Instructions for Form 4720 |
2003 Tax Year |
General Instructions
This is archived information that pertains only to the 2003 Tax Year. If you are looking for information for the current tax year, go to the Tax Prep Help Area.
Use Form 4720 to figure and pay:
- 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;
- 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)
and
section 501(c)(4) organizations that engage in excess benefit transactions; and
- 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.
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.
To file Form 4720, mail or deliver it to:
Internal Revenue Service Center
Ogden, UT 84201-0027
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.
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.
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:
- 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 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.
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.
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 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, 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.
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.
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 2003, 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 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.
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