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 - 2003 Page 9
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30excise taxes under sections 4948(a) and
A significant disposition of assets
termination is due (or would be due if a
4940, but are subject to income tax under
does not include any disposition for a tax
return were required).
subtitle A of the Code.
year if:
The organization will be allowed a
1. The total of the dispositions for the
reasonable period of time to file any
Certain foreign foundations are not
tax year is less than 25% of the fair
private foundation returns required (for
required to send copies of annual returns
market value of the net assets of the
the last year of the termination period) but
to state officials, or comply with the public
organization at the beginning of the tax
not previously filed if it is later determined
inspection and notice requirements of
year, and
that the organization did not terminate its
annual returns. (See General Instructions
private foundation status. Interest on any
2. The total of the related dispositions
G and Q.)
tax due will be charged from the original
made during prior tax years (if a
due date of the Form 990-PF, but
disposition is part of a series of related
T. Liquidation, Dissolution,
penalties under sections 6651 and 6652
dispositions made during these prior tax
will not be assessed if the Form 990-PF is
years) is less than 25% of the fair market
Termination, or
filed within the period allowed by the IRS.
value of the net assets of the organization
Substantial Contraction
at the beginning of the tax year in which
V. Special Rules for
any of the series of related dispositions
If there is a liquidation, dissolution,
was made.
termination, or substantial contraction
Section 507(b)(1)(B)
(defined below) of the organization,
The facts and circumstances of the
Terminations
attach:
particular case will determine whether a
1. A statement to the return
If the organization is terminating its
significant disposition has occurred
explaining it,
private foundation status under the
through a series of related dispositions.
2. A certified copy of the liquidation
60-month provisions of section
Ordinarily, a distribution described in
plan, resolution, etc. (if any) and all
507(b)(1)(B), special rules apply. (See
section 170(b)(1)(E)(ii) (relating to private
amendments or supplements that were
General Instructions T and U.) Under
foundations making qualifying
not previously filed,
these rules, the organization may file
distributions out of corpus equal to 100%
3. A schedule that lists the names and
Form 990-PF without paying the tax
of contributions received during the
based on investment income if it filed a
addresses of all recipients of assets, and
foundation’s tax year) will not be taken
consent under section 6501(c)(4) with its
4. An explanation of the nature and
into account as a significant disposition of
notification to the TE/GE Customer
fair market value of the assets distributed
assets. See Regulations section
Account Services at the Cincinnati
to each recipient.
1.170A-9(g)(2).
address given in General Instruction U of
its intention to begin a section
Additional requirements. For a
U. Filing Requirements
507(b)(1)(B) termination. The consent
complete corporate liquidation or trust
During Section
provides that the period of limitation on
termination, attach a statement as to
the assessment of excise tax under
whether a final distribution of assets was
507(b)(1)(B) Termination
section 4940 or 4948 based on
made and the date it was made (if
Although an organization terminating its
investment income for any tax year in the
applicable).
private foundation status under section
60-month period will not expire until at
Also, if the organization:
507(b)(1)(B) may be regarded as a public
least 1 year after the period for assessing
•
Has ceased to exist, check the “Final
charity for certain purposes, it is
a deficiency for the last tax year in which
Return” box in G at the top of page 1 of
considered a private foundation for filing
the 60-month period would normally
the return.
requirement purposes and it must file an
expire. Any foundation not paying the tax
•
Is terminating its private foundation
annual return on Form 990-PF. The return
when it files Form 990-PF must attach a
status under section 507(b)(1)(B), see
must be filed for each year in the
copy of the signed consent.
General Instructions U and V.
60-month termination period, if that period
If the foundation did not file the
•
has not expired before the due date of the
Is voluntarily terminating its private
consent, the tax must be paid in the
return.
foundation status under section 507(a)(1)
normal manner as explained in General
and owes a termination tax, send the
Instructions O and P. The organization
Regulations under section 507(b)(1)
notice (and tax payment, if applicable)
may file a claim for refund after
(B)(iii) specify that within 90 days after the
required by Rev. Rul. 2002-28, 2002-20
completing termination or during the
end of the termination period the
I.R.B. 941, and Rev. Rul. 2003-13,
termination period. The claim for refund
organization must supply information to
2003-4 I.R.B. 305, to the Manager,
must be filed on time and the organization
the IRS establishing that it has terminated
Exempt Organizations Determinations, at
must supply information establishing that
its private foundation status and,
the address given in General Instruction
it qualified as a public charity for the
therefore, qualifies as a public charity.
U.
period for which it paid the tax.
Send the information to:
Relief from public inspection
Internal Revenue Service
W. Rounding, Currency,
requirements. If the organization has
TE/GE Customer Account Services
terminated its private foundation status
and Attachments
P.O. Box 2508
under section 507(b)(1)(A), it does not
Cincinnati, OH 45201
Rounding off to whole-dollars. You
have to comply with the notice and public
may round off cents to whole dollars on
inspection requirements of their return for
If information is furnished establishing
your return and schedules. If you do
the termination year.
a successful termination, then, for the
round to whole dollars, you must round all
final year of the termination period, the
Filing date. See General Instruction J for
amounts. To round, drop amounts under
organization should comply with the filing
the filing date.
50 cents and increase amounts from 50
requirements for the type of public charity
to 99 cents to the next dollar. For
Definitions. The term substantial
it has become. See the Instructions for
example, $1.39 becomes $1 and $2.50
contraction includes any partial
Form 990 and Schedule A (Form 990 or
becomes $3.
liquidation or any other significant
990-EZ) for details on filing requirements.
disposition of assets. However, this does
This applies even if the IRS has not
If you have to add two or more
not include transfers for full and adequate
confirmed that the organization has
amounts to figure the amount to enter on
consideration or distributions of current
terminated its private foundation status by
a line, include cents when adding the
income.
the time the return for the final year of the
amounts and round off only the total.
-9-
Form 990-PF Instructions
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