility provisions of section 4945.
The term “person” includes individuals,
Line 1 — Self-dealing. The activities
Under section 4955, a section
trusts, estates, partnerships, associations,
listed in 1a(1) – (6) are considered
501(c)(3) organization must pay an excise
corporations, and other exempt
self-dealing under section 4941 unless
organizations.
tax for any amount paid or incurred on
one of the exceptions applies. See
behalf of or opposing any candidate for
Each contribution or bequest must be
Publication 578, Tax Information for
public office. The organization must pay
valued at fair market value on the date it
Private Foundations and Foundation
an additional excise tax if it does not
was received.
Managers.
correct the expenditure timely.
Any person who is a substantial
The terms “disqualified person” and
A manager of a section 501(c)(3)
contributor on any date will remain a
“foundation manager” are defined in
organization who knowingly agrees to a
substantial contributor for all later periods.
General Instruction C.
political expenditure must pay an excise
However, a person will cease to be a
tax unless the agreement is not willful and
Line 1b. If you answered “Yes” to any of
substantial contributor with respect to any
there is reasonable cause. A manager
the questions in 1a, you should answer
private foundation if:
who does not agree to a correction of the
“Yes” to 1b unless all of the acts engaged
1. The person, and all related
political expenditure may have to pay an
in were “excepted” acts. Excepted acts
persons, made no contributions to the
additional excise tax.
are described in Regulations sections
foundation during the 10-year period
53.4941(d)-3 and 4 or appear in Notices
A section 501(c)(3) organization will
ending with the close of the taxable year;
published in the Internal Revenue
lose its exempt status if it engages in
2. The person, or any related person,
Bulletin, relating to disaster assistance.
political activity.
was never the foundation’s manager
Line 2b — Taxes on failure to distribute
A political expenditure that is treated
during this 10-year period; and
income. If you answer “No” to question
as an expenditure under section 4955 is
3. The aggregate contributions made
2b, attach a statement explaining:
not treated as a taxable expenditure
by the person, and related persons, are
•
All the facts regarding the incorrect
under section 4945.
determined by the IRS to be insignificant
valuation of assets, and
For purposes of the section 4955 tax,
compared to the aggregate amount of
•
The actions taken (or planned) to
when an organization promotes a
contributions to the foundation by any
comply with section 4942(a)(2)(B), (C),
candidate for public office (or is used or
other person and the appreciated value of
and (D) and the related regulations.
controlled by a candidate or prospective
contributions held by the foundation.
Line 3a. A private foundation is not
candidate), amounts paid or incurred for
treated as having excess business
The term “related person” includes any
the following purposes are political
other person who would be a disqualified
holdings in any enterprise if, together with
expenditures:
•
person because of a relationship with the
related foundations, it owns 2% or less of
Remuneration to the individual (or
the voting stock and 2% or less in value
substantial contributor (section 4946).
candidate or prospective candidate) for
When the substantial contributor is a
of all outstanding shares of all classes of
speeches or other services,
•
corporation, the term also includes any
stock. (See “disqualified person” under
Travel expenses of the individual,
•
officer or director of the corporation. The
General Instruction C.) A similar
Expenses of conducting polls, surveys,
term “substantial contributor” does not
exception applies to a beneficial or profits
or other studies, or preparing papers or
include public charities (organizations
interest in any business enterprise that is
other material for use by the individual,
•
described in section 509(a)(1), (2), or (3)).
a trust or partnership.
Expenses of advertising, publicity, and
fundraising for such individual, and
Line 11 — Public inspection
For more information about excess
•
Any other expense that has the primary
requirements and website address. All
business holdings, see Pub. 578 and the
effect of promoting public recognition or
domestic private foundations (including
instructions for Form 4720.
otherwise primarily accruing to the benefit
section 4947(a)(1) nonexempt charitable
Line 4 — Taxes on investments that
of the individual.
trusts treated as private foundations) are
jeopardize charitable purposes. In
subject to the public inspection
See the regulations under section
general, an investment that jeopardizes
requirements. See General Instruction Q
4945 for more information.
any of the charitable purposes of a private
for information on making the foundation’s
foundation is one for which a foundation
Line 5b. If you answered “Yes” to any of
annual returns and exemption application
manager did not exercise ordinary
the questions in 5a, you should answer
available for public inspection.
business care to provide for the long- and
“Yes” to 5b unless all of the transactions
Enter the foundation’s website address
short-term financial needs of the
engaged in were “excepted” transactions.
foundation in carrying out its charitable
Excepted transactions are described in
if the foundation has a website.
purposes. For more details, see Pub. 578
Otherwise, enter “N/A.”
Regulations section 53.4945 or appear in
and the regulations under section 4944.
Notices published in the Internal Revenue
Line 13 — Section 4947(a)(1) trusts.
Bulletin, relating to disaster assistance.
Line 5 — Taxes on taxable
Section 4947(a)(1) nonexempt charitable
expenditures and political
trusts that file Form 990-PF instead of
Line 6b. Check “Yes” if, in connection
expenditures. In general, payments
with any transfer of funds to a private
Form 1041 must complete this line. The
made for the activities described on lines
foundation, the foundation directly or
trust should include exempt-interest
5a(1) – (5) are taxable expenditures. See
dividends received from a mutual fund or
indirectly pays premiums on any personal
Pub. 578 for exceptions.
benefit contract, or there is an
other regulated investment company as
understanding or expectation that any
well as tax-exempt interest received
A grant by a private foundation to a
person will directly or indirectly pay these
directly.
public charity is not a taxable expenditure
premiums.
if the private foundation does not earmark
Part VII-B—Activities for
the grant for any of the activities
Report the premiums it paid and the
described in lines 5a(1) – (5), and there is
premiums paid by others, but treated as
Which Form 4720 May Be
no oral or written agreement by which the
paid by the private foundation, on Form
Required
grantor foundation may cause the grantee
8870 and pay the excise tax (which is
to engage in any such prohibited activity
equal to premiums paid) on Form 4720.
The purpose of these questions is to
or to select the grant recipient.
determine if there is any initial excise tax
For more information, see Form 8870
due under sections 170(f)(10),
Grants made to exempt operating
and Notice 2000-24, 2000-17 I.R.B. 952
4941 – 4945, and section 4955. If the
foundations (as defined in section
(Notice 2000-24, 2000-1, C.B., 952.)
-20-
Form 990-PF Instructions
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