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Part 3. Submission Processing

Chapter 11. Returns and Documents Analysis

Section 12. Exempt Organization Returns (Cont. 3)

3.11.12  Exempt Organization Returns (Cont. 3)

3.11.12.6 
Form 5227

3.11.12.6.8  (01-01-2009)
Part IV
Perfection

  1. Line 50, Column (b): If blank, zero, dash, N/A, or none, do one of the following:

    1. Add Lines 38-49, Column (b).

    2. If unable to perfect per 1) above, and you are NOT corresponding, edit "1" dollar.

  2. Line 50, Column (c): If blank, zero, dash, N/A, or none, do one of the following:

    1. Add Lines 38-49, Column (c).

    2. If Lines 38–49 are blank, edit from item C of the entity section.

  3. Line 56, Column (b): If blank, add Lines 51-55, Column (b).

3.11.12.6.9  (01-01-2009)
Part IV
Correspondence

  1. Correspond for Part IV if Column (b) is blank and Part I has dollar entries .

    Note:

    Do not correspond if Part I has no dollar entries.

3.11.12.6.10  (01-01-2009)
Part V-A
Perfection

  1. Line 61b: Perfect.

3.11.12.6.11  (01-01-2009)
Part V-B
Perfection

  1. Line 65b: Perfect.

3.11.12.6.12  (01-01-2009)
Schedule A
Part I
Perfection

  1. Line 2b, Columns (a) and (b): Perfect.

  2. Line 3, Columns (a) and (b): If blank, do one of the following:

    1. Line 2b minus Line 1 for each column. If Line 1 is blank, edit the amount from Form 5227, Line 29, Columns (a) and (b) to Line 1.

    2. If unable to perfect, Item B box 2 or 3 is checked, and you are not corresponding, edit a "1" on Line 3, Column (a).

3.11.12.6.13  (01-01-2009)
Schedule A
Correspondence

  1. Correspond for Schedule A (pg 7) if blank (zero, dash, none, N/A are valid entries), and the entity section, Item B, box two (2) or three (3) is checked.

    Exception:

    Do not correspond on 2006 and prior year form revisions when converting Part II (prior revisions) to Schedule A (2007 and subsequent revisions).

3.11.12.6.14  (01-01-2009)
Schedule A
Part III
Perfection

  1. Line 7d: If blank, add Lines 7a-7c, Column (c).

3.11.12.7  (01-01-2009)
Form 4720/4720–A

  1. Form 4720 is used by private foundations, managers, self-dealers, disqualified persons, donors, donor advisors, and related persons, to compute and pay certain excise taxes which may be due under IRC 41 or 42.

    Note:

    All Forms 4720 must be scanned through the imaging process. See IRM 3.11.12.1.25.

3.11.12.7.1  (01-01-2009)
General Instructions

  1. Detach a Form 4720 if attached to another return and both of the following apply:

    1. Form 4720 contains amounts

    2. Form 4720 has an original signature

  2. Always convert prior year returns. See Exhibit 3.11.12–38.

  3. Exhibit 3.11.12–15 identifies the transcribed lines (T-lines) for Form 4720.

  4. Perfect all T-lines as follows:

    1. Always perfect for legibility.

    2. Always perfect from attachments, if available.

    3. Correspond if the conditions are met.

    4. Follow the stated instruction for the line.

    5. Leave the T-line blank only if it cannot be perfected in the steps above.

  5. Put Form 4720 in the following order: Pages 1-9.

3.11.12.7.2  (01-01-2009)
Filers Defined

  1. Form 4720 is a supplementary annual taxable return filed to pay various excise taxes. Form 4720 is best defined as an excise tax "penalty" form.

  2. Form 4720 is subject to:

    1. Failure to file penalty.

    2. Failure to pay penalty.

  3. Form 4720 may be filed by:

    1. Individuals (managers, self-dealers, disqualified persons, donors, donor advisors, and related persons) for a personal tax liability

    2. Organization managers on behalf of the foundation/organization

    3. Organization managers filing on behalf of the foundation/organization and for a personal tax liability

  4. A determination must be made whether the return is being filed on behalf of the foundation/organization, for a personal tax liability, or for both the foundation/organization and a personal tax liability. This determination is based on the signatures on Form 4720, page 9. See IRM 3.11.12.7.3 for missing signature procedures.

    If the return contains a signature(s) for Then
    only an Officer or Trustee Process as a 4720
    only a Manager, Self-dealer, Disqualified Person, Donor, Donor Advisor, or Related Person Process as a 4720-A

    Exception:

    If Part II-A, Column (b) does not contain a TIN, process the return as a 4720 to initiate correspondence for the missing information. See IRM 3.11.12.7.13.

    Officer or Trusteeand for the Manager, Self-dealer, Disqualified Person, Donor, Donor Advisor, or Related Person Process Part I as a 4720 and Part II-A as a 4720–A(s)

    Exception:

    If Part II-A, Column (b) does not contain a TIN, process the return as a 4720 to initiate correspondence for the missing information. See IRM 3.11.12.7.13.

    Note:

    If the organization is filing for the individuals, photocopies will be made for each individual in Part II–A and processed as a 4720–A to non-Master File. The original Form 4720 will be processed for the organization through Master File.

3.11.12.7.3  (01-01-2009)
Signature
Correspondence

  1. If corresponding for Part II-A, Column (b), do NOT correspond for a signature of an officer or trustee. See IRM 3.11.12.7.13.

  2. Correspond for a signature if any of the following apply:

    If (on original return) And
    No signature on page 9  
    Only Part I has an entry Signature of an Officer or Trustee is missing
    Only Part II-A has an entry Signature of a Manager, Self-dealer, Disqualified Person, Donor, Donor Advisor, or Related Person is missing, process the return as a Form 4720 to initiate correspondence for the missing signature. See IRM 3.11.12.7.13.

