Private Foundation: Voluntary Termination under Internal Revenue Code Section 507(a)


To voluntarily terminate under Internal Revenue Code section 507(a)(1), the organization must send a statement to the Manager, Exempt Organizations Determinations of its intent to terminate its status under section 507(a)(1). The statement must provide, in detail, the computation and amount of private foundation termination tax. Unless the organization requests abatement, it must pay the tax at the time the statement is filed. The organization may request abatement of all the termination tax, or it may pay part of the tax and request abatement of the unpaid part. However, if the organization's request for abatement is denied, the organization must pay the tax in full when notified by the Service that the tax will not be abated.

Termination of private foundation status under section 507(a)(1) will not relieve the foundation, or any disqualified person, of any liability for private foundation excise taxes.

If an organization that has terminated its private foundation status under section 507(a) continues to operate and wishes to be treated as a charitable, educational, religious, scientific, etc., organization, it must apply for appropriate exemption recognition.  See Status of organization after termination of private foundation status.

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