Photographs of Missing Children

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

How To Get Forms and Publications

Personal Computer

You can access the IRS Web Site 24 hours a day, 7 days a week, at www.irs.gov to:

• Download forms, instructions, and publications.
• Order IRS products on-line.
• See answers to frequently asked tax questions.
• Search publications on-line by topic or keyword.
• Send us comments or request help via e-mail.
• Sign up to receive local and national tax news by e-mail.

You can also reach us using file transfer protocol at ftp.irs.gov.

CD-ROM

Order Pub. 1796, Federal Tax Products on CD-ROM, and get:

• Current year forms, instructions, and publications.
• Prior year forms, instructions, and publications.
• Frequently requested tax forms that may be filled in electronically, printed out for submission, and saved for recordkeeping.
• The Internal Revenue Bulletin.

Buy the CD-ROM on the Internet at www.irs.gov/cdorders from the National Technical Information Service (NTIS) for $22 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD-ROM for $22 (plus a $5 handling fee).

By Phone and In Person

You can order forms and publications 24 hours a day, 7 days a week, by calling 1-800-TAX-FORM (1-800-829-3676). You can also get most forms and publications at your local IRS office.

Phone Help

If you have questions and/or need help completing this form, please call 1-877-829-5500. This toll-free telephone service is available Monday through Friday from 8:00 a.m. to 6:30 p.m. Eastern time.

General Instructions

Purpose of Form

Use Form 4720 to figure and pay:

1. The initial taxes on private foundations, foundation managers, 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;
2. 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.);
3. The section 4912 tax on excess lobbying expenditures that result in loss of section 501(c)(3) tax-exempt status;
4. 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;
5. The section 4958 initial taxes on disqualified persons and organization managers of section 501(c)(3) (except private foundations) and section 501(c)(4) organizations that engage in excess benefit transactions; and
6. 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.

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, or 5b in Part VII-B of Form 990-PF; or Yes to question 1b, 1c, 3b, 4a, 4b, or 5b in Part VI-B 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.
  
• 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 A (Form 990 or 990-EZ), Part VI-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 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 (b) in Part X of Form 990, question 6b in Part VII-B of Form 990-PF, or question 6b in Part VI-B of Form 5227.
• Self-Dealers, Disqualified Persons, Foundation Managers, and Organization Managers. If you are a self-dealer, disqualified person, foundation manager, or organization manager and you have the same tax year as the foundation or organization, you may report any first tier tax you owe on the Form 4720 filed by the foundation or organization. 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.

Self-dealers, disqualified persons, foundation managers, and organization managers who owe tax under Chapter 41 or 42 and do not have the same tax year or do not sign the return of the foundation or organization must file a separate return on Form 4720 showing the tax owed and the name of the foundation or organization 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.

Where To File

To file Form 4720, mail or deliver it to:

Internal Revenue Service Center
Ogden, UT 84201-0027

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 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, or disqualified 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, 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, 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.

Name, Address, etc.

The name, address, and employer identification number of the private foundation or public charity 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, foundation manager, disqualified person, or organization 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.

Signature and Verification

If you are an organization manager, foundation manager, disqualified person, or self-dealer, 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 manager or self-dealer that is a partnership, Form 4720 is 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, or self-dealer. Include a copy of the power of attorney with the return.

Any person, firm, or corporation that prepared the return for a fee must also sign it and fill in the address of the preparer. If a firm or corporation prepares the return, it should be signed in the name of the firm or corporation.

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 employer identification number 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, they and 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, and disqualified 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, page 1. Managers, self-dealers, and disqualified 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 organization 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 to Schedule I on page 7 for information on excess benefit transactions.

Rounding Off to Whole Dollars

You may show the money items on the return and accompanying schedules as whole-dollar amounts. To do so, drop amounts less than 50 cents and increase any amounts from 50 to 99 cents to the next dollar.

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, 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 at the underpayment rate established under section 6621 is charged for any unpaid tax. 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, and 4958. 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 2002, 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 F describe acts or transactions subject to tax under Chapter 42. Also, refer to Pub. 578, Tax Information for Private Foundations and Foundation Managers, 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. Question A on page 1 and Schedules A, B, C, D, and E do not apply to public charities.

Before completing Schedule C, determine whether the foundation has excess holdings in any business enterprise. If the foundation 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 4a or b.

First | Next

Instructions Index | 2002 Tax Help Archives | Tax Help Archives | Home