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 - 2004 Page 20
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30well as tax-exempt interest received
if the private foundation does not earmark
person will directly or indirectly pay these
directly.
the grant for any of the activities
premiums.
described in lines 5a(1) – (5), and there is
Report the premiums it paid and the
Part VII-B—Activities for
no oral or written agreement by which the
premiums paid by others, but treated as
grantor foundation may cause the grantee
Which Form 4720 May Be
paid by the private foundation, on Form
to engage in any such prohibited activity
8870 and pay the excise tax (which is
Required
or to select the grant recipient.
equal to premiums paid) on Form 4720.
The purpose of these questions is to
Grants made to exempt operating
For more information, see Form 8870
foundations (as defined in section
determine if there is any initial excise tax
and Notice 2000-24, 2000-17 I.R.B. 952
due under sections 170(f)(10),
4940(d)(2) and the instructions to Part VI)
(Notice 2000-24, 2000-1, C.B., 952.)
are not subject to the expenditure
4941 – 4945, and section 4955. If the
responsibility provisions of section 4945.
answer is “Yes” to question 1b, 1c, 2b,
Part VIII—Information
3b, 4a, 4b, 5b, or 6b, complete and file
Under section 4955, a section
About Officers, Directors,
Form 4720, unless an exception applies.
501(c)(3) organization must pay an excise
Line 1 — Self-dealing. The activities
tax for any amount paid or incurred on
Trustees, Foundation
listed in 1a(1) – (6) are considered
behalf of or opposing any candidate for
Managers, Highly Paid
self-dealing under section 4941 unless
public office. The organization must pay
one of the exceptions applies. See Pub.
an additional excise tax if it does not
Employees, and
578.
correct the expenditure timely.
Contractors
The terms “disqualified person” and
A manager of a section 501(c)(3)
“foundation manager” are defined in
organization who knowingly agrees to a
Line 1 — List of officers, directors,
General Instruction C.
political expenditure must pay an excise
trustees, etc. List the names, addresses,
Line 1b. If you answered “Yes” to any of
tax unless the agreement is not willful and
and other information requested for those
the questions in 1a, you should answer
there is reasonable cause. A manager
who were officers, directors, and trustees
“Yes” to 1b unless all of the acts engaged
who does not agree to a correction of the
(or any person who had responsibilities or
in were “excepted” acts. Excepted acts
political expenditure may have to pay an
powers similar to those of officers,
are described in Regulations sections
additional excise tax.
directors, or trustees) of the foundation at
53.4941(d)-3 and 4 or appear in Notices
any time during the year. Each must be
A section 501(c)(3) organization will
published in the Internal Revenue
listed whether or not they receive any
lose its exempt status if it engages in
Bulletin, relating to disaster assistance.
compensation from the foundation. Give
political activity.
Line 2b — Taxes on failure to distribute
the preferred address at which officers,
A political expenditure that is treated
income. If you answer “No” to question
etc., want the Internal Revenue Service to
as an expenditure under section 4955 is
2b, attach a statement explaining:
contact them.
•
not treated as a taxable expenditure
All the facts regarding the incorrect
Also include on this list, any officers or
under section 4945.
valuation of assets, and
•
directors (or any person who had
The actions taken (or planned) to
For purposes of the section 4955 tax,
responsibilities or powers similar to those
comply with section 4942(a)(2)(B), (C),
when an organization promotes a
of officers or directors) of a disregarded
and (D) and the related regulations.
candidate for public office (or is used or
entity owned by the foundation who are
controlled by a candidate or prospective
Line 3a. A private foundation is not
not officers, directors, etc., of the
candidate), amounts paid or incurred for
treated as having excess business
foundation.
the following purposes are political
holdings in any enterprise if, together with
If the foundation (or disregarded entity)
expenditures:
related foundations, it owns 2% or less of
•
pays any other person, such as a
Remuneration to the individual (or
the voting stock and 2% or less in value
management services company, for the
candidate or prospective candidate) for
of all outstanding shares of all classes of
services provided by any of the
speeches or other services,
stock. (See “disqualified person” under
•
foundation’s officers, directors, or trustees
Travel expenses of the individual,
General Instruction C.) A similar
•
(or any person who had responsibilities or
Expenses of conducting polls, surveys,
exception applies to a beneficial or profits
powers similar to those of officers,
or other studies, or preparing papers or
interest in any business enterprise that is
directors, or trustees), report the
other material for use by the individual,
a trust or partnership.
•
compensation and other items on Part
Expenses of advertising, publicity, and
For more information about excess
VIII as if you had paid the officers, etc.,
fundraising for such individual, and
business holdings, see Pub. 578 and the
•
directly.
Any other expense that has the primary
instructions for Form 4720.
effect of promoting public recognition or
Show all forms of compensation
Line 4 — Taxes on investments that
otherwise primarily accruing to the benefit
earned by each listed officer, etc. In
jeopardize charitable purposes. In
of the individual.
addition to completing Part VIII, if you
general, an investment that jeopardizes
want to explain the compensation of one
See the regulations under section
any of the charitable purposes of a private
or more officers, directors, and trustees,
4945 for more information.
foundation is one for which a foundation
you may provide an attachment
manager did not exercise ordinary
Line 5b. If you answered “Yes” to any of
describing the person’s entire 2004
business care to provide for the long- and
the questions in 5a, you should answer
compensation package.
short-term financial needs of the
“Yes” to 5b unless all of the transactions
foundation in carrying out its charitable
engaged in were “excepted” transactions.
Enter zero in columns (c), (d), and (e)
purposes. For more details, see Pub. 578
Excepted transactions are described in
if no compensation was paid. Attach a
and the regulations under section 4944.
Regulations section 53.4945 or appear in
schedule if more space is needed.
Notices published in the Internal Revenue
Line 5 — Taxes on taxable
Column (b). A numerical estimate of
Bulletin, relating to disaster assistance.
expenditures and political
the average hours per week devoted to
expenditures. In general, payments
Line 6b. Check “Yes” if, in connection
the position is required for the answer to
made for the activities described on lines
with any transfer of funds to a private
be considered complete.
5a(1) – (5) are taxable expenditures. See
foundation, the foundation directly or
Pub. 578 for exceptions.
Phrases such as “as needed” or
indirectly pays premiums on any personal
!
“as required” are unacceptable
A grant by a private foundation to a
benefit contract, or there is an
entries for column (b).
CAUTION
public charity is not a taxable expenditure
understanding or expectation that any
-20-
Form 990-PF Instructions
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