Private Foundation Tax Services

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Every year, private foundations are required to file an income tax return using IRS Form 990-PF. The private foundation tax return is uncommon and represents a minefield for tax preparers who are unaccustomed to working with foundations. In our extensive experience reviewing private foundation tax returns prepared by other accountants we have found a very high incidence of errors; even prestigious and reputable CPA firms frequently make serious mistakes.

These errors can lead to increased scrutiny, potential penalties, and even full-blown audits. To ensure compliance and optimize potential benefits, private foundations should partner with a seasoned tax advisor well-versed in the specialized regulations and tax laws pertaining to private foundations. As specialists in private foundations, we can expertly prepare your foundation’s tax return and guide you through other compliance and operational challenges.

We can assist you with the following private foundation tax services: 

• Preparation and filing of private foundation tax returns
• Assistance complying with private foundation state reporting and registration requirements
• Calculation of your private foundation’s required minimum distribution
• Preparation of mandatory private foundation balance sheet and income statements
• Verification of the public charity status of grantees
 • Computation of quarterly estimated taxes for private foundation investment income excise tax
• Assistance with private foundation donation acknowledgment letters
• Guidance with private foundation payroll and independent contractor compliance
Assistance with private foundation substantial contributor tracking
• Representation of private foundations in IRS audits or litigation 
• Help with private foundation compliance obligations such as self-dealing, excess business holdings, and jeopardizing investments

We proudly serve:

-- Private Foundations
-- Family Foundations
-- Charitable Foundations 
-- Grant-making Foundations
-- Operating Foundations

-- Non-Operating Foundations
-- Independent Foundations
-- Corporate Foundations
-- Startup Foundation

Benefits of Partnering with CPA KPA for Private Foundation Tax Services

Our mission is to amplify the positive impact of private foundations. Partnering with us provides a number of advantages to your private foundation that go well beyond tax compliance:

Collaborative partnership-
We hope to build a relationship with you and be a true partner for your foundation. We are eager to work as your collaborator, not just as an accountant that you talk to once a year at tax time. The greatest success we can experience is helping your foundation succeed, grow, and carry out its charitable mission.
Coach in your corner-
Private foundations must operate within a set of rules and regulations that are rather complicated and wide-ranging. Gaining a clear understanding of what’s required takes time and effort; no one is born knowing this stuff! We provide year-round coaching and consultations and teach you the do’s and don’ts of the regulations. We help you simplify compliance issues, reduce errors, and avoid regulatory pitfalls.
Operational development-
We provide consultations and advice that go well beyond private foundation tax preparation—we help you efficiently run your foundation. We see private foundations from the inside and we are very knowledgeable about the unique challenges that private foundations face. We also help monitor your operations to assure you do not run afoul of complex IRS rules and regulations. If we identify a point of issue, we notify you and help you resolve it.
Fair and simple service model-
We do not nickel and dime you when you contact us with questions. We avoid working on a strict billable hours model because we believe it restricts communication. We provide our private foundation tax service package to all our clients for a flat annual investment.  We want you to call us when you have questions without worrying it will cost you extra!
Private foundations are our focus-
Don’t be a large firm’s afterthought. Larger firms generally don’t take the time to help their foundation clients with what they really need; some even regard foundations as a distraction. If your client relationship has repeatedly been passed around to different advisors it is a red flag and shows you are not a priority. We are passionate about serving private foundations and we do it well. This work is not just a job for us but rather a vocation.
Emphasis on privacy-
We are diligent about keeping your information private and safe. We prepare our private foundation clients’ tax returns to limit personal information. The private foundation tax return Form 990-PF is considered a public document and is available online from a variety of open sources as well as subscription sources. With just a small amount of initiative, any member of the public can easily find your foundation’s Form 990-PF. We protect your personal privacy by limiting personal information on Form 990-PF such as home addresses, phone numbers and email addresses
Eye on tax benefits-
As private foundation specialists we are very cognizant of certain private foundation tax benefits. Please click through this link for private foundation tax benefits to see our write-up of the topic. As we serve your foundation, we make sure to advise you on how to maximize any tax benefits that you or your family may be entitled to. Furthermore, although the private foundation investment income excise tax rate is only 1.39%, we still work to minimize your foundation’s tax burden by properly classifying private foundation tax deductions and expenses. 

What to Expect When Partnering with CPA KPA

Expect quality service and advice-
Our number one service is to ensure your foundation’s tax requirements and other compliance matters are taken care of correctly and efficiently. Aside from this fundamental service, we help our clients refine their goals and strategies and talk through new ideas. We focus on you, actively listen, and try to be proactively helpful. We know and understand private foundations and we are gratified to help our clients. 
Expect a close relationship-
Our ambition is to be your CPA partner that helps you with more than just accounting and tax compliance; we want to build a genuinely strong connection. We understand this kind of relationship must be earned and we will take the time to understand your foundation and earn your trust.
Expect regular contact-
We strive to exceed your expectations with highly responsive service and regular and candid communication throughout the year. You will receive our attention not just during tax season, but all year long. When you contact us, we respond quickly no matter how complicated the matter.
Expect flexibility-
We take pride in being open to new ideas and concepts and our ability to satisfy all manner of client requests. As a small and maneuverable CPA firm we can act immediately when our clients need help. Unlike many large CPA firms, we are not limited by a rigid hierarchy predisposed to rigidity and indifference.
Expect security-
We are very protectiour clients’ privacy and financial information.To keep you safe we use the same IT infrastructure and software applications used by the very largest accounting firms. Our firm adheres to professional standards of confidentiality and privacy that are even more stringent than those required by law.
Private Tax

Interested in our Foundation BOOKKEEPING  or Private Client Tax Services

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CPA KPA provides tax support for private foundations and high net-worth individuals with their diverse needs. From private foundation tax returns (Form 990-PF) to individual income tax planning we have you covered!

Foundation Tax Services
Foundation Bookkeeping Services

You might be wondering:

What is a private foundation?- Read Here
What are the benefits of a private foundation?- Read Here
What is the 5% rule for private foundations? - Read Here

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Frequently Asked Questions

  • 1. What is Form 990-PF?

    Form 990-PF is the federal tax return that must be filed by every organization formally classified as a private foundation. The IRS requires private foundations to file Form 990-PF to report their activities to the federal government. Private foundations use Form 990-PF to provide public disclosure of their financial information and activities, and to complete a number of required calculations and disclosures.

  • 2. What information is included on a private foundation tax return?

      A private foundation tax return includes the disclosure of financial information such as revenues, expenses, and charitable distributions. It also includes a calculation of the excise tax on net investment income as well as a computation of required annual distributions. Additionally, the form is used to disclose a substantial amount of background information including the fair market value of all assets, information on trustees, officers, and key employees, a complete list of grants awarded including dollar amounts, and various other declarations about activities and compliance with the law.

  • 3. How often must private foundations file a tax return?

    Private foundations must file a tax return with the IRS on form 990-PF every year.

  • 4. What are private foundation excise taxes?

    The other five private foundation excise taxes are less common and are generally inapplicable unless a private foundation engages in certain prohibited acts. The prohibited acts include: (1) excise taxes on self-dealing between private foundations and their disqualified persons; (2) excise taxes for failing to annually distribute approximately 5% of assets for charitable purposes; (3) excise taxes on excess business holdings; (4) excise taxes on jeopardizing investments; and (5) excise taxes on expenditures that do not relate to a private foundation’s charitable purpose.

  • 5. What is the current rate for the excise tax levied on private foundation investment income?

    The current rate for the excise tax levied on private foundation investment income is 1.39%.