Form 990-PF is the tax return private foundations must file each year with the IRS. All private foundations are required to file this form annually regardless of their activity, grants made, asset base, investment income, and amount of expenditures or receipts. The form is used to figure the tax based on investment income, compute required annual distributions, and report annual revenues and expenses. The form requires the disclosure of a substantial amount of background information including the fair market value of all assets, information on trustees and officers, and a complete list of grants awarded including dollar amounts.
Form 990-PF (PF stands for Private Foundation) is distinct from Form 990, which is the annual tax return most other tax-exempt organizations such as public charities must annually file. All Form 990-PFs filed in tax years beginning after July 1, 2019 must be filed electronically (filing by paper through postal mail is no longer allowed). Private foundations are required to provide a copy of their annual tax return (Form 990-PF) for the last three years and their exemption application (Form 1023 or 1024) to anyone who requests them. An organization can avoid having to provide copies if it posts these documents on a web page (maintained by itself or another entity where similar documents are posted) and it tells anyone requesting copies how to locate the documents.
Private foundations with a calendar year accounting period (almost all of them) must file Form 990-PF by May 15. Foundations can request a 6-month extension of time to file. The IRS requires no explanation for the 6-month extension and it is automatically granted. For calendar year foundations the 6-month extension pushes the due date to November 15. For non-calendar year foundations, Form 990-PF must be filed by the 15th day of the 5th month following the close of the organization’s accounting period. If a non-calendar year foundation files an extension the due date is pushed back by 6 months. When the due date falls on a Saturday, Sunday, or legal holiday, the due date is pushed back to the next succeeding day that is not a Saturday, Sunday, or legal holiday.
If a private foundation fails to file an annual tax return for 3 consecutive years, it will automatically lose its tax-exempt status. A private foundation that loses its exemption is still required to file income tax returns and pay any required federal taxes.
If a private foundation fails to file by the due date (including any extensions granted), it will have to pay a penalty for failure to file timely. The penalty is $20 for each day the return is late ($105 a day for large organizations), not to exceed the lesser of $10,500 ($54,500 for large organizations) or 5 percent of the private foundation’s gross receipts, unless it can show that the failure was due to reasonable cause. If the IRS makes a written demand for payment and the foundation does not pay then the person or persons responsible for the failure to pay can also be fined $10 a day up to $5,000. There are additional penalties and interest for not paying tax on time. The penalty is generally 1/2 of 1% of the unpaid tax for each month or part of a month the tax remains unpaid, not to exceed 25% of the unpaid tax.
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