Part II. Enter in column (a) the names of all entity managers

who approved the entity as (or otherwise caused the entity to be) a party to a PTST at any time during the tax year and who knew or had reason to know that the transaction is a PTST.

A manager filing this Form 4720 should carry the appropriate amount in column (d) to Part II, line 7.

General Instructions

Requirement. Complete Schedule K if you answered “Yes,” to question 9a in Part V of Form 990, or if you are a fund manager of a sponsoring organization who agreed to the making of a taxable distribution knowing that it was a taxable distribution. Report each taxable distribution separately. These terms are discussed below.

Taxable distribution. A taxable distribution is any distribution from a donor advised fund to any natural person or to any other person if:

1. The distribution is for any purpose other than one specified in section 170(c)(2)(B), or

2. The sponsoring organization maintaining the donor advised fund doesn't exercise expenditure responsibility with respect to such distribution in accordance with section 4945(h).

However, a taxable distribution doesn't include a distribution from a donor advised fund to:

1. Any organization described in section 170(b)(1)(A) (other than a disqualified supporting organization),

2. The sponsoring organization of such donor advised fund, or

3. Any other donor advised fund.

Sponsoring organization. A sponsoring organization is a section 170(c) organization that isn't a government organization (as referred to in section 170(c)(1) and (2)(A)) or a private foundation and maintains one or more donor advised funds.

Donor advised fund. A donor advised fund is a fund or account:

1. Which is separately identified by reference to contributions of a donor or donors,

2. Which is owned and controlled by a sponsoring organization, and

3. For which the donor (or any person appointed or designated by the donor) has or expects to have advisory privileges concerning the distribution or investment of the funds held in the donor advised funds or accounts because of the donor's status as a donor.

Exception. A donor advised fund doesn't include:

1. A fund or account that makes distributions only to a single identified organization or governmental entity; or

2. Any fund or account with respect to which a donor or donor advisor (as defined in the Schedule L instructions) gives advice about which individuals receive grants for travel, study, or similar purposes, if:

a. Such person's advisory privileges are performed exclusively by such person in their capacity as a committee member of which all the committee members are appointed by the sponsoring organization;

b. No combination of donors, donor advisors, or persons related (as defined in the Schedule L instructions) to donors or donor advisors, directly or indirectly, controls the committee; and

c. All grants from the fund or account are awarded on an objective and nondiscriminatory basis according to a procedure approved in advance by the board of directors of the sponsoring organization. The procedure must be designed to ensure that all grants meet the requirements of section 4945(g)(1), (2), or (3).

Tax on sponsoring organization. A tax of 20% of the amount of each taxable distribution is imposed on the sponsoring organization.

Tax on fund manager. If a tax is imposed on a taxable distribution of the sponsoring organization, a tax of 5% of the distribution will be imposed on any fund manager who agreed to the distribution knowing that it was a taxable distribution. Any fund manager who took part in the distribution and is liable for the tax must pay the tax. The maximum amount of tax on all fund managers for any one taxable distribution is $10,000. If more than one fund manager is liable for tax on a taxable distribution, all such managers are jointly and severally liable for the tax.

Specific Instructions