    Caution:

    References to "signature" does not include the signature of an individual or firm preparing the return.

3.11.12.7.4  (01-01-2009)
Remittance

  1. Returns received with remittance are batched in a "with remit" batch. Returns received without remittance are batched in a "non-remit" batch.

  2. If Form 4720 is batched in a "with remit" batch, proceed as follows:

    If return is being filed for a And Then
    Officer or Trustee   Continue processing as a Form 4720.
    Manager, self-dealer, disqualified person
    - or -
    Officer or Trustee and a manager, self-dealer, disqualified person     		Part II-A, Column (b), TIN is present and Form(s) 4720-A have not been prepared Pull the return and route back to Receipt and Control for Form 4720-A preparation and proper application of the remittance.

    Exception:

    Do not route the return to Receipt and Control if there is missing information. Instead, process the return as a Form 4720 to initiate correspondence for the missing information.

    Manager, self-dealer, disqualified person
    - or -
    Officer or Trustee and a manager, self-dealer, disqualified person     		Part II-A, Column (b), TIN is NOT present and Form(s) 4720-A have not been prepared 1. Do not send the return back to Receipt and Control or prepare Form 4720-A.
    2. Process the return as a 4720 to initiate correspondence for the missing information. See IRM 3.11.12.7.13.

  3. If information is present in Part II-A, but the TIN in Column (b) is blank, do not prepare Form(s) 4720–A. See IRM 3.11.12.7.13 for Part II-A correspondence procedures.

3.11.12.7.5  (01-01-2009)
Abatement Requests under IRC §4962

  1. Do all of the following if "Request for Abatement under IRC 4962" is indicated on Form 4720 or Form 4720-A:

    1. Correspond for a reasonable cause statement if not attached. If corresponding, do not make photocopies per 2) below until after a reply is received or the correspondence suspense period has expired.

      Note:

      If the TIN is missing in Part II-A, Column (b), see IRM 3.11.12.7.13.

    2. Photocopy all pages of the numbered or unnumbered return and all attachments (including copies of Forms 4720–A prepared).

    3. Route the photocopies to the Ogden IRS Campus, Attn: EO Accounts, via Form 4227 annotating "4962 abatement request" .

    4. Write "Photocopy sent to EO Accounts" in the left margin of the Form 4720 or Form 4720-A.

    5. Process the original Form 4720 and/or Form 4720-A.

3.11.12.7.6  (01-01-2009)
Perfection, Editing, and Correspondence

  1. An edit sheet is not used for Form 4720.

    Caution:

    Make all required photocopies for Form 4720–A prior to perfection of Form 4720.

  2. Refer to the following instructions to edit the following generic items on the return:

    1. Action Codes (ERS), IRM 3.11.12.1.10

    2. Audit Code, IRM 3.11.12.1.12 and 3.11.12.7.6(3)&(4).

    3. Computer Condition Codes, (D, F, G, R, U, W, X, 3, and 7), IRM 3.11.12.1.13. Edit the CCC to the right of the printed year.

    4. Entity Perfection, IRM 3.11.12.1.20 through 3.11.12.1.20.6

      Note:

      Perfect the name and EIN. Address perfection is not required on this form.

    5. Penalty and Interest Code, IRM 3.11.12.1.26

    6. Received Date, IRM 3.11.12.1.28

    7. Tax Period, IRM 3.11.12.1.38

  3. Edit Audit Code 4 (Form 4720 only) on the dotted portion of Line A, entity section, if either of the following apply:

    1. Parts I, II–A, II–B, and Schedule G have no dollar entries.

    2. The return is a Substitute for Return (SFR). See 3.11.12.1.35, 3.11.12.1.35.1 and 3.11.12.1.35.3.

  4. Edit Audit Code 5 (Form 4720 only) on the dotted portion of Line A, entity section, if TE/GE Field Agents entered "P" following the preprinted "Form 4720" in the upper left corner of page 1.

  5. If both Audit Code conditions (4) and (5) are present, edit Audit Code 4.

3.11.12.7.7  (01-01-2009)
Type of Organization Code

  1. Edit the Type of Organization Code in the space under the "990-EZ" box of the Entity section.

  2. Do not edit a Type of Organization Code if you edited Audit Code 4.

  3. Edit a Type of Organization Code as follows:

    Form 4720
    Type of Organization Code Description
    1 Form 990-PF box is checked
    2 Forms 990/990–EZ box is checked
    3 Form 5227 box is checked

  4. If no box is checked or more than one box is checked, request INOLES research for the EO filing requirements. If the Type of Organization Code cannot be determined per (3) above, route to Entity.

3.11.12.7.8  (01-01-2009)
Question B
(Entity Section)

  1. Correspond if Question B is answered "yes" or "no" , and a detailed statement describing what kind of corrective action was taken is not attached.

3.11.12.7.9  (01-01-2009)
Part I
Perfection
(Form 4720)

  1. Part I applies to an organization which allowed a disqualified expenditure or act.

  2. Compute the total for any of the schedule lines listed below if the line has not been totaled.

  3. Line 1: If blank, edit from Schedule B, Line 4.

  4. Line 2: If blank, edit from Schedule C, Line 7.

  5. Line 3: If blank, edit from Schedule D, Part I, Column (e).

  6. Line 4: If blank, edit from Schedule E, Part I, Column (g).

  7. Line 5: If blank, edit from Schedule F, Part I, Column (e).

  8. Line 7: If blank, edit from Schedule H, Part I, Column (e).

  9. Line 8 (2000 and subsequent form revisions): Perfect.

  10. Line 8 (1999 and prior form revisions): See table below:

    If "Sec. 170(f)(10)(F)" is And Then
    not referenced an amount is presenton the solid line convert to Line 12.
    is oris not referenced an amount is presenton the dotted line 1. Convert the dotted line number to Line 8. (See Exhibit 3.11.12–38).
    2. Convert and perfect the "Total" line, to Line 12.
    is referenced an amount is not present on the dotted line 1. Determine if an amount is included in the total by adding Lines 1-7 and comparing the total to the taxpayer's amount on Line 8.
    2. Enter any difference on the dotted portion of Line 8. (See Exhibit 3.11.12–38).
    3. Convert the dotted line number to Line 8. (See Exhibit 3.11.12–38).
    4. Convert and perfect the "Total" line, to Line 12.

