Avoiding Form 990-PF Errors: Identifying Self-Dealing, Monitoring Minimum Distribution Requirements, Excise Taxes

This course will assist practitioners and foundation managers with tricky reporting issues encountered when preparing Form 990-PF, Return of Private Foundation. Completing Form 990-PF is complicated and not necessarily intuitive. The panel will discuss best reporting practices to avoid red flags. The speakers will also address what does and does not need to be disclosed, as well as steps a foundation can take to strengthen overall compliance.

Private foundations are organized for charitable purposes and required to make their annual 990-PF available for public inspection. These entities are vulnerable to at least five different excise taxes ranging from one percent to 200%. Private foundations may compensate disqualified persons as long as the compensation is reasonable and necessary.

Private foundations are charged with doing good and must meet specific minimum distribution requirements. Often, more or less than the calculated minimum distribution is paid out—both carry reporting conundrums. If the foundation is not generous enough in a given year, it is subject to an excise tax; if it is overly generous, it has an excess grant carryover to distribute in the future. Neglecting to include relative expenses as qualifying distributions is cited as a typical preparation error by foundation experts.

Along with concerns about what the foundation should report, advisers must determine what not to report. The IRS List, Common Errors Made by Exempt Organizations, advises "Do not include unnecessary personal identifying information."

Listen as our panel provides line-by-line advice on reporting complicated private foundation transactions, points out how and when to avoid excise taxes, and explains steps that will facilitate the preparation of a foundation's Form 990-PF.