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

managers who took part in making the investments listed in Part I. See Initial taxes on foundation managers, earlier.

If more than one foundation manager is listed in column (a), each is individually liable for the entire amount of tax in connection with the investment. However, the foundation managers who are liable for the tax may prorate payment among themselves. Enter in column (c) the tax each foundation manager will pay.

A foundation manager filing this Form 4720 should carry the appropriate amount in column (d) to Part II, line 2.

General Instructions

Requirement. Complete Schedule E if you answered “Yes,” to Form 990-PF, Part VI-B, question 5b, or Form 5227, Part VIII, question 5b. Complete Parts I and II of Schedule E only for expenditures that are subject to tax.

Note: Also, see Schedule F Initial Taxes on Political Expenditures (Section 4955), later.

Taxable expenditures. With certain exceptions, this means any amount a private foundation pays or incurs:

1. To carry on propaganda or otherwise influence any legislation through:

a. An attempt to influence general public opinion or any segment of it, and

b. Communication with any member or employee of a legislative body, or with any other government official or employee who may take part in formulating legislation;

2. To influence the outcome of any specific public election, or to conduct, directly or indirectly, any voter registration drive;

3. As a grant to an individual for travel, study, or other purposes;

4. As a grant to an organization not described in section 509(a)(1), (2), or (3) or that isn't an exempt operating foundation (as defined in section 4940(d)(2)). This includes grants to:

a. Type I, Type II, and Type III functionally integrated supporting organizations (as described in section 4942(g)(4) (B) and (C)) if a disqualified person of the foundation controls such supporting organization or the supported organizations of such supporting organizations, and

b. Type III supporting organizations (as described in section 4943(f)(5)(A)) that aren't functionally integrated with their supported organizations; or

5. For any purpose other than religious, charitable, scientific, literary, educational, or public purposes, or the prevention of cruelty to children or animals.

Exceptions. Section 4945(d)(4)(B) provides an exception to taxable expenditures that applies to certain grants to organizations when the granting foundation exercises expenditure responsibility described in section 4945(h). Additional information on special rules and exceptions to the definition of taxable expenditures given above can be found at IRS.gov TG 62 Excise Taxes on Taxable Expenditures under IRC 4945 .

Initial tax on foundation. An initial tax of 20% is imposed on each taxable expenditure of the foundation.

Initial tax on foundation managers. When a tax is imposed on a taxable expenditure of the foundation, a tax of 5% of the expenditure will be imposed on any foundation manager who agreed to the expenditure and who knew that it was a taxable expenditure. Foundation managers whose participation was not willful and was due to reasonable cause aren't liable for the tax. Any foundation manager who took part in the expenditure and is liable for the tax must pay the tax. The maximum total amount of tax on all foundation

Instructions for Form 4720 (2025) 13

managers for any one taxable expenditure is $10,000. If more than one foundation manager is liable for tax on a taxable expenditure, all those foundation managers are jointly and severally liable for the tax.

Specific Instructions