  11. If "Sec. 170(f)(10)(F)" is referenced per (10) above, and/or an amount is present on the dotted portion of Part I, Line 8 "Total" for 1999 and prior Forms 4720:

    1. Photocopy all pages of the return and attachments.

    2. Route the photocopies to:
      Ogden IRS Center
      Mail Stop 1110
      Attn: SE:T:BSP:SPP

    3. Process the original return.

  12. Line 9: If blank, edit from the"total line" of Schedule J, Part I, Column (h).

  13. Line 10: If blank, edit from Schedule K, Part I, Column (f).

  14. Line 11: Perfect.

  15. Line 12: If blank, add lines 1-11.

3.11.12.7.10  (01-01-2009)
Preparation Code

  1. No action is required on amended returns.

  2. Edit a Preparation Code "1" next to the Preparers SSN/PTIN box at the bottom of page 9, if both of the following apply:

    1. The return is signed.

    2. The Paid Preparer's section has information that is different from the person signing the return.

3.11.12.7.11  (01-01-2009)
Part II-A
Preparation
(Form 4720–A)

  1. Form 4720–A is a Non-Master File return that is internally prepared when the return is being filed for a manager, self-dealer, disqualified person, donor, donor advisor, or related person. See "Filers Defined" in IRM 3.11.12.7.2.

  2. Part II–A applies to the person(s) who allowed a disqualified expenditure or act.

  3. If information is present in Part II-A, but the TIN in Column (b) is blank, do not prepare Form(s) 4720–A. See IRM 3.11.12.7.13 for Part II-A correspondence procedures.

  4. If information is present in Part II-A, but the signature of a Manager, Self-dealer, Disqualified Person, etc., is missing, do not prepare Form(s) 4720-A. See IRM 3.11.12.7.13 for missing signature correspondence procedures.

  5. Do all of the following if Form 4720 contains dollar entries in Parts I and II–A, or only Part II–A, and there is no phrase "Form 4720-A prepared" in the left margin of the return:

    If the return is batched as Then
    With remit Pull the return and route to Receipt and Control for Form 4720-A preparation and proper application of the remittance. See IRM 3.11.12.7.4.
    Non-remit 1. Make a separate photocopy of all pages of Form 4720 and all attachments for each individual listed in Part II–A.

    Caution:

    Cover up the DLN before photocopying if the Form 4720 has been numbered.


    2. Annotate "4720–A prepared" in the left margin of Form 4720.
    3. Process as a Form 4720 and/or Form(s) 4720–A based on who signed the return. See IRM 3.11.12.7.2.

3.11.12.7.12  (01-01-2009)
Parts II-A & II-B
Perfection
(Form 4720–A)

  1. Prepare a separate Form 4720–A for each individual listed in Part II–A by doing the following on each photocopy. SeeExhibit 3.11.12-16:

    1. Edit the letter "A" after the form number (i.e. "4720–A" ).

    2. Circle the name and EIN of the Organization in the Entity section.

    3. Underline the name and TIN in Part II-A of the individual for which the Form 4720–A is being prepared. If name and TIN is not available, correspond per IRM 3.11.12.7.13.

    4. Edit the tax period to the left of the preprinted tax year.

    5. Circle out the individuals’ name(s) in Part II-A, not applicable to the Form 4720–A being prepared.

    6. "X" all entries in Part II-A, Columns (c)-(l) not applicable to the 4720–A being prepared.

    7. "X" Lines 1 and 2 in Part II–B, and edit Line 2 to equal the column for the individual for which the F4720–A is being prepared.

  2. Route photocopies of prepared Forms 4720–A and any attachments to OAMC EO Accounts M/S 6710, if any of the following applies:

    1. The Form 4720–A is not timely filed (the due date is the same as for Form 4720).

    2. The taxpayer has annotated "4962 abatement request" . See IRM 3.11.12.7.5.

    3. Any correspondence requiring action (i.e., tax payer is expecting a reply) is attached.

  3. Route all other prepared Forms 4720–A to CSPC Non-Master File.

3.11.12.7.13  (01-01-2009)
Part II-A
Correspondence
(Form 4720–A)

  1. If Part II-A, Column(b) does not contain a TIN and you cannot perfect from attachments, process the return as a 4720 and correspond with the entity shown in the entity section of the return for the missing information in Part II-A, Column(b). Do not correspond for a signature of an officer or trustee, if missing.

  2. If Part II-A is present but the return does not contain a signature of a Manager, Self-dealer, Disqualified Person, etc., process the return as a 4720 to initiate correspondence for the missing signature. Edit ERS Action Code 211.

