Form 990-PF: Meeting IRS Demands for Fiscal, Grant, and Other Data From Private Foundations

Tax professionals advising private foundations and non-exempt charitable trusts treated as private foundations must have current and comprehensive knowledge of the many tax rules unique to these types of exempt organizations.

The information return Form 990-PF requires extensive disclosure of donations, receipts, and expenses. It outlines several potential taxable situations, including prohibitions on self-dealing, taxes on undistributed income, and excess business holdings. These issues carry significant tax consequences to the foundation and potentially its insiders.

IRS rules require that private foundations make qualifying distributions of at least five percent of the fair market value of non-charitable assets and impose a steep excise tax on undistributed income. Knowing how to calculate the minimum distribution requirement is crucial in advising private foundation clients.

The private foundation rules also impose taxes on net investment income, taxable expenditures that do not meet the foundation's exempt purposes, and self-dealing transactions. Tax advisers must avoid transactions and events resulting in foundation-level taxes and understand how to report and remedy those transactions that may jeopardize the foundation's exempt status.

Listen as our authoritative panel of advisers reviews the material requirements under Form 990-PF and its instructions and better prepares you for future compliance.

1. Form 990-PF
2. Critical compliance challenges faced with Form 990-PF
   1. Calculation of net investment income
   2. Calculation of qualifying distributions
   3. Calculation of minimum distribution requirement
   4. Disclosing program activities (direct charitable activities, program-related investments, and grants)
3. Operating foundations
4. Best practices to avoid Chapter 42 penalty taxes
   1. Self-dealing
   2. Undistributed income
   3. Excess business holdings
   4. Jeopardizing investments
   5. Taxable expenditures
5. Current developments - The ACE Act and DAFs

The panel will provide insights and guidance on these and other critical aspects of Form 990-PF:

• What distributions are considered qualified distributions for the five percent test?
• When is a private foundation required to remit estimated tax payments?
• How is undistributed income tracked, and when should it be distributed?
• How is Section 4940 net investment income tax calculated and reported for a private foundation?

Learning Objectives

After completing this course, you will be able to:

• Determine what distributions are qualified distributions
• Differentiate between operating and non-operating foundations
• Verify that transactions do not take place with disqualified persons
• Ascertain that information required on Form 990-PF is correctly reported
• Recognize when a private foundation has excess business holdings
• Establish that the minimum distribution requirements are met

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ non-profit business or public firm experience at mid-level within the organization, preparing financial statements and/or complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of private foundation structure and operating rules; familiarity with regulations prohibiting self-dealing and rules governing grants and disbursements from tax-exempt private foundations.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).