Table of Contents
- Purpose of Form
- Who Must File
- Where To File
- When To File
- Name, Address, etc.
- Signature and Verification
- Organizations Organized or Created in a Foreign Country
- Tax Payments
- Rounding Off to Whole Dollars
- Penalties and Interest
- Initial Tax Liability
- Completing the Schedules
- Amended Return
Use Form 4720 to figure and pay:
The initial taxes on private foundations and self-dealers, under sections 4941 through 4945 for self-dealing, failure to distribute income, excess business holdings, investments that jeopardize charitable purpose, and taxable expenditures;
The initial tax on certain supporting organizations and donor advised funds for excess business holdings under section 4943;
The section 4911 tax on excess lobbying expenditures by public charities that have elected to be subject to section 501(h) regarding expenditures to influence legislation. (Private foundations and section 4947(a) trusts are not eligible to make this election);
The section 4912 tax on excess lobbying expenditures that result in loss of section 501(c)(3) tax-exempt status;
The section 4955 tax imposed on any amount paid or incurred by a section 501(c)(3) organization that participates or intervenes in any political campaign on behalf of, or in opposition to, any candidate for public office;
The section 4958 initial taxes on disqualified persons and organization managers of section 501(c)(3) (except private foundations), section 501(c)(4), and section 501(c)(29) organizations that engage in excess benefit transactions;
The section 4959 tax on the failure by a hospital organization to meet the community health needs assessment requirements;
The section 4965 taxes related to prohibited tax shelter transactions;
The section 4966 taxes on taxable distributions by sponsoring organizations maintaining donor advised funds;
The section 4967 taxes on distributions of prohibited benefits from donor advised funds;
The section 170(f)(10) tax on any premiums paid on a personal benefit contract in connection with a transfer to an organization or charitable remainder trust for which a charitable deduction is not allowed to the transferor; and
The section 664(c)(2) tax on the unrelated business taxable income of a charitable remainder trust.
|If you are located in||Then use the following address|
The United States
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027
A foreign country or
a U.S. possession
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
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Internal Revenue Submission Processing Center
1973 North Rulon White Blvd.
Ogden, UT 84404
For members of an affiliated group of organizations that have different tax years, and who are filing Form 4720 to report tax under section 4911, the tax year of the affiliated group is the calendar year, unless all members of the group elect under Regulations section 56.4911-7(e)(5) to make a member's year the group's tax year.
If you cannot file Form 4720 by the due date, you may request an automatic 3-month extension of time to file by using Form 8868, Application for Extension of Time To File an Exempt Organization Return. The automatic 3-month extension will be granted if you properly complete this form, file it, and pay any balance due by the due date for Form 4720.
Form 8868 is also used to request an additional extension of time to file; however, these extensions are not automatically granted.
It is possible for more than one person to file Form 4720 and have a balance due or refund of taxes pertaining to one or more transactions involving the same exempt organization. For example, an exempt organization, a manager, and a disqualified person may each be required to file a Form 4720 in one year, and each have a balance due of taxes. When this occurs, and extensions of time are needed to file a return (by filing Form 8868), each person should file his, her, or its own extension, indicating the share of the balance due or refund for each. This will avoid potential problems later on with the IRS in processing of the extensions, since we will know which persons paid their share of the tax balance due.
The name, address, and employer identification number of the organization or entity should be the same as shown on Form 990-PF, Form 5227, Form 990, Form 990-EZ, and Schedule A (Form 990 or 990-EZ). If you are a self-dealer, donor, donor advisor, related person, disqualified person, or manager filing a separate Form 4720, enter your name, address, and taxpayer identification number in Part II-A.
Include the suite, room, or other unit number after the street address.
If the Post Office does not deliver mail to the street address, show the P.O. box number instead of the street address.
If you want a third party (such as an accountant or an attorney) to receive mail for the foundation or charity, enter on the street address line “C/O” followed by the third party's name and street address or P.O. box.
If you are a manager, self-dealer, disqualified person, donor, donor advisor, or related person, you should sign only in the spaces that apply, whether you use the return of the foundation or organization as your return, or file separately.
If you are signing on behalf of the foundation or organization and also because of personal tax liability, you must sign twice. You sign:
On behalf of the foundation or organization, and
For your own personal tax liability.
For a corporation (or an association), the form may be signed by one of the following: president, vice president, treasurer, assistant treasurer, chief accounting officer, or other corporate officer (such as tax officer).
For a partnership, the form may be signed by a partner or partners authorized to sign the partnership return.
If the return is filed on behalf of a trust, the authorized trustee(s) must sign it.
A receiver, trustee, or assignee required to file any return on behalf of an individual, a trust, estate, partnership, association, company, or corporation must sign the Form 4720 filed for these taxpayers.
Also, a person with a valid power of attorney may sign for the organization, foundation, manager, self-dealer, donor, donor advisor, or related person. Include a copy of the power of attorney with the return.
If you need more space, attach separate sheets showing the same information in the same order as on the printed form. Show the totals on the printed form.
Enter the organization's name and EIN on each sheet. Use sheets that are the same size as the form and indicate clearly the line of the printed form to which the information relates.
Report all amounts in U.S. currency (state conversion rate used) and give information in English. Report items in total, including amounts and transactions from both inside and outside the United States.
Chapter 42 taxes (including sections 4941 through 4945, 4955, 4958, 4959, and 4965 through 4967) do not apply to foreign organizations that receive substantially all of their support (other than gross investment income) from sources outside the United States. See section 4948(b). These organizations must complete this form and file it in the same manner as domestic organizations. However, these organizations, as well as their foundation managers and self-dealers, do not have to pay any tax that would otherwise be due on this return.
