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 6
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31tax. If there was reasonable cause for not
Special Rules
M. Penalty for Failure To
paying the tax on time, the penalty can be
Section 4947(a)(1) nonexempt
File Timely, Completely, or
waived. However, interest is charged on
charitable trusts. Form 1041-ES should
any tax not paid on time, at the rate
Correctly
be used to pay any estimated tax on
provided by section 6621.
income subject to tax under section 1.
To avoid filing an incomplete return or
Estimated tax penalty. The section
Form 1041-ES also contains the
having to respond to requests for missing
6655 penalty for failure to pay estimated
estimated tax rules for paying the tax on
information, see General Instruction B.
tax applies to the tax on net investment
that income.
Against the organization. If an
income of domestic private foundations
Taxable private foundations. Form
organization does not file timely and
and section 4947(a)(1) nonexempt
1120-W should be used to figure any
completely, or does not furnish the correct
charitable trusts. The penalty also applies
estimated tax on income subject to tax
information, it must pay $20 for each day
to any tax on unrelated business income
under section 11. Form 1120-W contains
the failure continues ($100 a day if it is a
of a private foundation. Generally, if a
the estimated tax rules for paying the tax
large organization), unless it can show
private foundation’s tax liability is $500 or
on that income.
that the failure was due to reasonable
more and it did not make the required
cause. Those filing late (after the due
payments on time, then it is subject to the
P. Tax Payment Methods
date, including extensions) must attach
penalty.
an explanation to the return. The
for Domestic Private
maximum penalty for each return will not
For more details, see the discussion
Foundations
exceed the smaller of $10,000 ($50,000
of Form 2220 in General Instruction D.
for a large organization) or 5% of the
Whether the foundation uses the
gross receipts of the organization for the
O. Figuring and Paying
depository method of tax payment or the
year.
special option for small foundations, it
Estimated Tax
Large organization. A large
must pay the tax due (see Part VI) in full
organization is one that has gross
by the 15th day of the 5th month after the
A domestic exempt private foundation, a
receipts exceeding $1 million for the tax
end of its tax year.
domestic taxable private foundation, or a
year.
nonexempt charitable trust treated as a
Depository Method of Tax
Gross receipts. Gross receipts
private foundation must make estimated
Payment
means the gross amount received during
tax payments for the excise tax based on
the foundation’s annual accounting period
investment income if it can expect its
Some foundations (described below) are
from all sources without reduction for any
estimated tax (section 4940 tax minus
required to electronically deposit all
costs or expenses.
allowable credits) to be $500 or more.
depository taxes, including their tax
The number of installment payments it
payments for the excise tax based on
To figure the foundation’s gross
must make under the depository method
investment income.
receipts, start with Part I, line 12, column
is determined at the time during the year
(a), then add to it lines 6b and 10b, then
Electronic Deposit Requirement
that it first meets this requirement. For
subtract line 6a from that amount.
The foundation must make electronic
calendar-year taxpayers, the first deposit
Against the responsible person. The
deposits of all depository taxes (such as
of estimated taxes for a year generally
IRS will make written demand that the
employment tax or the excise tax based
should be made by May 15 of the year.
delinquent return be filed or the
on investment income) using the
information furnished within a reasonable
Although Form 990-W is used primarily
Electronic Federal Tax Payment System
time after the mailing of the notice of the
to compute the installment payments of
(EFTPS) in 2006 if:
demand. The person failing to comply
•
unrelated business income tax, it is also
The total deposits of such taxes in
with the demand on or before the date
used to determine the timing and
2004 were more than $200,000, or
specified will have to pay $10 for each
•
amounts of installment payments of the
The foundation was required to use
day the failure continues, unless there is
section 4940 tax based on investment
EFTPS in 2005.
reasonable cause. The maximum penalty
income. Compute separately any required
imposed on all persons for any one return
If the foundation is required to use
deposits of excise tax based on
is $5,000. If more than one person is
EFTPS and fails to do so, it may be
investment income and unrelated
liable for any failures, all such persons
subject to a 10% penalty. If the foundation
business income tax.
are jointly and severally liable for such
is not required to use EFTPS, it may
failures (see section 6652(c)).
To figure the estimated tax for the
participate voluntarily. To enroll in or get
excise tax based on investment income,
more information about EFTPS, call
Other penalties. Because this return
apply the rules of Part VI to your tax year
1-800-555-4477. To enroll online, visit
also satisfies the filing requirements of a
2006 estimated amounts for that part.
tax return under section 6011 for the tax
Enter the tax you figured on line 10a of
on investment income imposed by section
Depositing on time. For deposits made
Form 990-W.
4940 (or 4948 if an exempt foreign
by EFTPS to be on time, the foundation
organization), the penalties imposed by
must initiate the transaction at least 1
The Form 990-W line items and
section 6651 for not filing a return (without
business day before the date the deposit
instructions for large organizations also
reasonable cause) also apply.
is due.
apply to private foundations. For
There are also criminal penalties for
purposes of paying the estimated tax on
Deposits With Form 8109
willful failure to file and for filing fraudulent
net investment income, a “large
If the foundation does not use EFTPS,
returns and statements. See sections
organization” is one that had net
deposit estimated tax payments and any
7203, 7206, and 7207.
investment income of $1 million or more
balance due for the excise tax based on
for any of the 3 tax years immediately
N. Penalties for Not Paying
investment income with Form 8109,
preceding the tax year involved.
Federal Tax Deposit Coupon. If you do
Tax on Time
Penalty. A foundation that does not pay
not have a preprinted Form 8109, use
the proper estimated tax when due may
There is a penalty for not paying tax when
Form 8109-B to make deposits. You can
be subject to the estimated tax penalty for
due (section 6651). The penalty generally
get this form only by calling
the period of the underpayment. (See
is
1
/
of 1% of the unpaid tax for each
1-800-829-4933. Be sure to have your
2
sections 6655(b) and (d) and the Form
month or part of a month the tax remains
employer identification number (EIN)
2220 instructions.)
unpaid, not to exceed 25% of the unpaid
ready when you call.
-6-
Form 990-PF Instructions
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