EO Chapter 42 Excise Tax Reference Chart - Private Foundations
Internal Revenue Manual Part 4. Examining Process · 2026-10-03 edition · updated 2026-10-04 · United States
The chart below lists the excise taxes under IRC Chapter 42 applicable to PFs. Each listed tax is described with its key attributes.
IRC Section
Assessed Against
Tax Rate
Form Reported On
2nd Tier Tax Applicable
IRC 4940 Tax on net investment income
PF
2 percent of Net Investment Income (1 percent if IRC 4940(e) is met). See Note 1
Form 990-PF
No
IRC 4941 self dealing
Self-dealer
10 percent
Form 4720-A
200 percent
Foundation Manager
5 percent (Max $20,000 with respect to any one act)
50 percent (Max $20,000 with respect to any one act)
IRC 4942 Distribution of income
PF
30 percent
Form 4720
100 percent
IRC 4943 Excess business holdings
PF
10 percent
Form 4720
200 percent
IRC 4944 Jeopardizing investments
PF
10 percent
Form 4720
25 percent
Foundation Manager
10 percent (Max $10,000 with respect to any one investment)
Form 4720-A
5 percent (Max $20,000 with respect to any one investment)
IRC 4945 Taxable expenditures
PF
20 percent
Form 4720
100 percent
Foundation Manager
5 percent (Max $10,000 with respect to any one taxable expenditure)
Form 4720-A
50 percent (Max $20,000 with respect to any one taxable expenditure)
IRC 4948 Tax on gross investment income of foreign private foundations
PF
4 percent of gross investment income derived from U.S. sources
Form 990-PF
No
Note 1- Exempt operating foundations described under IRC 4940(d)(2) are exempt from IRC 4940 tax. Taxable PFs and IRC 4947(a)(1) trusts are taxed at a rate of 2 percent of the net investment income plus the tax that would be imposed under IRC 511 if the organization were exempt, less the income tax reported on Form 1041 or Form 1120.
Get a plain-English answer with a citation back to this text.
Ask AI about this code