General Instructions

Purpose of Form

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 distribution 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.

Who Must File

Private foundations and section 4947(a) trusts.   Generally, Form 4720 must be filed by all organizations, including foreign organizations, that answered “Yes,” to question 1b, 1c, 2b, 3b, 4a, 4b, 5b, 6b, or 7b in Part VII-B of Form 990-PF; or “Yes,” to question 75b, 75c, 77b, 78a, 78b, 79b, or 80b in Part VI-B, and item G on page 1, of Form 5227. A trust described in section 4947(a)(2) is considered a private foundation insofar as it is subject to Chapter 42 provisions.

Other organizations owing initial taxes on excess business holdings.

Supporting organizations described in section 4943(f)(3) and donor advised funds described in section 4966(d)(2) that owe the tax reported on Schedule C (section 4943(a)).

Public charities making excess lobbying expenditures.   Public charities that made the election under section 501(h) and owe tax on excess lobbying expenditures as figured on Schedule C (Form 990 or 990-EZ), Part II-A, must file Form 4720 to report the liability and pay the tax (Schedule G).

  Certain organizations (and possibly their managers) whose section 501(c)(3) status is revoked because of excess lobbying activities are subject to a 5% excise tax on their lobbying expenditures.

Organizations making political expenditures.   All section 501(c)(3) organizations that make a political expenditure must file Form 4720 to report the liability and pay the tax. Organization managers may report any first tier tax they owe on Schedule F of Form 4720. (See Schedule F instructions, later, for the definition of political expenditures.)

Charitable organizations that make certain premium payments on personal benefit contracts.   Form 4720 must be filed by any organization described in section 170(c) or section 664(d) that answered “Yes,” to question 7f in Part V of Form 990, question 6b in Part VII-B of Form 990-PF, question 80b in Part VI-B of Form 5227, or that otherwise paid premiums on a personal benefit contract in connection with a transfer to an organization for which a charitable deduction was not allowed to the transferor (Part I, line 8).

Sponsoring organizations maintaining donor advised funds.   All section 170(c) organizations (excluding private foundations and government organizations referred to in sections 170(c)(1) and 170(c)(2)(A)) that maintain one or more donor advised funds must file Form 4720 to report the liability and pay the tax owed on any taxable distributions under section 4966 (Schedule K).

Certain tax-exempt entities that are a party to a prohibited tax shelter transaction (PTST).   Certain tax-exempt entities must file Form 4720 to report the liability and pay the tax due under section 4965(a)(1) (Schedule J). This requirement applies to entities described in sections 501(c), 501(d), or 170(c) (other than the United States) or an Indian tribal government (within the meaning of section 7701(a)(40)).

  
Any entity described in section 4965(c) that is a party to a PTST must file Form 8886-T.

Managers, self-dealers, disqualified persons, donors, donor advisors, and related persons.   If you are a manager, self-dealer, disqualified person, donor, donor advisor, or related person who owes tax under Chapter 41 or 42, including entity managers under section 4965, and you have the same tax year (or accounting year, as applicable) of the entity, you may report the tax you owe on the Form 4720 filed by the entity. Managers, self-dealers, and disqualified persons who do this are responsible for the parts that relate to taxes they owe and should include their own check or money order, payable to the United States Treasury, with the return.

  Managers, self-dealers, disqualified persons, donors, donor advisors, and related persons who owe tax under Chapter 41 or 42, including entity managers under section 4965, and do not have the same tax year (or accounting year, as applicable) or do not sign the return of the entity, must file a separate return on Form 4720 showing the tax owed and the name of the entity for which you owe tax. If you file a separate Form 4720, enter your tax year at the top of the form. Enter your name, address, and taxpayer identification number in Part II-A. Complete all the information the form requires, to the extent possible, that applies to your liability.

Managers of tax favored retirement plans, individual retirement arrangements, and savings arrangements described in sections 401(a), 403(a), 403(b), 529, 457(b), 408(a), 220(d), 408(b), 530, or 223(d) must report and pay tax due under section 4965(a)(2) on Form 5330.

Charitable remainder trusts.   All charitable remainder trusts described in section 664 that have unrelated business taxable income for the tax year must file Form 4720 to report the liability and pay the tax due (Part I, line 11). Unrelated business taxable income is figured under section 512 and is determined as if Part III of subchapter F applies to such trusts.

Hospital organizations failing to meet the community health needs assessment requirements (Sections 501(r)(3), 4959).   An excise tax is imposed on the failure by a hospital organization to meet the community health needs assessment (“CHNA”) requirements of section 501(r)(3) (Schedule M).

Where To File

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

Private delivery services.   You can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. These private delivery services include only the following.
  • DHL Express (DHL): DHL Same Day Service.

  • Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, FedEx International First.

  • United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air AM, UPS Worldwide Express Plus, and UPS Worldwide Express.

  The private delivery service can tell you how to get written proof of the mailing date.

  Private delivery services cannot deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address. Private delivery services deliver to:

Internal Revenue Submission Processing Center  
1973 Rulon White Blvd. 
Ogden, UT 84404  

When To File

Part I taxes.   File Form 4720 by the due date (not including extensions) for filing the organization's Form 990-PF, Form 990, Form 990-EZ, or Form 5227. If you are not required to file any of these forms, file Form 4720 by the 15th day of the 5th month after the organization's accounting period ends.

  If the regular due date falls on a Saturday, Sunday, or legal holiday, file by the next business day.

Affiliated group member.

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.

Part II taxes.   If you are a manager, self-dealer, disqualified person, donor, donor advisor, or related person, owing taxes under Chapter 41 or 42 and filing a separate Form 4720, and your tax year ends on the same date as the organization's tax year, you must file by the due date for filing Form 990-PF, Form 5227, Form 990, or Form 990-EZ of the organization for which you owe tax. If your tax year ends on a date different from that of the organization, or your organization is not required to file a Form 990, Form 990-EZ, Form 990-PF, or Form 5227, you must file a Form 4720 by the 15th day of the 5th month after your tax year ends.

  If the regular due date falls on a Saturday, Sunday, or legal holiday, file by the next business day.

Extension

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.

Name, Address, etc.

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.

Signature and Verification

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:

  1. On behalf of the foundation or organization, and

  2. 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.

Attachments

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.

Organizations Organized or Created in a Foreign Country or U.S. Possession

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.

Sections 4941 through 4945 and section 4955 do not apply to foreign private foundations that receive substantially all of their support (other than gross investment income) from sources outside the United States. These organizations must complete this form and file it in the same manner as other private foundations. However, these organizations, as well as foundation managers and self-dealers, do not have to pay any tax that would otherwise be due on this return.

Tax Payments

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.

Rounding Off to Whole Dollars

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.

Penalties and Interest

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.

Abatement

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.

Initial Tax Liability

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 2013, 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.

Completing the Schedules

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.

Amended Return

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.

Note.

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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