3.11.12.7.14  (01-01-2009)
Schedule G
Perfection
(Form 4720)

  1. Lines 1 and 2: If both lines are blank, and there is a Schedule A (Form 990/990-EZ) attached:

    1. Enter on Line 1 the amount from Schedule A, Part VI-A, Column (b), Line 43.

    2. Enter on Line 2 the amount from Schedule A, Part VI-A, Column (b), Line 44.

  2. Line 4: If blank, edit the larger of one of the following:

    1. Line 1 or 2 , multiplied by 0.25., or

    2. The amount from page 1, Part I, Line 6.

3.11.12.8  (01-01-2009)
Form 990–PF

  1. Form 990–PF is filed to provide financial information from organizations described in Section 501(c)(3) or Section 4947(a)(1) of the Code that are classified as private foundations.

    Note:

    All Forms 990–PF must be scanned through the imaging process. See IRM 3.11.12.1.25.

3.11.12.8.1  (01-01-2009)
General Instructions

  1. Request and follow INOLES research when editing all Form 990–PFs.

  2. Always follow the instructions for a "special return" .

  3. Exhibit 3.11.12-17 identifies the transcribed lines (T-lines) for Form 990–PF.

  4. Perfect all T-lines as follows:

    1. Always perfect for legibility.

    2. Always perfect from attachments, if available.

    3. Correspond if the conditions are met.

    4. Follow the stated instruction for the line.

    5. Leave the T-line blank only if it cannot be perfected in the steps above.

  5. Put Form 990–PF in the following order:

    • Pages 1-13, followed by

    • Schedule B, if required.

    Note: Insert and edit pages 2, and/or 4 if missing.

3.11.12.8.2  (01-01-2009)
Filers Defined

  1. Form 990–PF is the primary annual information and taxable return filed by a foundation or trust to comply with the filing requirements of IRC §6033.

  2. A foundation or trust is required to file each year regardless of the amount of its gross receipts or assets.

  3. Form 990–PF is subject to:

    1. Excise tax on net investment income if a U.S. organization or gross investment income if a foreign organization.

    2. Daily Delinquency Penalty.

    3. Failure to pay penalty.

    4. Estimated tax penalty.

    5. Failure to Deposit Penalty

    Note:

    Route any correspondence stating a reasonable cause for failing to deposit along with a photocopy of the first page of the return to OAMC, EO Accounts, M/S 6710.

3.11.12.8.3  (01-01-2009)
Special Returns

  1. Form 990–PF special returns are:

    Foreign Return 3.11.12.8.4
    Inactive 990–PF 3.11.12.8.5 and 3.11.12.8.6
    Limited 990–PF 3.11.12.8.7 through
    3.11.12.8.9
    Private Operating Foundation 3.11.12.8.10

3.11.12.8.4  (01-01-2009)
Foreign Return

  1. Correspond for clarification as to whether the organization is foreign or domestic if the Organization Code is "4" or "7" , Line 26, Column (b) has a dollar entry, and the address is not foreign.

  2. If Box D2 is checked, "X" Parts X, XI, XIII, and XV.

3.11.12.8.5  (01-01-2009)
Inactive
Perfection

  1. An organization is inactive if either of the following apply:

    1. The return is marked INACTIVE.

    2. Part I - Part XVII have no dollar entries.

  2. Completely perfect an inactive Form 990-PF by perfecting the entity information (name control, address, EIN, tax period, and received date), Schedule B Indicator, Organization Code, Foundation Code and all of the following:

    1. Edit and insert pages 2, and/or 4 if one or more are missing.

    2. Part I, Column (a), Line 12 – Edit "1" .

    3. Part II — Edit "1" on Line 16, Column (b) and (c).

      Note:

      Do not edit the amount from Item I of the entity section, if present.

    4. Part VII-A — Code Line 9 per IRM 3.11.12.8.22.

    5. Part XIV —Edit as follows:

      If the Foundation Code is Then
      An "02" or "03" , and there are no dollar entries in Part XIV, Edit a "1" on Lines 2a and 3a(1), Columns (a) and (e).
      Other than an "02" or "03" , and Part VII-A, Line 9 is 2, "X" Part XIV.

3.11.12.8.6  (01-01-2009)
Inactive
Correspondence

  1. Correspond for a signature, if missing. Use Action Code 225 or 226 (seeExhibit 3.11.12–44).

  2. Do NOT correspond for any other issues.

3.11.12.8.7  (01-01-2009)
Limited
Defined

  1. A limited, also known as Rev. Proc. 79–8, Form 990–PF, is defined as follows:

    1. The Area Office issues an advance exemption ruling to the organization that it is a public charity liable for filing Form 990.

    2. One or more years later, the Area Office notifies the organization that it is actually a private foundation.

    3. The organization must file limited Forms 990–PF for all of the years it filed Forms 990.

    4. A limited Form 990–PF allows the organization to complete the parts which are not required of a public charity on Form 990, but are required of a private foundation on Form 990–PF.

  2. Identify a limited return by any of the following

    1. Marked "limited"

    2. Marked "Rev. Proc 79-8"

    3. Part I, Column (b) are the only entries

3.11.12.8.8  (01-01-2009)
Limited
Perfection

  1. Completely perfect a limited or Rev. Proc. 79–8 Form 990–PF by perfecting the entity information (name control, address, EIN, tax period, and received date), Schedule B Indicator, Organization Code, 4940 Code, Foundation Code and all of the following:

    1. Insert and edit pages 2 and/or 4 if one or more are missing.

    2. Edit "LTD" at the top of page 1 if "limited" or "Rev. Proc. 79–8" is not written at the top of page 1.

    3. Part I, Column (a), Line 12 — If blank, add Lines 1-11. If Column (a) has no dollar entries, edit "1" .

    4. Part I, Column (b) — perfect.

    5. Part II —Edit "1" on Line 16(b) and/or (c) if Column (b) and/or (c) has no dollar entries.

      Note:

      Do NOT edit the amount from Item I of the entity section, if present.