For these purposes, a foreign organization is an organization not created or organized in or under the law of the United States, a U.S. state or possession, or the District of Columbia. Gifts, grants, contributions, or membership fees directly or indirectly from a United States person (as defined in section 7701(a)(30)) are from sources within the United States. See Regulations section 53.4948-1.
Although a foreign organization described in section 4948(b) is not subject to Chapter 42 taxes, it shall not be exempt from tax under section 501(a) if it engages in a prohibited transaction. See section 4948(c). A prohibited transaction is a transaction that would subject the organization or its disqualified person to a penalty under section 6684 if the foreign organization were a domestic organization. Unless the transaction constitutes a willful and flagrant violation of a Chapter 42 provision, a transaction violating a Chapter 42 provision will not constitute a prohibited transaction except under the following circumstances:
There was a prior Chapter 42 violation that resulted in a warning from the IRS that a second violation would result in a prohibited transaction.
The IRS provides notice that the second transaction will constitute a prohibited transaction unless it is corrected within 90 days of the notice.
The second transaction is not timely corrected.
Managers, self-dealers, disqualified persons, donors, donor advisors, and related persons, paying tax on the organization's Form 4720 must pay with the return the tax that applies to them as shown in Part II-A. Managers, self-dealers, disqualified persons, donors, donor advisors, and related persons, who file separate Forms 4720 must pay the applicable tax with their separate returns. When managers do not sign the organization's Form 4720 to report their own tax liability, the amount of tax they owe should not be entered in Part II-B, line 1.
Payment by a private foundation of any taxes owed by the foundation managers or self-dealers will result in additional taxes under the self-dealing and taxable expenditure provisions. Managers and self-dealers should pay taxes imposed on them with their own check or money order.
Disqualified persons and entity managers should pay taxes on excess benefit transactions that are imposed on them with their own check or money order. Any reimbursement of a disqualified person's tax liability from excess benefit transactions by the organization will be treated as an excess benefit transaction subject to the tax unless the organization included the reimbursement in the disqualified person's compensation and the disqualified person's total compensation was reasonable. See the instructions for Schedule I, later, for information on excess benefit transactions.
You may round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.
If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.
There are penalties for failure to file or to pay tax. There are also penalties for willful failure to file, supply information or pay tax, and for filing fraudulent returns and statements, that apply to public charities, private foundations, managers, donors, donor advisors, related persons, and self-dealers who are required to file this return. See sections 6651, 7203, 7206, and 7207. Also, see section 6684 for penalties that relate to tax liability under Chapter 42.
Interest charges for any unpaid tax is charged at the underpayment rate established under section 6621. The interest on underpayments is in addition to any penalties.
See section 4962 for rules on abatement, refund, or relief from payment of first tier taxes under sections 4942 through 4945, 4955, 4958, 4966, and 4967. To request abatement, refund, or relief under section 4962, write “Request for Abatement Under Section 4962” in the top margin of Form 4720, page 1.
If you pay an initial tax on self-dealing or on investments that jeopardize charitable purpose (figured on Schedules A and D of Form 4720, respectively) for tax year 2014, the payment may not satisfy the entire tax liability for an act of self-dealing or a jeopardy investment. (For the definition of self-dealing, see the instructions for Schedule A of this form; for the definition of jeopardy investment, see the instructions for Schedule D of this form.) Paying the tax and filing a Form 4720 are required for each year or part of a year in the taxable period that applies to the act or investment. Generally, the taxable period begins with the date of the act or investment and ends with the date corrective action is completed, a notice of deficiency is mailed, or the tax is assessed, whichever comes first.
Similar rules apply for the initial tax liability resulting from failing to distribute income (Schedule B) and from acquiring excess business holdings (Schedule C). Thus, the initial tax liability for those taxes continues to accrue until the date a notice of deficiency is mailed, the violation is corrected, or the tax is assessed, whichever comes first.
Before completing any of the schedules in this return, read the applicable instructions. If any completed schedule shows taxes owed, enter them on page 1 of this return.
The instructions for Schedules A through M describe acts or transactions subject to tax under Chapter 42. Also, go to www.irs.gov/charities/foundations/index.html and then click on “Private Foundations” or “Private Foundations Manual” for a list of exceptions that eliminate any tax liability that would otherwise be shown on Schedules A and E. Do not complete Schedules A and E if exceptions apply to all the acts or transactions. In general, question A on page 1 and Schedules A, B, C, D, and E do not apply to public charities. However, Schedule C does apply to some public charities including donor advised funds and certain supporting organizations that are treated as private foundations for purposes of section 4943. See the instructions for Schedule C for a description of the public charities to which section 4943 applies.
Before completing Schedule C, determine whether the organization or donor advised fund has excess holdings in any business enterprise. If the organization or donor advised fund has holdings subject to the tax on excess business holdings, complete Schedule C for each enterprise.
Before completing Schedule D, determine whether the investment was program related. If not, complete Schedule D for each investment for which you answered “Yes,” to Form 990-PF, Part VII-B, question 4a or b, or Form 5227, Part VI-B, question 78a or b.
To correct a previously filed Form 4720 (including the reporting of additional excise taxes discovered after the original Form 4720 filing), use the same year form as the form you are correcting, and:
Write “Amended Return,” at the top of page 1.
Complete the entire return (not just the part that changed) following the form and instructions for the amended year.
Include a statement that identifies the lines and amounts being changed and the reason for each change.
Write the entity's name and EIN at the top of each page of the statement.
If the amended return is claiming a refund or requesting an abatement, write “Claim for Refund” or “Request for Abatement,” whichever is applicable, near the top of the statement discussed above.
If you are claiming a refund or requesting an abatement, you may use Form 843, Claim for Refund and Request for Abatement, instead of Form 4720.
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