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 6
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30tax return under section 6011 for the tax
Enter the tax you figured on line 10a of
Depositing on time. For deposits made
on investment income imposed by section
Form 990-W.
by EFTPS to be on time, the foundation
4940 (or 4948 if an exempt foreign
must initiate the transaction at least 1
The Form 990-W line items and
organization), the penalties imposed by
business day before the date the deposit
instructions for large organizations also
section 6651 for not filing a return (without
is due.
apply to private foundations. For
reasonable cause) also apply.
purposes of paying the estimated tax on
Deposits With Form 8109
net investment income, a “large
There are also criminal penalties for
If the foundation does not use EFTPS,
organization” is one that had net
willful failure to file and for filing fraudulent
deposit estimated tax payments and any
investment income of $1 million or more
returns and statements. See sections
balance due for the excise tax based on
for any of the 3 tax years immediately
7203, 7206, and 7207.
investment income with Form 8109,
preceding the tax year involved.
Federal Tax Deposit Coupon. If you do
N. Penalties for Not Paying
Penalty. A foundation that does not pay
not have a preprinted Form 8109, use
the proper estimated tax when due may
Tax on Time
Form 8109-B to make deposits. You can
be subject to the estimated tax penalty for
get this form only by calling
There is a penalty for not paying tax when
the period of the underpayment. (See
1-800-829-4933. Be sure to have your
due (section 6651). The penalty generally
sections 6655(b) and (d) and the Form
employer identification number (EIN)
is
1
/
of 1% of the unpaid tax for each
2220 instructions.)
2
ready when you call.
month or part of a month the tax remains
Special Rules
unpaid, not to exceed 25% of the unpaid
Do not send deposits directly to an IRS
tax. If there was reasonable cause for not
office; otherwise, the foundation may
Section 4947(a)(1) nonexempt
paying the tax on time, the penalty can be
have to pay a penalty. Mail or deliver the
charitable trusts. Form 1041-ES should
waived. However, interest is charged on
completed Form 8109 with the payment
be used to pay any estimated tax on
any tax not paid on time, at the rate
to an authorized depositary, i.e., a
income subject to tax under section 1.
provided by section 6621.
commercial bank or other financial
Form 1041-ES also contains the
institution authorized to accept federal tax
Estimated tax penalty. The section
estimated tax rules for paying the tax on
deposits.
6655 penalty for failure to pay estimated
that income.
tax applies to the tax on net investment
Taxable private foundations. Form
Make checks or money orders payable
income of domestic private foundations
to the depositary. To help ensure proper
1120-W should be used to figure any
and section 4947(a)(1) nonexempt
crediting, write the foundation’s EIN, the
estimated tax on income subject to tax
charitable trusts. The penalty also applies
tax period to which the deposit applies,
under section 11. Form 1120-W contains
to any tax on unrelated business income
and “Form 990-PF” on the check or
the estimated tax rules for paying the tax
of a private foundation. Generally, if a
money order. Be sure to darken the
on that income.
private foundation’s tax liability is $500 or
990-PF box on the coupon. Records of
more and it did not make the required
P. Tax Payment Methods
these deposits will be sent to the IRS.
payments on time, then it is subject to the
for Domestic Private
penalty.
For more information on deposits, see
the instructions in the coupon booklet
For more details, see the discussion
Foundations
(Form 8109) and Pub. 583, Starting a
of Form 2220 in General Instruction D.
Business and Keeping Records.
Whether the foundation uses the
depository method of tax payment or the
O. Figuring and Paying
Special Payment Option for
special option for small foundations, it
Small Foundations
Estimated Tax
must pay the tax due (see Part VI) in full
by the 15th day of the 5th month after the
A private foundation may enclose a check
A domestic exempt private foundation, a
end of its tax year.
or money order, payable to the United
domestic taxable private foundation, or a
States Treasury, with the Form 990-PF or
nonexempt charitable trust treated as a
Depository Method of Tax
Form 8868, if it meets all of the following
private foundation must make estimated
Payment
requirements:
tax payments for the excise tax based on
Some foundations (described below) are
investment income if it can expect its
1. The foundation must not be
required to electronically deposit all
estimated tax (section 4940 tax minus
required to use EFTPS,
depository taxes, including their tax
allowable credits) to be $500 or more.
2. The tax based on investment
payments for the excise tax based on
The number of installment payments it
income shown on line 5, Part VI of Form
investment income.
must make under the depository method
990-PF is less than $500, and
is determined at the time during the year
Electronic Deposit Requirement
3. If Form 8868 is used, the amount
that it first meets this requirement. For
entered on line 3a of Part I or line 8a of
The foundation must make electronic
calendar-year taxpayers, the first deposit
Part II of Form 8868 must be less than
deposits of all depository taxes (such as
of estimated taxes for a year generally
$500 and it must be the full balance due.
employment tax or the excise tax based
should be made by May 15 of the year.
on investment income) using the
Be sure to write “2004 Form 990-PF”
Although Form 990-W is used primarily
Electronic Federal Tax Payment System
to compute the installment payments of
and the foundation’s name, address, and
(EFTPS) in 2005 if:
•
EIN on its check or money order.
unrelated business income tax, it is also
The total deposits of such taxes in
used to determine the timing and
2003 were more than $200,000, or
•
Foreign organizations should see
amounts of installment payments of the
The foundation was required to use
!
the instructions for Part VI, line 9.
section 4940 tax based on investment
EFTPS in 2004.
income. Compute separately any required
CAUTION
If the foundation is required to use
deposits of excise tax based on
EFTPS and fails to do so, it may be
investment income and unrelated
Q. Public Inspection
subject to a 10% penalty. If the foundation
business income tax.
is not required to use EFTPS, it may
Requirements
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
A private foundation must make its annual
apply the rules of Part VI to your tax year
1-800-555-4477 or 1-800-945-8400. To
returns and exemption application
2005 estimated amounts for that part.
enroll online, visit
available for public inspection.
-6-
Form 990-PF Instructions
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