    6. Part VII–A Code Line 9. See IRM 3.11.12.8.22(1).

    7. Part XIV — Edit as follows:

      If the Foundation Code is Then
      An "02" or "03" , and there are no dollar entries in Part XIV, Edit a "1" on Lines 2a and 3a(1), Columns (a) and (e).
      Other than an "02" or "03" , and Part VII-A, Line 9 is 2, "X" Part XIV.

3.11.12.8.9  (01-01-2009)
Limited
Correspondence

  1. Correspond for a signature, if missing. Use Action Code 225 or 226 (see Exhibit 3.11.12–44).

  2. Correspond if marked "Rev. Proc. 79-8" or "limited" and Part I, Column (b) is missing. Use Action Code 211.

  3. Correspond if only the entity section and Part I, Column (b) are present and the return is NOT marked "Rev. Proc. 79-8" or "limited" . Use Action Code 211 using the clarification of a limited paragraph.

  4. Do NOT correspond for any other issue.

3.11.12.8.10  (01-01-2009)
Private Operating/
Nonoperating Private
Foundation

  1. A private operating foundation (POF) described in IRC §4942(j)(3) (SS03 with Foundation Code 02) may not be liable for tax on net investment income reported on Part I, Line 27b, if they qualify as an exempt operating foundation under §4940(d)(2).

  2. A POF described in IRC §4942(j)(5) (SS 03 with Foundation Code 03) must pay tax on their net investment income on Part I, Line 27b.

  3. Identify a § 4942(j)(3) POF or § 4942(j)(5) from INOLES or IRS label.

    Note:

    If Part VII-A, Line 9 is "1" , "X" Parts XI and XIII.

    Note:

    Part XIV must be completed, and all foreign POFs must complete Part X.

  4. A nonoperating private foundation is an organization not described in (1) or (2) above.

    Examples:
    • SS03 with Foundation Code 04
    • SS92
    • Foundation Code 00

3.11.12.8.11  (01-01-2009)
Perfection, Editing, and Correspondence

  1. Attach an edit sheet to Form 990–PF if required.

  2. Item I of the entity section: If blank, edit from Part II, Line 16, Column (c).

    Note:

    Do not edit "1" in Item I if Part II, Line 16(c) has no dollar entries and you are editing "1" on Line 16(c).

  3. Refer to the following instructions to perfect the generic items:

    1. Action Codes (ERS), IRM 3.11.12.1.10

    2. Computer Condition Codes (A, D, F, G, O, R, T, V, W, X, Y, 3, 7, 8), IRM 3.11.12.1.13. Edit the CCC on the dotted portion of Part I, Lines 8-9.

    3. Daily Delinquency Penalty, IRM 3.11.12.1.15

    4. Entity Perfection, IRM 3.11.12.1.20 through 3.11.12.1.20.6

    5. Incomplete Return Item (IRI) Program, IRM 3.11.12.1.14.2

    6. Penalty and Interest Code, IRM 3.11.12.1.26

    7. Received Date, IRM 3.11.12.1.28

    8. Tax Period, IRM 3.11.12.1.38

3.11.12.8.12  (01-01-2009)
Type of Organization Code

  1. Edit the Type of Organization Code in the right margin next to Item C in the entity section.

  2. Determine the Type of Organization Code from the box(es) checked in Item H and/or D1 or D2 of the entity section. If no boxes are checked, edit from INOLES or IRS label.

  3. Edit a Type of Organization Code as follows:

    Form 990–PF
    Type of Organization Code Description Address
    3

    • 4947(a)(1) box is checked, or

    • No box is checked and SS92 is indicated.

    • U.S. Trust

    • U.S. Address

    • Box D1 or D2 in the entity section is not checked
    6 501(c)(3) Exempt Private Foundation box is checked.

    • U.S. Foundation

    • U.S. Address

    • Box D1 or D2 in the entity section is not checked.
    4

    • 4947(a)(1) box is checked, or

    • No box is checked and SS92 is indicated.

    • Foreign Trust

    • Foreign Address

    • Box D1 or D2 in the entity section is checked.
    7 501(c)(3) Exempt Private Foundation box is checked.

    • Foreign Foundation

    • Foreign Address

    • Box D1 or D2 in the entity section is checked.
    5

    • 4947(a)(1) box is checked, or

    • No box is checked and SS92 is indicated.

    • Canadian Trust

    • Canadian Address

    • Treaty between the U.S. and Canada is referenced or attached.
    Code 8 501(c)(3) Exempt Private Foundation box is checked.

    • Canadian Foundation

    • Canadian Address

    • Treaty between the U.S. and Canada is referenced or attached.
    6 all others  

3.11.12.8.13  (01-01-2009)
Foundation Code

  1. Edit the two–digit Foundation Code in the white space of Item H (below the entity section). This is obtained through IDRS research (INOLES).

    Example:

    If the Foundation Code on INOLES is "02" , edit "02" .

  2. If IDRS does not have a Foundation Code present, leave blank.

3.11.12.8.14  (01-01-2009)
Termination Code

  1. If Box "F" of the entity section is checked do all of the following:

    1. Edit Termination Code"1" in the right margin of page 1, Form 990-PF, next to Item F.

    2. Edit ERS Action Code 320.

    3. Leave the return in the batch.

    4. Prepare Form 4227, Reject to Entity stating "status 25" .

  2. The organization is allowed to start a 60-month period to end (terminate) their private foundation status and become a public charity only when they receive permission from the Area Office to begin an IRC §507(b)(1)(B) termination.

  3. The Part VI taxes owed over the 60-month period are abated if at the end of the 60-month termination period, the Area Office determines that the organization had a "successful" termination.

