Who Must File

Organizations and Any Related Organization Subject to Tax Under Chapter 41 or 42 Organizations liable for excise tax under Chapter 41 or 42 should complete the schedule(s) described below, as applicable. Taxes owed by the organization are reported in Part I only.

Caution: The organization should not enter any amount(s) in Part II. Part II is used by persons and entities other than the organization to report and pay excise tax liability relating transactions or activities described in the applicable schedule.

Private foundations and section 4947(a) trusts. Generally, Form 4720 must be filed by all organizations, including foreign organizations, that answered “Yes,” to question 1b, 1d, 2b, 3b, 4a, 4b, 5b, 6b, 7b, or 8 in Part VI-B of Form 990-PF; or “Yes,” to question 1b, 1c, 3b, 4a, 4b, 5b, 6b, or 7 in Part VIII of Form 5227. (Schedules A through E).

Other organizations owing initial taxes on excess busi- ness holdings. Supporting organizations described in section 4943(f)(3) and donor advised funds described in section 4966(d)(2) that owe the tax reported on Schedule C (section 4943(a)). (Schedule C).

Organizations making political expenditures. All section 501(c)(3) organizations that make a political expenditure must file Form 4720 to report the liability and pay the tax (Schedule F). Organization managers may report any first-tier tax they owe on Schedule F of Form 4720. (See Schedule F instructions, later, for the definition of political expenditures.)

Public charities making excess lobbying expenditures. Public charities that made the election under section 501(h) and owe tax on excess lobbying expenditures as figured on Schedule C (Form 990), Part II-A, must file Form 4720 to report the liability and pay the tax (Schedule G). Certain organizations whose section 501(c)(3) status is revoked because of excess lobbying activities (and possibly their managers) are subject to a 5% excise tax on their lobbying expenditures (Schedule H).

Charitable organizations that engage in excess benefit transactions. Form 4720 must be filed by any organization that answered “Yes” to question 25a in Part V of Form 990 or that otherwise engaged in an excess benefit transaction described in section 4958. (Schedule I).

Charitable organizations that make certain premium payments on personal benefit contracts. Form 4720 must be filed by any organization described in section 170(c) or section 664(d) that answered “Yes,” to question 7f in Part V of Form 990, question 6b in Part VI-B of Form 990-PF, question 6b in Part VIII of Form 5227, or that otherwise paid premiums on a personal benefit contract in connection with a transfer to an organization for which a charitable deduction was not allowed to the transferor (Part I, line 8).

Certain tax-exempt entities that are a party to a prohibi- ted tax shelter transaction (PTST). Certain tax-exempt entities must file Form 4720 to report the liability and pay the tax due under section 4965(a)(1) (Schedule J). This requirement applies to entities described in sections 501(c), 501(d), or 170(c) (other than the United States) or an Indian tribal government (within the meaning of section 7701(a) (40)).

• The section 4968 taxes on net investment income of certain private colleges and universities.

• The section 170(f)(10) tax on any premiums paid on a personal benefit contract in connection with a transfer to an organization or charitable remainder trust for which a charitable deduction isn't allowed to the transferor.

• The section 664(c)(2) tax on the unrelated business taxable income of a charitable remainder trust.

2 Instructions for Form 4720 (2025)

Tip: Any entity described in section 4965(c) that is a party to a PTST must file Form 8886-T.

Sponsoring organizations maintaining donor advised funds. All section 170(c) organizations (excluding private foundations and government organizations referred to in sections 170(c)(1) and 170(c)(2)(A)) that maintain one or more donor advised funds must file Form 4720 to report the liability and pay the tax owed on any taxable distributions under section 4966 (Schedule K). In addition, sponsoring organizations that have made a distribution resulting in a prohibited benefit to a donor, donor advisor, or related person must file Form 4720 to report the distribution (Schedule L).

Charitable remainder trusts. All charitable remainder trusts described in section 664 that have unrelated business taxable income for the tax year must file Form 4720 to report the liability and pay the tax due (Part I, line 11). Unrelated business taxable income is figured under section 512 and is determined as if Part III of subchapter F applies to such trusts. Use Form 990-T to compute unrelated business taxable income. The charitable remainder trust should not submit Form 990-T for processing as a return. Instead, attach a copy of the completed Form 990-T and file it with Form 4720.

Hospital organizations failing to meet the community health needs assessment requirements (Sections 501(r)(3), 4959). An excise tax is imposed on the failure by a hospital organization to meet the community health needs assessment (“CHNA”) requirements of section 501(r)(3) (Schedule M).

Certain taxpayers that pay excess executive compensa- tion. An applicable tax-exempt organization (ATEO) that pays to any covered employee more than $1 million in remuneration or pays an excess parachute payment during the year must file Form 4720 to report the liability and pay the excise tax imposed by section 4960. (Schedule N). An ATEO includes section 501(a) exempt organizations, section 527 political organizations, section 521 farmers’ cooperatives, and government entities that have income excluded under section 115(1). If remuneration from a related organization is included to determine the tax imposed by section 4960, the related organization must file a separate Form 4720 to report its share of liability for the tax on Schedule N. See the instructions for Schedule N, later, for the definition of related organization for purposes of the excise tax under section 4960.

Tip: A governmental entity that is not exempt from tax under section 501(a) and does not exclude income under section 115(1) is not an ATEO for purposes of section 4960.

Certain private colleges and universities subject to the excise tax on net investment income (section 4968). An applicable educational institution must file Form 4720 to report the liability and pay the excise tax imposed by section 4968. (Schedule O) An applicable educational institution is a private college or university that:

• Answered “Yes” to line 16 in Part V of Form 990 or that otherwise is a private college or university that is an eligible educational institution, as defined in section 25A(f)(2);

• Had at least 500 students during the preceding tax year, with more than 50% of those students located in the United States; and

• Had an aggregate fair market value, at the end of the preceding tax year, of assets not used directly in the carrying out of the organization’s exempt purpose, held by the

organization and related organizations, of at least $500,000 per student.

Other Filers

Managers, self-dealers, disqualified persons, donors, donor advisors, and related persons. A manager, self-dealer, disqualified person, donor, donor advisor, or related person who owes tax under Chapter 41 or 42, including an entity manager under section 4965, must file a separate Form 4720 showing the tax owed. The Form 4720 filed by a manager, self-dealer, disqualified person, donor, donor advisor, or related person should include the name of the organization in Part II. If applicable, a separate Form 4720 should be filed for each organization for which the manager, self-dealer, disqualified person, donor, donor advisor, or related person owes tax. A person filing Form 4720 should enter their tax year at the top of Form 4720. Enter the name, address, and taxpayer identification number of the manager, self-dealer, disqualified person, donor, donor advisor, or related person in the address area at the top of Form 4720. Enter the name of the organization in the name and address area in Part II. Each manager, self-dealer, disqualified person, donor, donor advisor, or related person should complete all the information the form requires, including the schedule(s) applicable to each tax shown on Part II, to the extent possible, and as applicable.

Tip: Managers of tax favored retirement plans, individual retirement arrangements, and savings arrangements described in sections 401(a), 403(a), 403(b), 529, 457(b), 408(a), 220(d), 408(b), 530, or 223(d) must report and pay tax due under section 4965(a)(2) on Form 5330.