3.11.12.8.15  (01-01-2009)
Schedule B Indicator

  1. Edit a Schedule B Indicator to the right of Part I, Line 1, if the tax period is 200112 or subsequent as shown below:

    Note:

    Contributor information means at least one name and amount for the same contributor is present. A "contributor" may also be listed as a "sponsor" .

    If And Then
    The box in Part I, Line 2 is checked or is blank,

    • A Schedule B or a substitute Schedule B is attached, containing contributor information (name(s) / amount(s)), or

    • The word "anonymous" , "N/A" , "none" , "zero" , "dash" , in Parts I, II, or III, or

    • The third box under "Special Rules" , page 1 is checked with an amount present on the line,

    		Edit a Schedule B Indicator of "1" .
    The box in Part I, Line 2 is checked or is blank, and Part I, Line 1 is $4999 or less, or
    There is a statement indicating contributions from any one contributor did not exceed $5000,     		A Schedule B or Substitute Schedule B is not attached, 1. Do not edit a Schedule B Indicator.
    2. Continue processing return.
    Part I, Line 2 is checked and Part I, Line 1 is $5000 or more, A Schedule B or a substitute Schedule B is not attached, or
    Is attached, but does not contain:

    • contributor information (name(s) / amount(s)), or

    • The word "anonymous" , "N/A" , "none" , "zero" , "dash" , in Parts I, II, or III, or

    • The third box under "Special Rules" , page 1 is not checked,

    		1. Edit a Schedule B Indicator of "2" .
    2. Continue processing return.
    The box in Part I, Line 2 is blank and Part I, Line 1 is $5000 or more, A Schedule B or a substitute Schedule B is not attached, or
    Is attached, but does not contain:

    • contributor information (name(s) / amount(s)), or

    • The word "anonymous" , "N/A" , "none" , "zero" , "dash" , in Parts I, II, or III, or

    • The third box under "Special Rules" , page 1 is not checked,

    		1. Correspond per IRM 3.11.12.3.41.
    2. Do not edit a Schedule B Indicator.

3.11.12.8.16  (01-01-2009)
Part I
Perfection

  1. Perfect Item I of the entity section from Part II, Line 16, Column (c).

  2. Lines 6b and 10b: Perfect.

  3. Column (a), perfect as follows:

    1. Lines 1–10c: Perfect. Do not bring forward any amounts from Schedule B to Line 1.

    2. Line 11: If blank, double arrow Line 12 to Line 11 if Line 12 is the first dollar entry in Part I.

    3. Line 12: If blank, add Lines 1-11.

      Note:

      Edit "1" on Line 12, Column (a) if Column (a) has no dollar entries and you are not corresponding.

    4. Line 13: If blank, edit from Part VIII, Line 1, Column (c).

    5. Lines 15, 16a, 16b, 17, 19, 20, 21, 22: Perfect.

    6. Line 24: If blank, add Lines 13-23.

    7. Line 25: If blank, edit from Part XV, Line 3a total line, or a total of the items in 3a if the total line is blank..

    8. Line 26: If blank, add Lines 24 and 25.

    9. Line 27a: If blank, subtract Line 26 from Line 12.

  4. Column (b), perfect as follows:

    1. Line 12: If blank, add Lines 2-11.

    2. Line 24: If blank, add Lines 13-23.

    3. Line 26: If blank, bring down Line 24.

    4. Line 27b: If blank, Line 12 minus Line 26. If Type of Organization Code is "4" or "7" , and the address is foreign, "X" Lines 24, 26, and 27. Edit Line 12 amount to Line 27. Note: "X" Line 27b if the result is negative. DO NOT "X" Lines 24, 26, and 27 if the address is not foreign.

  5. Column (c), perfect as follows:

    1. Line 12: If blank, add Lines 3-11.

    2. Line 26: If blank, add Lines 13-23.

    3. Line 27c: If blank, Line 12 minus Line 26. Note: "X" Line 27c if the result is negative.

  6. Column (d), perfect as follows:

    1. Line 24: If blank, add Lines 13-23.

    2. Line 26: If blank, add Lines 24 and 25.

3.11.12.8.17  (01-01-2009)
Part I
Correspondence

  1. Correspond for a Schedule B if the procedures outlined in 3.11.12.8.40 apply.

  2. Correspond for Column (a) if Lines 1-27 are blank.

  3. Correspond for clarification as to whether the organization is foreign or domestic if the Organization Code is "4" or "7" , Line 26, Column (b) has a dollar entry, and the address is not foreign.

3.11.12.8.18  (01-01-2009)
Part II
Perfection

  1. Lines 1, 3-10c, 12-15, Columns (a) and (b): Perfect.

  2. Line 16, Column (b): If blank, zero, dash, N/A, or none, do one of the following:

    1. Add Lines 1-15.

    2. Edit "1" on Line 16, Column (b), if Column (b) has no dollar entries and you are not corresponding for Column (b). No further editing of Column (b) is required when editing a "1" .

  3. Line 16, Column (c): If blank, zero, dash, N/A, or none, do one of the following:

    1. Add Lines 1-15. Edit the total to Page 1, Item I if Item I is blank.

    2. Edit from Item I of the entity section.

    3. Edit "1" on Line 16, Column (c) if Column (c) has no dollar entries and you are not corresponding for Column (c).

  4. Lines 17 and 18 Columns (a) and (b): Perfect.

  5. Line 21, Column (b): Perfect.

  6. Line 22, Column (a) and Column (b): Perfect.

  7. Line 23, Column (b): If blank, add Lines 17-22.

  8. Line 30, Column (b): If blank, do one of the following in the order below:

    1. Line 16 minus Line 23.

    2. Edit from Part III, Line 6.

    3. Add Lines 24-26 or Lines 27-29.

3.11.12.8.19  (01-01-2009)
Part II
Correspondence

  1. Correspond for Column (b) if Lines 1-31 are blank.

  2. Correspond for Column (c) if all of the following apply:

    1. Column (c) is blank.

    2. Item I of the entity section is blank.

    3. Part VII–A, Line 7 is "yes" , or Part II, Line 16, Column (b) is $5,000 or more.

    Note:

    Do not correspond if inactive. See IRM 3.11.12.8.6.

3.11.12.8.20  (01-01-2009)
4940 Code

  1. Edit the 4940 Code in the middle of the top margin of page 4.

  2. Edit 4940 Code 2 if all of the following apply:

    1. The Type of Organization Code is 3 or 6.

    2. INOLES or IRS label has SS03 with Foundation Code 02.

    3. Part I, Line 27b is more than $0.

    4. Part VI, Line 1 is blank, zero, dash, none or N/A.

  3. Edit 4940 Code 3 if all of the following apply:

    1. Type of Organization Code is 3 or 6.

    2. The return is not an initial return.

    3. Part I, Line 27b is more than $0.

    4. Part V, Line 8 is equal to or greater than Line 7.

      Caution:

      Do not Code 3 if Line(s) 7 and/or 8 are "0" or blank or if they are the only entries in Part V.

3.11.12.8.21  (01-01-2009)
Part VI
Perfection

  1. Line 1: If zero, blank, N/A, dash, or none, and Line 2 has an amount, "X" these entries and arrow the Line 2 amount to Line 1.

  2. Line 2: Perfect.

  3. Line 4: Perfect.

  4. Line 5: If blank, add Line 1 and Line 2 and subtract Line 4.

  5. Line 6a-6d: Perfect. If credit is from either Form 1116 or Form 1118, "X" the amount.

    Note:

    If Type of Organization is "3" or "6" , and an amount is on Line 6b, arrow the amount to Line 6d.

  6. Line 8: If blank, do one or more of the following

    1. Edit from Form 2220, Line 38 (penalty line). If Line 38 is blank, and there are entries on Line 37, Columns (a)-(d), compute the total amount and enter on Part VI, Line 8 of Form 990-PF. If Lines 37 and 38 are blank and there is an entry below Line 38 that appears to be the penalty amount, edit the amount below Line 38 to Part VI, Line 8 of Form 990-PF. If Form 2220, page 2 is missing, enter the amount from Part III, Line 17, Columns (a)-(d).

    2. Edit the DDP amount paid to box 7 of the Edit Sheet if the organization included the amount in Lines 8-10, paid a DDP, and the return was received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    3. Do not include any penalty or interest other than estimated tax penalty on Form 990-PF, Part VI, Line 8.

  7. Line 9 or 10: If blank, do the following in order:

    1. Line 5 minus Line 7, plus Line 8.

    2. Edit the positive result on Line 9 or the negative result on Line 10.

    3. If Line 9 contains a penalty or interest other than ES Penalty, subtract the penalty or interest and recompute Line 9.

    Note:

    If pre-computed penalty, interest, or other additional charge is evident, ensure that it has not been included on Line 5 or 9, or reduced Line 10.

  8. Line 11: Perfect the amount to the left of Line 11 (Credit Elect). Do not edit CCC "F" if Line 11 credit elect amount is present.

    Note:

    If either Line 10 or Line 11 is $1,000,000 or more, see IRM 3.11.12.1.29.

3.11.12.8.22  (01-01-2009)
Part VII–A
Perfection

  1. Always Code Line 9 to the right of the yes/no box on Line 9, as follows:

    1. Code 1 —if the Foundation Code on INOLES or IRS label is 02 or 03.

      Note:

      If Code 1 is edited, Part XIV must be completed on all Forms 990–PF including Limited and Inactive returns.

      Note:

      If Code 1 is edited, "X" Parts XI and Part XIII.

    2. Code 2 —if the Foundation Code on INOLES or IRS label is other than 02 or 03.

      Note:

      If Code 2 is edited, "X" Part XIV.

  2. Line 15: Place a check in the Line 15 box if all of the following apply:

    1. The box on Line 15 is blank,

    2. There is a dollar amount on Line 15,

    3. The Organization Code is "3" , "4" , or "5" .

3.11.12.8.23  (01-01-2009)
Part VII-A
Correspondence

  1. Correspond for Part VII-A if (2) or (3) below apply.

  2. Line 11:

    1. Neither box is checked, both boxes are checked, or "N/A" .

    2. "Yes" is checked, but the attached schedule of controlled entities is missing.

    3. "Yes" is checked and Line 12 is blank.

  3. Line 12: Neither box is checked, both boxes are checked, or "N/A" .

3.11.12.8.24  (01-01-2009)
Part VIII
Correspondence

  1. Correspond for Part VIII, Line 1 if it cannot be perfected and both of the following apply:

    1. Part I, Line 13, Column (a), is more than $25,000.

    2. No names are present or on an attachment in Part VIII, Line 1, Column (a).

  2. Correspond for Part VIII, Line 2 if it cannot be perfected and both of the following apply:

    1. Part I, Line 14, Column (a) is more than $50,000.

    2. A name is present in Part VIII, Line 2 and Column (c) is blank and not on an attachment.

  3. Correspond for Part VIII, Line 3 if it cannot be perfected and both of the following apply:

    1. Part I, Lines 16a-16c, Column (a) are more than $50,000.

    2. A name is present in Part VIII, Line 3 and Column (c) is blank and not on an attachment.

3.11.12.8.25  (01-01-2009)
Part X
Perfection

  1. Line 1d: If blank, add Lines 1a-1c.

  2. Line 5: If blank, do one of the following:

    1. Edit from Part V, Line 4.

    2. Line 3 minus Line 4.

    3. If unable to perfect per 1) or 2) above, leave blank.

  3. Line 6: If blank, multiply Line 5 by .05.

3.11.12.8.26  (01-01-2009)
Part X
Correspondence

  1. Correspond for Part X if Part X is blank and all of the following apply:

    1. The Type of Organization Code is "3" or "6" , or the Type of Organization Code is "7" with Foundation Code 02 or 03.

    2. Part II, Line 16, Column (c), is more than $5,000 or Part VII–A, Line 7 is "yes" .

    3. Part I, Line 27b is more than $5,000.

  2. Do not correspond if the taxpayer states on the return or an attachment wording similar to the following:

    • "No assets are held for investment purposes."

    • "No assets are held for non-charitable purposes."

    • "Assets are held only for charitable purposes."

3.11.12.8.27  (01-01-2009)
Part XI
Perfection

  1. "X" Part XI if one of the following applies:

    1. INOLES or IRS label shows Foundation Code 02 or 03.

    2. Box D2 is checked in the entity section.

  2. Line 7: If blank, do one of the following:

    1. Edit from Part XIII, Line 1, Column (d).

    2. Line 5 minus Line 6.

    3. If unable to perfect per 1) or 2) above, leave blank.

3.11.12.8.28  (01-01-2009)
Part XI
Correspondence

  1. Correspond for Part XI if Part XI is blank and all of the following apply:

    1. INOLES or IRS label shows Foundation Code 04 or SS92.

    2. Box D2 is not checked in the entity section.

    3. You are also corresponding for Part X.

3.11.12.8.29  (01-01-2009)
Part XIII
Perfection

  1. "X" Part XIII if any of the following apply:

    1. INOLES or IRS label shows Foundation Code 02 or Foundation Code 03.

    2. Box D2 is checked in the entity section.

  2. Line 6f, Column (d) — If blank, do one of the following:

    1. Line 1d, minus Lines 4d and 5d.

    2. If Part XIII is blank, edit from Part XI, Line 7.

3.11.12.8.30  (01-01-2009)
Part XIII
Correspondence

  1. Correspond for Part XIII if all of the following apply:

    1. INOLES or IRS label shows Foundation Code 04 or SS 92.

    2. Box D2 is not checked in the entity section.

    3. Part XIII is blank and you are also corresponding for Part X.

3.11.12.8.31  (01-01-2009)
Part XIV
Perfection

  1. "X" Part XIV if the Foundation Code on INOLES or IRS label is other than 02 or 03.

    Note:

    Perfect Part XIV on all Forms 990–PF with Foundation Code 02 or 03 including Limited and Inactive returns.

  2. Lines 2a, 2e, 3a(1), 3a(2), 3b, 3c(1), 3c(2) and 3c(4), Columns (a)-(d): Perfect.

  3. Column (e): If blank, add Columns (a)-(d) for each Line in (2) above.

  4. Line 2a, Columns (a) and (e):

    1. Must have a dollar entry if Part XIV is required.

    2. If blank, edit the lesser amount from Part I, Line 27(c) or Part X, Line 6. Do not bring forward "zero" , "dash" , "none" , or "N/A" entries.

    3. If unable to perfect per (b) above, edit "1" in 2a and 2e if you are not corresponding for Part XIV.

  5. If Line 2, Columns (a) and (e) has an entry, and Lines 3a(1)-3c(4), Columns (a) and (e) have no dollar entry, edit a "1" on Line 3a(1), Columns (a) and (e).

3.11.12.8.32  (01-01-2009)
Part XIV
Correspondence

  1. Correspond for Part XIV if both of the following apply:

    1. Part XIV is blank and you cannot perfect per 3.11.12.8.31(2)-(5).

    2. Part VII–A, question 9 is coded "1" .

3.11.12.8.33  (01-01-2009)
Part XV
Perfection

  1. "X" Part XV, Lines 1a-3b if Box D2 is checked in the entity section.

  2. Line 3b : If blank, total the amounts in Part XV, Line 3b, and any amounts included in attachment(s) identified as "Future Grants" or "Grants Approved for Future Payment:" and edit the total to Line 3b.

    Note:

    DO NOT perfect Line 3b if "X" ing Part XV.

3.11.12.8.34  (01-01-2009)
Part XV
Correspondence

  1. Correspond for Line 2a, b, c, and d if Type of Organization Code is "3" or "6" and all of the following apply:

    Exception:

    Do not correspond if the return or an attachment has wording similar to the following:

    • "We only contribute to pre-selected charities."

    • "We do not accept unsolicited applications."

    1. Box D2 is not checked in the entity section.

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. The box on Part XV, Line 2 is not checked.

    4. Part XV, Lines 2a, b, c and d are blank.

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Correspond for Line 3a if Type of Organization is "3" or "6" and all of the following apply:

    1. There are entries in Part XV, Lines 2a-2d (other than zero, dash, none, or N/A).

    2. Box D2 is not checked in the entity section.

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    4. The box on Line 2 is not checked.

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6. Line 3(a) does not contain at least one name, purpose and amount.

      Note:

      A description of the purpose of the grant or contribution (such as "scholarship" , "fellowship" , "indigent assistance" , "nursing service" , etc.) must be present if Items (a)-(e) apply. The words "grants" , "purpose" , or "contribution" are not acceptable.

      Note:

      If more than one recipient is listed, a description of the purpose of the grant or contribution is not needed for each recipient.

      Note:

      "N/A" , "—" (dash), "0" (zero), or "none" are not acceptable for purpose and amount paid.

      Note:

      Do NOT correspond if the purpose and amount can be found on an attachment.

3.11.12.8.35  (01-01-2009)
Part XVI-A
Perfection

  1. Lines 1a-5a, 6-10, Column (d) and Column (e): Perfect.


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